Mercantilism

Growth of International Trade + Colonization in the New World + Growing Merchant Class = Mercantilism
This growth of international trade leads Europeans away from the Feudal system.
Mercantilism- was the new economic theory for how trading nations could earn wealth. The theory stated that a nation became more powerful by building up a large supply of bullion, or gold and silver.
Some gained bullion by taking over gold and silver mines but most achieved this through trade.

Step 1: Export more than you Import!
- A country needs to export, or sell goods to another country, more than it imports, or buys from them.
- Mother countries sought to create a more favorable balance of trade: the value of the exports is more than the value of the imports.
- This allowed countries to build big supplies of gold, thus making the country very wealthy.
Step 2: Build Colonies!
- Colonies were critical because they provided the Mother Country inexpensive raw materials and resources
- Then the Mother Country could turn around and sell the finished products back to the colonies for a profit.
Step 3: High Tariffs on Imports (taxes)
- Countries charged expensive tariffs on products made in rival countries. This kept citizens from buying imported goods, so the Mother Country could make more money.