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MERCANTILE SYSTEM
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See also:MERCANTILE See also:SYSTEM , the name given to the economic policy which See also:developed in See also:Europe at the See also:close of the See also:middle ages. The See also:doctrine of the mercantile system, stated in its most extreme See also:form, made See also:wealth and See also:money identical, and regarded it there-fore as the See also:great See also:object of a community so to conduct its dealings with other nations as to attract to itself the largest possible See also:share of the See also:precious metals. Each See also:country's See also:interest was to export the utmost possible quantity of its own manufactures See also:awl tc import as little as possible of those of other countries, receiving the difference of the two values in See also:gold and See also:silver. This difference is called the See also:balance of See also:trade, and the balance is favourable when more money is received than is paid. Governments might resort to all available expedients—See also:prohibition of, or high duties on, the importation of See also:foreign wares, bounties on the export of See also:home manufactures, restrictions on the export of the precious metals—for the purpose of securing such a balance. But this statement of the doctrine, though current in See also:text-books, does not represent correctly the views of all who belonged to the mercantile school. Many members of that school were much too clear-sighted to entertain the belief that wealth consists exclusively of gold and silver. The mercantilists may be best described, as W. G. F. See also:Roscher remarked, not by any defini' economic theorem which they held in See also:common, but by a set of theoretic tendencies, commonly found in See also:combination, though severely prevailing in different degrees in different minds. The underlying principles may be enumerated as follows: (1) the importance of possessing a large amount of the precious metals; (2) an exaltation (a) of foreign trade over domestic, and (b) of the See also:industry which See also:works up materials over that which provides them; (3) the value of a dense See also:population as an See also:element of See also:national strength; and (4) the employment of See also:state See also:action in furthering artificially the attainment of the ends proposed. The discoveries in the New See also:World had led to a large development of the See also:European currencies. The old feudal See also:economy, founded principally on dealings in See also:kind, had given way before the new " money economy," and the dimensions of the latter were everywhere expanding. Circulation was becoming more rapid, distant communications more frequent, See also:city See also:life and movable See also:property more important. The mercantilists were impressed by the fact that money is wealth sui generis, that it is at all times in universal demand, and that it puts into the hands of its possessor the See also:power of acquiring all other commodities. The See also:period, again, was marked by the formation of great states, with powerful governments at their See also:head. These governments required men and money for the See also:maintenance of permanent armies, which, especially for the religious and See also:Italian See also:wars, were kept up on a great See also:scale. See also:Court expenses, too, were more lavish than ever before, and a larger number of See also:civil officials was employed. The royal domains and dues were insufficient to meet these requirements, and See also:taxation See also:grew with the demands of the monarchies. Statesmen saw that for their own See also:political ends industry must flourish. But manufactures make possible a denser population and a higher See also:total value of exports than See also:agriculture; they open a less limited and more promptly extensible See also: These were then viewed simply as estates to be worked for the See also:advantage of the See also:mother countries, and the aim of statesmen was to make the colonial trade a new source of public See also:revenue. Each nation, as a whole, working for its own power, and the greater ones for predominance, they entered into a competitive struggle in the economic no less than in the political field, success in the former being indeed, by the rulers, regarded as instrumental to pre=See also:eminence in the latter. A national economic interest came to exist, of which the See also:government made itself the representative head. States became a sort of artificial hothouse for the rearing of See also:urban See also:industries. See also:Production was subjected to systematic regulation, with the object of securing the goodness and cheapness of the exported articles, and so maintaining the See also:place of the nation in foreign markets. The See also:industrial See also:control was exercised, in See also:part directly by the state, but largely also through privileged corporations and trading companies. High duties on imports were resorted to, at first perhaps mainly for revenue, but afterwards in the interest of national production. Commercial See also:treaties were a See also:principal object of See also:diplomacy, the end in view being to exclude the competition of other nations in foreign markets, whilst in the home See also:market as little See also:room as possible was given for the introduction of anything but raw materials from abroad. The colonies were prohibited from trading with other European nations than the See also:parent country, to which they supplied either the precious metals or raw produce See also:purchased with home manufactures.
That the efforts of governments for the furtherance of manufactures and commerce under the mercantile system were really effective towards that end is admitted by See also:Adam See also: The See also:foundation of the mercantile system was apthe See also:time when it took its rise inspired by the situation of the European nations. Such a policy had been already in some degree practised in the 14th and 15th centuries, thus preceding any formal exposition or See also:defence of its speculative basis. At the commencement of the 16th See also:century it began to exercise a widely extended See also:influence. See also: Additional information and CommentsThere are no comments yet for this article.
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