Primary Characteristics of the Mercantile Economic System

The mercantile economic system, commonly known as mercantilism, was prominent during the 16th to 18th centuries. It was characterized by several key features that aimed to increase a nation's wealth and power:

Wealth Accumulation Through Trade

Mercantilism focused on accumulating precious metals, such as gold and silver, through trade. Nations aimed to export more goods than they imported to maintain a favorable balance of trade and increase their reserves of wealth.

Government Intervention in Economic Affairs

Under mercantilism, governments played a significant role in regulating economic activity. They imposed tariffs on imported goods, provided subsidies to domestic industries, and practiced protectionism to shield local markets from foreign competition.

Promotion of a Favorable Balance of Trade

The primary goal of mercantilist policies was to achieve a surplus in the balance of trade, where exports exceeded imports. This surplus was seen as a measure of economic strength and a source of wealth for the nation.

Impact on Global Commerce

Mercantilism shaped global commerce during its era by driving colonial expansion, establishing economic dominance, and influencing market regulation. It laid the foundation for modern economic policies and practices that continue to impact global trade today.