Concept

Mercantilism

Overview

Mercantilism is a form of economic system and nationalist economic policy that is designed to maximize the exports and minimize the imports of an economy. It seeks to maximize the accumulation of resources within the country and use those resources for one-sided trade.

The concept aims to reduce a possible current account deficit or reach a current account surplus, and it includes measures aimed at accumulating monetary reserves by a positive balance of trade, especially of finished goods. Historically, such policies may have contributed to war and motivated colonial expansion. Mercantilist theory varies in sophistication from one writer to another and has evolved over time.

Mercantilism promotes government regulation of a nation's economy for the purpose of augmenting and bolstering state power at the expense of rival national powers. High tariffs, especially on manufactured goods, were almost universally a feature of mercantilist policy. Before it fell into decline, mercantilism was dominant in modernized parts of Europe and some areas in Africa from the 16th to the 19th centuries, a period of proto-industrialization. Some commentators argue that it is still practised in the economies of industrializing countries in the form of economic interventionism.

With the efforts of supranational organizations such as the World Trade Organization to reduce tariffs globally, non-tariff barriers to trade have assumed a greater importance in neomercantilism.

Overview adapted from Wikipedia (CC BY-SA 4.0; see the article history for authors).

Possible passages

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The balance of produce and consumption may be constantly in favour of a nation, though what is called the balance of trade be generally against it. A nation may import to a greater value than it exports for half a century, perhaps, together; the gold and silver which comes into it during all this time, may be all immediately sent out of it; its circulating coin…
Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations
States what Mercantilism is; the author is tied to Mercantilism in the knowledge graph.
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These commodities having been enumerated in the act of navigation, and in some other subsequent acts, have upon that account been called _enumerated commodities_. The rest are called _non-enumerated_, and may be exported directly to other countries, provided it is in British or plantation ships, of which the owners and three fourths of the mariners are British subjects.
Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations
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This disinclination, when at its extreme point, is called a panic. It occurs when a succession of unexpected failures has created in the mercantile, and sometimes also in the non-mercantile public, a general distrust in each other’s solvency; disposing every one not only to refuse fresh credit, except on very onerous terms, but to call in, if possible, all credit which he has already given. Deposits are withdrawn…
John Stuart Mill, Principles of Political Economy
States what Mercantilism is.
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Philosophers who discussed Mercantilism

Jean Bodin

Related ideas

Place in the tradition

Part of American philosophy.

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