Mercantilism

mercantilism (mûr´kəntĬlĬzəm), economic system of the major trading nations during the 16th, 17th, and 18th cent., based on the premise that national wealth and power were best served by increasing exports and collecting precious metals in return. It superseded the medieval feudal organization in Western Europe, especially in Holland, France, and England. The period 1500–1800 was one of religious and commercial wars, and large revenues were needed to maintain armies and pay the growing costs of civil government. Mercantilist nations were impressed by the fact that the precious metals, especially gold, were in universal demand as the ready means of obtaining other commodities; hence they tended to identify money with wealth. As the best means of acquiring bullion, foreign trade was favored above domestic trade, and manufacturing or processing, which provided the goods for foreign trade, was favored at the expense of the extractive industries (e.g., agriculture). State action, an essential feature of the mercantile system, was used to accomplish its purposes. Under a mercantilist policy a nation sought to sell more than it bought so as to accumulate bullion. Besides bullion, raw materials for domestic manufacturers were also sought, and duties were levied on the importation of such goods in order to provide revenue for the government. The state exercised much control over economic life, chiefly through corporations and trading companies. Production was carefully regulated with the object of securing goods of high quality and low cost, thus enabling the nation to hold its place in foreign markets. Treaties were made to obtain exclusive trading privileges, and the commerce of colonies was exploited for the benefit of the mother country. In England mercantilist policies were effective in creating a skilled industrial population and a large shipping industry. Through a series of Navigation Acts England finally destroyed the commerce of Holland, its chief rival. As the classical economists were later to point out, however, even a successful mercantilist policy was not likely to be beneficial, because it produced an oversupply of money and, with it, serious inflation. Mercantilist ideas did not decline until the coming of the Industrial Revolution and of laissez-faire. Henry VIII, Elizabeth I, and Oliver Cromwell conformed their policies to mercantilism. In France its chief exponent was Jean Baptiste Colbert.

See J. W. Horrocks, A Short History of Mercantilism (1925); D. C. Coleman, ed., Revisions in Mercantilism (1969); R. B. Ekelund, Jr., and R. D. Tollison, Mercantilists as a Rent-Seeking Society (1982); J. C. Miller, Way of Death: Merchant Capitalism and the Angolan Slave Trade (1988).

The Columbia Encyclopedia, 6th ed. Copyright© 2014, The Columbia University Press.

Mercantilism: Selected full-text books and articles

Politicized Economies: Monarchy, Monopoly, and Mercantilism By Robert B. Ekelund Jr.; Robert D. Tollison Texas A&M University Press, 1997
French Mercantilist Doctrines before Colbert By Charles Woolsey Cole R.R. Smith, Inc., 1931
Mid-18th Century Economic Changes: The Rise of Adam Smith and the Decline of the Mercantilists and Physiocrats By Warlow, Timothy D.; Pitts, Sarah T.; Kamery, Rob H Journal of Economics and Economic Education Research, Vol. 8, No. 3, September 2007
PEER-REVIEWED PERIODICAL
Peer-reviewed publications on Questia are publications containing articles which were subject to evaluation for accuracy and substance by professional peers of the article's author(s).
The Foundations of Capitalism By Oliver C. Cox Philosophical Library, 1959
Librarian’s tip: Part II "The Nation, Mercantilism, and Industrialism"
Military Power, Conflict, and Trade By Michael P. Gerace Frank Cass, 2004
Librarian’s tip: Chap. 3 "Military and Commercial Linkages: A Mercantilist Dimension"
Economic History of Europe By Shepard Bancroft Clough; Charles Woolsey Cole D. C. Heath, 1952 (3rd edition)
Librarian’s tip: Chap. VII "Mercantilism" and Chap. X "Mercantilism Dominant"
Schools and Streams of Economic Thought By Edmund Whittaker Rand McNally, 1960
Librarian’s tip: Chap. 2 "Mercantilism"
From Mercantilism to the Wealth of Nations By Marshall, Michael The World and I, Vol. 14, No. 5, May 1999
Did Europe's Mercantilist Empires Pay? By O'Brien, Patrick History Today, Vol. 46, No. 3, March 1996
The New Mercantilism By Wolf, Charles, Jr The Public Interest, No. 116, Summer 1994
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