Mercantilism

What is Mercantilism?

Mercantilism is an economic theory from the 16th to 18th centuries that emphasizes increasing a country's wealth by accumulating precious metals like gold and silver. To achieve this, countries aimed to export more goods than they imported and used government policies to support this goal.

Key Concepts of Mercantilism

Trade Surplus: Countries should sell more goods abroad than they buy to gain precious metals and boost national wealth.

Government Intervention: Mercantilism supports strong government involvement in the economy. Governments would implement tariffs, subsidies, and regulations to encourage exports and limit imports.

Colonial Expansion: To support their economic policies, mercantilist countries often pursued colonial expansion to secure resources and markets for their goods.

Accumulation of Wealth: The goal of mercantilism was to accumulate as much wealth (especially gold and silver) as possible, which was thought to enhance national power and security.

Impact

Mercantilism shaped early economic policies and influenced trade practices. During British colonial rule in India, mercantilist policies impacted the economy by controlling trade and resources.