Mercantile economy

The mercantile economy was a predominant economic system between the 15th and 18th centuries, based on the accumulation of wealth, international trade and government intervention in the economy. This model emerged with the growth of navigation and trade between colonies and European metropolises. Main Characteristics of the Mercantile Economy Metalism – A country's wealth was measured by the amount of precious metals (gold and silver) it possessed. The more gold a country accumulated, the more powerful it was. State Intervention – Governments controlled trade, regulated prices and encouraged national production to strengthen the economy. Favorable Trade Balance – The objective was to export more than import, ensuring the entry of wealth into the country. Colonialism and Monopolies – The colonies were exploited to supply raw materials to the metropolises and consume their manufactured products. Colonial trade was strictly controlled by European nations. Protectionism – Customs tariffs and import restrictions were used to protect domestic production against foreign competition. Decline of the Mercantile Economy Mercantilism lost strength in the 18th century with the emergence of economic liberalism, defended by thinkers such as Adam Smith, who proposed a freer market, without strong government interference. This thinking influenced the emergence of industrial capitalism in the 19th century.