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    Mercantilism: Definition & Characteristics

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    ragusaka
    Mercantilism was an economic theory that dominated Western European economic policy from the 16th to the 18th century. It held that a nation's wealth came from its supply of gold and silver and advocated running trade surpluses, economic self-sufficiency, and state regulation of the economy through tariffs, subsidies, and colonies to maximize exports and minimize imports. Colonies were seen as sources of raw materials and captive markets for the mother country's manufactured goods.

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    Mercantilism: Definition & Characteristics

    Uploaded by

    ragusaka
    3K views6 pages
    Mercantilism was an economic theory that dominated Western European economic policy from the 16th to the 18th century. It held that a nation's wealth came from its supply of gold and silver and advocated running trade surpluses, economic self-sufficiency, and state regulation of the economy through tariffs, subsidies, and colonies to maximize exports and minimize imports. Colonies were seen as sources of raw materials and captive markets for the mother country's manufactured goods.

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    Mercantilism

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    Mercantilism was an economic theory that dominated Western European economic policy from the 16th to the 18th century. It held that a nation's wealth came from its supply of gold and silver and advocated running trade surpluses, economic self-sufficiency, and state regulation of the economy through tariffs, subsidies, and colonies to maximize exports and minimize imports. Colonies were seen as sources of raw materials and captive markets for the mother country's manufactured goods.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    3K views6 pages

    Mercantilism: Definition & Characteristics

    Uploaded by

    ragusaka
    Mercantilism was an economic theory that dominated Western European economic policy from the 16th to the 18th century. It held that a nation's wealth came from its supply of gold and silver and advocated running trade surpluses, economic self-sufficiency, and state regulation of the economy through tariffs, subsidies, and colonies to maximize exports and minimize imports. Colonies were seen as sources of raw materials and captive markets for the mother country's manufactured goods.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 6

    Mercantilism

    Definition & Characteristics


    Mercantilism

    The real wealth of the nation was


    thought to be the supply of
    money and precious metals held
    by its government and people.
    Characteristics of Mercantilism

    1. Dictated a “favorable balance of trade.”


    – Export more than you import [a trade surplus].
    – High tariffs on imported manufactured good.
    – Low tariffs on imported raw materials.

    2. Each nation must try to achieve economic


    self-sufficiency.
    – Those founding new industries should be
    rewarded by the state.
    Characteristics of Mercantilism
    3. Thriving agriculture should be carefully
    encouraged.
    – Less of need to import foods.
    – Prosperous farmers could provide a base for
    taxation.
    4. Sea power was necessary to control foreign
    markets.

    5. Impose internal taxes of all kinds.


    Characteristics of Mercantilism
    Manufactured goods

    Mother
    Country
    Colony
    Raw
    materials
    Cheap labor

    6. Colonies would provide captive markets for


    manufactured goods & sources of raw materials.
    Characteristics of Mercantilism
    7. Trade is a “zero-sum” game.
    – A nation can gain in international trade only at the
    expense of other nations.

    8. A large population was needed to provide a


    domestic labor force to people the colonies.

    9. State action was needed to regulate and


    enforce all of these economic policies.
    – State-sponsored trade monopolies.

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