Mercantilism During the 17th and 18th centuries Europeans believed in an idea called mercantilismthe idea that a nation's existence depended on power, and power depended on wealth. To gain wealth a country had to have colonies. These to provided a constant source of raw materials and become markets for the manufactured goods to the country that owned them or their "Mother Country.
Colbertism French finance minister and mercantilist Jean-Baptiste Colbert served for over 20 years. Mercantilism arose in France in the early 16th century soon after the monarchy had become the dominant force in French politics.
Inan important decree banned the import of woolen goods from Spain and some parts of Flanders. The next year, a number of restrictions were imposed on the export of bullion.
The height of French mercantilism is closely associated with Jean-Baptiste Colbertfinance minister for 22 years in the 17th century, to the extent that French mercantilism is sometimes called Colbertism.
Under Colbert, the French government became deeply involved in the economy in order to increase exports. Protectionist policies were enacted that limited imports and favored exports. Industries were organized into guilds and monopolies, and production was regulated by the state through a series of more than one thousand directives outlining how different products should be produced.
Colbert also worked to decrease internal barriers to trade, reducing internal tariffs and building an extensive network of roads and canals.
Colbert's policies were quite successful, and France's industrial output and economy grew considerably during this period, as France became the dominant European power.
He was less successful in turning France into a major trading power, and Britain and the Netherlands remained supreme in this field. Economic history of Canada France imposed its mercantilist philosophy on its colonies in North America, especially New France.
It sought to derive the maximum material benefit from the colony, for the homeland, with a minimum of imperial investment in the colony itself.
The ideology was embodied in New France through the establishment under Royal Charter of a number of corporate trading monopolies including La Compagnie des Marchands, which operated from toand the Compagnie de Montmorency, from that date until These were the first corporations to operate in what is now Canada.
Mercantilist policies were also embraced throughout much of the Tudor and Stuart periods, with Robert Walpole being another major proponent.
In Britain, government control over the domestic economy was far less extensive than on the Continentlimited by common law and the steadily increasing power of Parliament. With respect to its colonies, British mercantilism meant that the government and the merchants became partners with the goal of increasing political power and private wealth, to the exclusion of other empires.
The government protected its merchants—and kept others out—through trade barriers, regulations, and subsidies to domestic industries in order to maximize exports from and minimize imports to the realm. The government had to fight smuggling, which became a favorite American technique in the 18th century to circumvent the restrictions on trading with the French, Spanish, or Dutch.
The goal of mercantilism was to run trade surpluses, so that gold and silver would pour into London. The government took its share through duties and taxes, with the remainder going to merchants in Britain.
The government spent much of its revenue on a superb Royal Navy, which not only protected the British colonies but threatened the colonies of the other empires, and sometimes seized them.
The colonies were captive markets for British industry, and the goal was to enrich the mother country. British mercantilism thus mainly took the form of efforts to control trade.
A wide array of regulations were put in place to encourage exports and discourage imports. Tariffs were placed on imports and bounties given for exports, and the export of some raw materials was banned completely. The Navigation Acts expelled foreign merchants from England's domestic trade.
The nation aggressively sought colonies and once under British control, regulations were imposed that allowed the colony to only produce raw materials and to only trade with Britain.
This led to friction with the inhabitants of these colonies, and mercantilist policies such as forbidding trade with other empires and controls over smuggling were a major irritant leading to the American Revolution. Overall, however, mercantilist policies had a positive impact on Britain helping turn it into the world's dominant trader and the global hegemon.
Mercantilists believed that to maximize a nation's power, all land and resources had to be used to their highest and best useand this era thus saw projects like the draining of The Fens. The other nations of Europe also embraced mercantilism to varying degrees.
The Netherlands, which had become the financial centre of Europe by being its most efficient trader, had little interest in seeing trade restricted and adopted few mercantilist policies.
The Habsburg Holy Roman Emperors had long been interested in mercantilist policies, but the vast and decentralized nature of their empire made implementing such notions difficult. Some constituent states of the empire did embrace Mercantilism, most notably Prussia, which under Frederick the Great had perhaps the most rigidly controlled economy in Europe.
During the economic collapse of the 17th century, Spain had little coherent economic policy, but French mercantilist policies were imported by Philip V with some success. Russia under Peter I Peter the Great attempted to pursue mercantilism, but had little success because of Russia's lack of a large merchant class or an industrial base.
Wars and imperialism[ edit ] Mercantilism was the economic version of warfare using economics as a tool for warfare by other means backed up by the state apparatus, and was well suited to an era of military warfare.
A number of wars, most notably the Anglo-Dutch Wars and the Franco-Dutch Warscan be linked directly to mercantilist theories. Most wars had other causes but they reinforced mercantilism by clearly defining the enemy, and justified damage to the enemy's economy. Mercantilism fueled the imperialism of this era, as many nations expended significant effort to conquer new colonies that would be sources of gold as in Mexico or sugar as in the West Indiesas well as becoming exclusive markets.
European power spread around the globe, often under the aegis of companies with government-guaranteed monopolies in certain defined geographical regions, such as the Dutch East India Company or the British Hudson's Bay Company operating in present-day Canada.Mercantilism was the theory of trade espoused by the major European powers from roughly to It advocated that a nation should export more than it imported and accumulate bullion (especially gold) to make up the difference.
An analysis of the mercantilism by european forces Posted on March 30, by Riccardo, an analysis of the mercantilism by european forces substitute and substitute, represses his lack of investment and balances diffusely.
- Mercantilism Mercantilism was a method of trade used by 16th, 17th, and 18th century Monarchies to increase exports and the amount of imports of precious metals coming in.
In a country under mercantilist persuasion, a country would do all it could to bring in money. disappeared in most of Western Europe by about It lingered on in parts of Central and Eastern Europe as late as the s.
Russia finally abolished serfdom in • At an early stage of the French Revolution, on 4 August , France abolished the long-lasting remnants of the feudal order. To trade with European merchants, the colonial merchants shipped their products to European ports.
There they were traded for goods that were not available in England, such as fruits and wines.
Next, the fruits and wine were traded in England for manufactured goods. By welcoming the agricultural bounties of the American colonies, Great Britain developed one of Europe’s strongest economies.
Mercantilism Examples in European Countries. Mercantilism, which was centered in Great Britain and France, became such a dominant force that most European countries of the time embraced it in some form.