mercantilist

Mercantilism is an economic theory and practice that dominated European economic policy from roughly the 16th to the 18th century. It held that a nation’s power depended on its wealth, commonly defined as the stock of precious metals like gold and silver. To increase national wealth, mercantilist policy sought a positive balance of trade, favoring exports over imports and accumulating bullion through state-led regulation of the economy.

Key features include protectionist measures such as tariffs, import quotas, and subsidies for favored exports, as well as government involvement in industry, navigation, and colonial expansion. The state often granted monopolies or charters to merchants and trading companies and used tariffs to shield domestic industries from competition. A strong navy and control of sea routes were considered essential to protecting trade and colonies, which in turn supplied raw materials and captive markets.

Mercantilist doctrine evolved in several European states. In England, policy was advanced by figures like Thomas Mun and by policy instruments such as the Navigation Acts. France under Jean-Baptiste Colbert pursued similar aims through state-directed industry and colonial management. In other regions, early mercantilist ideas appeared in writings by economists such as Antonio Serra, who argued that wealth was best accumulated through favorable trade balances.

Mercantilism began to yield to classical economics in the late 18th century, notably with Adam Smith’s critique of zero-sum trade and his advocacy of free trade and specialization. Nevertheless, mercantilist ideas influenced later economic policy, including protectionism and industrial strategies in various countries.