MERCENTILISM

Submitted

by

Hasnain ali

Submitted to: Dr Raid khan

Subject: IR Before 1945

DEPARTMENT OF POLITICAL SCIENCE

BACHA KHAN UNIVERSITY CHARSADDA
MAIN CAMPUS KHYBER PAKHTUNKHWA, PAKISTAN
(2021-2025)
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Table of Contents
Introduction.................................................................................................................................................3
Key take ways.............................................................................................................................................3
Understanding mercantilism........................................................................................................................3
History of mercantilism...............................................................................................................................3
French Mercantilism....................................................................................................................................4
British Colonial Mercantilism.....................................................................................................................4
References...................................................................................................................................................5

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Introduction
Mercantilism was an economic system of trade that spanned the 16th century to the 18th century.
Mercantilism was based on the principle that the world's wealth was static, and consequently,
governments had to regulate trade to build their wealth and national power. Many European
nations attempted to accumulate the largest possible share of that wealth by maximizing their
exports and limiting their imports via tariffs.

Key take ways

Mercantilism was the dominant economic system from the 16th century to the 18th century
(Hemzo,2023).Mercantilism was based on the idea that a nation's wealth and power were best
served by increasing exports and reducing imports.It's characterized by the belief that global
wealth was static and that a nation's economic health relied heavily on its supply of capital
(Mun,1895).Due to the nationalistic nature of mercantilism, nations frequently used military
might to protect local markets and supply sources.Mercantilism was replaced by free-trade
economic theory in the mid-18th century.

Understanding mercantilism
Mercantilism was a form of economic nationalism that sought to increase the prosperity and
power of a nation through restrictive trade practices (Christiani,2000). Its goal was to increase
the supply of a state's gold and silver with exports rather than to deplete it through imports. It
also sought to support domestic employment.

History of mercantilism
First seen in Europe during the 1500s, mercantilism was based on the idea that a nation's wealth
and power were best served by increasing exports and limiting imports.Mercantilism replaced
the feudal economic system in Western Europe. At the time, England was the epicenter of the
British Empire but had relatively few natural resources.

To grow its wealth, England introduced fiscal policies that discouraged colonists from buying
foreign products and created incentives to buy only British goods. For example, the Sugar Act of
1764 raised duties on foreign refined sugar and molasses imported by the colonies

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(Lindholm,2023). This increased taxation was meant to give British sugar growers in the West
Indies a monopoly on the colonial marke.

Similarly, the Navigation Act of 1651 forbade foreign vessels from trading along the British
coast and required colonial exports to first pass through British control before being redistributed
throughout Europe.Programs like these resulted in a favorable balance of trade that increased
Great Britain's national wealth.
Under mercantilism, nations frequently engaged their military might to ensure that local markets
and supply sources were protected. Mercantilists also believed that a nation's economic health
could be measured by its ownership of precious metals, such as gold or silver (Bruyn,2004).
Their levels tended to rise with increased new home construction, increased agricultural output,
and a strong merchant fleet that serviced additional markets with goods and raw materials.

French Mercantilism
Arguably the most influential proponent of mercantilism, French Controller General of Finance
Jean-Baptiste Colbert (1619-1683) studied foreign-trade economic theories. He was uniquely
positioned to execute on mercantilist ideas (Misselden,1970). A devout monarchist, Colbert
called for an economic strategy that protected the French crown from a rising Dutch mercantile
class.

British Colonial Mercantilism

The British colonies were subject to the direct and indirect effects of mercantilist policy at home.
Here are several examples:Controlled production and trade: Mercantilism led to the adoption of
far-reaching trade restrictions, which stunted the growth and freedom of colonial businesses.
The expansion of the slave trade: Trade became triangulated between the British Empire, its
colonies, and foreign markets. This fostered the development of the slave trade in many colonies,
including America (Ramos,2007). The colonies provided rum, cotton, and other products
demanded by African imperialists. In turn, slaves were returned to America or the West Indies
and traded for sugar and molasses.

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References
1. Hemzo, M. A. (2023). History and Concept of Luxury. In Marketing Luxury Services:
Concepts, Strategy, and Practice (pp. 1-19). Cham: Springer International Publishing.

2. Mun, T. (1895). England's treasure by forraign trade. Macmillan and Company.

3. *Antoine de Montchrestien:* Often credited with coining the term "political economy,"
Montchrestien's work "Traité de l’Oeconomie Politique" (1615) reflects early mercantilist ideas.

4. *Philippe de Girard:* His book "Les Intérêts de la France Mal-Entendus" (1787) is a later work that
critiques mercantilist policies.

5. Christiani, M. (2000). Gerard de Malynes: Institutio. Harmony and the Balance: An

Intellectual History of Seventeenth-Century English Economic Thought, 26.

6. Lindholm, S. (2023). Jean Bodin and Biopolitics Before the Biopolitical Era. Taylor &
Francis.

7. De Bruyn, F. (2004). From Georgic Poetry to Statistics and Graphs: Eighteenth-Century

Representations and the" State" of British Society. The Yale Journal of Criticism, 17(1), 107-
139.

8. Davenant, C. (1701). An essay upon ways and means of supplying the war (No. 3792). J.
Tonson .

9. Misselden, E. (1970). Free Trade or, The Meanes To Make Trade Florish. McMaster
University Archive for the History of Economic Though.

10. Ramos, A. (2007). Economy, empire, and identity: Rethinking the origins of political
economy in Sir James Steuart's “Principles of Political Economy”. University of Notre Dame.