Mercantilism
Mercantilism
Mercantilism is a political and economic system that arose in the 17th and 18th centuries. The definition of this system can be explained as economic nationalism for the purpose of building a wealthy and powerful state. It purports that a country 's economic strength is directly related to the maintenance of a positive balance of trade. This theory also claims that a country must export more than it imports. Such a positive balance of trade, according to mercantilist thought, results in a surplus of gold in the practicing country 's treasury. Moreover, one of the key assertions of mercantilism is that national wealth will come through the import and accumulation of gold or other precious metals such as silver. Mercantilism as a historical period has been associated with the rise of a particular form of European capitalism often referred to as merchant capitalism. Mercantilism was also a doctrine advanced by various economic writers of the period, who tended to call for a powerful alliance between merchants and the monarchial system, which was then in decline. The term mercantilism is often used today to describe protectionist trade policies which, when coupled with other government policies, directly or indirectly subsidize particular industries in order to gain national or regional trade advantage. What is more, American sociologist, David L. Sills in his work mentioned five essential elements of mercantilism: • Nationalism and policy go hand in hand, with all policy being directed towards nationalism. • Foreign trade should always be thought of in terms of its effect on the country 's stock of precious metals. • Lacking domestic gold or silver mines, these precious metals must be accumulated by an excess of exports over imports. • Government trade authorities, through policy, should strive to restrict imports and encourage exports. • Economic foreign policy and political foreign policy should be
Mercantilism is a political and economic system that arose in the 17th and 18th centuries. The definition of this system can be explained as economic nationalism for the purpose of building a wealthy and powerful state. It purports that a country 's economic strength is directly related to the maintenance of a positive balance of trade. This theory also claims that a country must export more than it imports. Such a positive balance of trade, according to mercantilist thought, results in a surplus of gold in the practicing country 's treasury. Moreover, one of the key assertions of mercantilism is that national wealth will come through the import and accumulation of gold or other precious metals such as silver. Mercantilism as a historical period has been associated with the rise of a particular form of European capitalism often referred to as merchant capitalism. Mercantilism was also a doctrine advanced by various economic writers of the period, who tended to call for a powerful alliance between merchants and the monarchial system, which was then in decline. The term mercantilism is often used today to describe protectionist trade policies which, when coupled with other government policies, directly or indirectly subsidize particular industries in order to gain national or regional trade advantage. What is more, American sociologist, David L. Sills in his work mentioned five essential elements of mercantilism: • Nationalism and policy go hand in hand, with all policy being directed towards nationalism. • Foreign trade should always be thought of in terms of its effect on the country 's stock of precious metals. • Lacking domestic gold or silver mines, these precious metals must be accumulated by an excess of exports over imports. • Government trade authorities, through policy, should strive to restrict imports and encourage exports. • Economic foreign policy and political foreign policy should be