Mercantilism and Joint Stock Companies

Mercantilism was a state-driven economic system prevalent in imperial European states during the era of expansion.
Key Concept: Mercantilist economics viewed the world's wealth as a finite pie. The primary objective was to acquire the largest possible slice of that pie.
- The total amount of pie is limited.
- The goal was to accumulate gold and silver since mercantilism measured wealth in these metals and their quantities are finite.
Goal: To secure the largest piece of the global wealth pie, states aimed to maintain a favorable balance of trade.
- A favorable balance of trade means prioritizing exports while minimizing imports.
- Exporting goods results in an influx of gold and silver.
- Importing goods leads to an outflow of gold and silver.
Implication: This system strongly encouraged the expansion of empires through overseas colonization.
- Colonies served as closed markets for exports from the imperial country.
- Colonies existed to enrich their imperial parents.