What is Mercantilism?
Definition of Mercantilism
Mercantilism is a political and economic doctrine that aims to improve national development and strengthen state power by doing the following:
- Gathering precious metals (gold and silver) while maintaining the balance of trade in favor of the mercantilist country.
- Achieving economic independence through imperialism.
- Extracting and exploiting the natural resources and precious metals of its colonies while the mercantilist country uses its colonies as exclusive consumers for their exports and goods.
Mercantilism became popular in Europe in the 17th century, especially in the countries of Britain, France, Spain, and Germany, where it became their main political and economic ideology.
Brief Explanation of Mercantilism
Mercantilism first appeared at the height of the “age of exploration” that revived European trade towards the East. The former trade centers and the power of the feudal manors were gradually weakened and eventually abandoned by the European leaders, it became clear to them that with the rise of foreign trade gave the States more power and control over its treasury and economy.
Medieval concepts of using the size of land as a measure of power have been replaced by the doctrines of mercantilism. In the 1600’s CE, the power of a king and state was measured by the amount of gold and silver in the treasury and the military might of the country.
In order to keep the precious metals within the country and prevent gold and silver from being circulated outside the country, the state forbade its citizens and the natives in their colony from buying foreign goods. Britain was one of the first countries to implement this system. Through the Sugar Act of 1764, Britain would impose a large tax on foreign sugar so that it would not be bought in their colonies. They hoped it would maintain a monopoly for the British traders who exported sugar to their colonies.
Colonialism became prevalent during this period because the mercantilists believed that the colonies were only a source of wealth to be used and the people who lived there were the consumers of the products, they would create from the wealth they took.
Spices, gold and silver mines, sugar, and slaves were extracted from the colony and shipped to Europe. Merchants and ship owners made the most of this work.
This caused the rise of the bourgeois. Ship owners, bankers and traders slowly gain wealth and influence within Europe. Their wealth and power within society started to even influence the aristocrats and the monarchs.
