My Economics Guide, What is Mercantilism? will give important answers to the question. This economic system, which has a very important place in history, has prepared the ground for many events to take place in world history. Now mercantilism ‘to look more closely.
WHAT IS MERCANTILISM?
Mercantilism is the first economic system to emerge. This economic system, which emerged in the 16th and 17th centuries, gained an important place especially in the European continent. At the time of the birth of mercantilism , feudal governments on the European continent were destroyed and national states were formed. Mercantilism , whose origins date back to the 15th centuries , has been widely followed for many years, but has not survived to the present day because of its serious flaws.
Consider the basic philosophies of this movement. However, it should be noted that this economic system does not have strict lines and rules. It can vary according to the opportunities and economic conditions of countries and nations. Mercantilism is based on three basic ideas.
- Collect precious metals and increase their stock
- Export more than imports
- Active involvement of the state in the economy and trade
Mercantilism , which develops around the abovementioned substances , states that the state and nation, which possesses more precious metals, is richer. At the same time, the country wishing to prosper and strengthen should export more than the amount of imports. With more exports than imports, precious metal stocks should continue to be expanded. In order to make these moves, the state should have an active role and intervene in the economic life by making the necessary arrangements. In short, this trend is nationalist and interventionist.
Mercantilism , criticized by Adam Smith and David Hume , had flawed aspects. It was not possible for the countries that wanted to prosper to export more than imports and to constantly increase their precious mineral stocks. To concretize this troubled situation, let us consider only the two countries that trade with each other. If one of these countries exports more, the other country must import more. However, this situation is not desirable to occur according to Mercantilism . This continuity, which was difficult, ended in the early 19th century and lost its validity