Mercantilism

Lecture 2: Part 3

Mercantilism

It was the dominant economic philosophy in Europe from approximately the 1500s to the 1700s. It emerged during the period of nation-building, colonial expansion, and increasing international trade.

Wealth as the Accumulation of Precious Metals

This refers to the central idea of Mercantilism was that a nation’s wealth was measured by its accumulation of gold and silver (bullion).

Favorable Balance of Trade

Mercantilists promoted policies that encouraged Exports, Domestic production, and Restrictions on imports. They believed that international trade was a competition among nations where one country’s gain could be another country’s loss.

Strong Government Intervention

Mercantilists believed that the government should actively manage the economy.

Role of Colonies

European powers used ____________ to support their domestic industries and strengthen their economies.

Thomas Mun

Argued that England should increase exports and maintain a trade surplus. Believed foreign trade was the main source of national wealth.

Jean-Baptiste Colbert

Developed policies in France that supported industries, trade regulation, and state economic control. His policies were known as Colbertism.

William Petty

Moved beyond traditional mercantilism by using measurement and statistics. Studied population, labor, and national income.