Student Question

What are the main components of mercantilism?

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At its core, mercantilism was based in the notion that wealth is ultimately finite. When thinking on the implications of this idea, you should also reflect a bit on the political context of the Early Modern Era and the prevalence of warfare, rivalries, and conflict between the countries of Europe. We can also add to this the competition for colonies.

Ultimately, the key idea of mercantilism was that it was in a country's self-interest to maintain a "favorable balance of trade." Mercantilists proposed that the State should set controls on commerce to ensure that more gold and silver would be entering the country than leaving it. This is particularly important when considering that the state could then use that wealth to invest in its military or infrastructure. By controlling trade, a country could maximize its own wealth, while denying it to its enemies. In essence, one could say that mercantilism viewed trade through the lens of international rivalry, as another way in which countries of Early Modern Europe competed with one another.

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