- a. A set of economic tendencies that came to dominate economic practices in the seventeenth century
- i. Belief that total volume of trade was unchangeable
- 1. Therefore, states protected their economies by following certain practices: hoarding precious metals, implementing protectionist trade policies, promoting colonial development, increasing shipbuilding, supporting trading companies, and encouraging manufacturing of products to be used in trade
Prosperity of Nation
- a. Prosperity of nation, to them, depended on a plentiful supply of bullion (gold and silver).
- Desirable to achieve a favorable balance of trade in which goods exported were of greater value than those imported, promoting an influx of gold and silver payments that would increase the quantity of bullion.
Prosperity and encouragement of exports
- i. To encourage exports, governments should stimulate and protect export industries and trade by granting trade monopolies, encouraging investments through subsidies, importing foreign artisans, and improving transportation systems by building roads, bridges, and canals
- 1. By imposing high tariffs on foreign goods, they could be kept o ut of the country and prevented from competing with domestic industries
- 2. Colonies= valuable for raw materials and finishing goods at markets
- a. Mercantilists focused on role of state= state intervention in economyà good
- i. Government regulations to ensure superiority of exports, construction of roads and canals, and granting of subsidies to create trade companies