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Mercantilism



" The prejudices established by the commercial system have taught us to believe, that national wealth arises more immediately from exportation than from production. "

   --  Adam Smith


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Mercantilism is economic nationalism for the purpose of building a wealthy and powerful state. Adam Smith coined the term “mercantile system” to describe the system of political economy that sought to enrich the country by restraining imports and encouraging exports. This system dominated Western European economic thought and policies from the sixteenth to the late eighteenth centuries. The goal of these policies was, supposedly, to achieve a “favorable” balance of trade that would bring gold and silver into the country and also to maintain domestic employment.

Mercantilism
The king and bureacracies:
  • Direct industry
  • Forbid an subsidise enterprises
  • Grant monopolies to favoured companies (now known as cronyism)
  • Protect local industries from cheaper imported goods
  • Manage trade to benefit ruling powers of the state to raise money for the treasury



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