Mercantilism
An economic policy under which nations sought to increase their wealth and power by obtaining large amounts of natural resources from their colonies.
Mercantilism was a dominant economic theory that prevailed in Europe from the 16th to the 18th century. It was based on the idea that wealth is finite, and therefore, countries should aim to accumulate as much wealth as possible to strengthen their power and security. Mercantilism was characterized by the belief that the greatest measure of a nation’s economic strength was its treasury and the accumulation of precious metals, mainly gold and silver.
The mercantilist economic policies were largely focused on promoting exports, controlling imports and maximizing the accumulation of precious metals. To achieve these objectives, mercantilist policies included trade restrictions, tariffs, subsidies for domestic manufacturers, and other protectionist measures.
The mercantilist approach to trade also favored the development of colonies and the establishment of exclusive trading relationships with them. The colonies were seen as sources of cheap raw materials and new markets for manufactured goods, which further enhanced the wealth and power of the mother country.
Although mercantilism was prevalent in Europe for centuries, it gradually lost its relevance and was replaced by other economic theories such as capitalism and free trade. These new economic systems emphasized the importance of markets, free competition, and the benefits of trade for all participating parties, rather than just the accumulation of wealth for a specific country or group.
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