Introduction
Mercantilism is the main economic system used during the sixteenth to eighteenth centuries. The main goal was to increase a nation’s wealth by imposing government regulation concerning all of the nation’s commercial interests. It was believed that national strength could be maximized by limiting imports via tariffs and maximizing exports. Mercantilism dominated the major European trading nations. This “mercantile system” based on the premise that national wealth and power was best served by increasing exports and collecting precious metals in return. It superseded the medieval feudal organization in Western Europe; especially in the Netherlands, France and England. Domestically, this led to some of the first instances of significant government intervention and control over the economy and it was during this period that much of the modern capitalist system was established. Internationally, mercantilism encouraged the many European wars of the period and fueled European imperialism.
Historical Background of Mercantilism:
Mercantilist held that a nation’s wealth consisted primarily in the amount of gold and silver in its treasury. Accordingly Mercantilist government imposed extensive restriction on their economics to ensure a surplus of exports over imports. That system thinks that if one country had more gold than another, it was necessarily better off. Such ideas were attractive to some government, such as Britain, French.
There are some amusing stories of mercantilism in action. During the napoleon wars, the warring governments made few attempts to prevent their foes from importing food and there by starving them. But they did try to make it difficult for their opponent to export goods. In the 18th century it was given currency by Adam Smith in his wealth of nation (1776).By using the term of mercantilism , France, Britain, Denmark, Spain, etc.