Mercantilism Essay - 1133 Words

Mercantilism Mercantilism is the economic theory that a nations prosperity depends on its supply of gold and silver; that the total volume of trade is unchangeable. This theory suggests that the government should play an active role in the economy by encouraging exports and discouraging imports, especially through the use of tariffs. Spain and England used the mercantile system to benefit the mother countries. The mercantile system had special regulations, which usually extracted some sort of reaction from the colonies. If necessary, the policies would be changed to better suit the mother country. The favorable balance of trade was upheld through certain regulations. No foreign trade was allowed for the colony unless it†¦show more content†¦Also, theoretically, the colonies were designed to be economically complementary to Spain. Manufacturing was forbidden in certain colonies to keep the market open for imports. The economic health of the colony was always a secondary consideration. And finally, all colonial trade was channeled through a single port, first Seville until 1720, and then Cadiz. Spain’s mercantilist regulation was extreme almost to the point of absurdity. Smuggling could not be controlled, since it was in the interest of too many Spaniards on both sides of the .Atlantic to participate. Great Britain had four major aims in it’s mercantile policy: to encourage growth of a native merchant marine fleet, to protect English manufacturer’s from foreign competition, to protect English agriculture, especially grain farmers, and to accumulate as much hard money as possible (Americans had to pay for everything wit h hard currency, which drained gold from America. Colonial paper was not legal in England).). The Navigation Acts were efforts to put the theory of mercantilism into actual practice. Under the provisions of this legislation, trade with the colonies was to be conducted only in English or colonial ships. Certain enumerated items (such as sugar, tobacco and indigo) were to be shipped only within the empire. Trade destined for nations outside the empireShow MoreRelatedMercantilism And The Development Of Mercantilism Essay999 Words   |  4 PagesMercantilism Mercantilism was a theory in economics, which was very popular between the 16th and 18th centuries, whose aim was to build a strong rich state through the regulation of the economy by the state (Wallerstein, 2014). This regulation of the economy was implemented by states through the reduction of imports and the increase of exports. These actions aimed at creating a â€Å"favorable balance of trade† that was characterized by monetary reserves of gold and silver (Rothbard, 2010). Other policiesRead MoreMercantilism Analysis770 Words   |  4 PagesAdam Smith and David Hume were the founding fathers of anti-mercantilist thought. 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