Mercantilism is an economic philosophy which encourages nations to seek a favorable trade balance (export more than they import) and thus increase their supply of gold and silver. Mercantilist nations enact protectionist policies, such as placing tariffs on imports; this makes the price of domestic products more competitive, and keeps money in the national economy. Mercantilism also encourages colonialism. Nations which have colonies can import natural resources from their colonies and export finished products back to...
Mercantilism is an economic philosophy which encourages nations to seek a favorable trade balance (export more than they import) and thus increase their supply of gold and silver. Mercantilist nations enact protectionist policies, such as placing tariffs on imports; this makes the price of domestic products more competitive, and keeps money in the national economy. Mercantilism also encourages colonialism. Nations which have colonies can import natural resources from their colonies and export finished products back to them, thus creating a closed-circuit economy.
Mercantilism was very popular in Europe during the 17th and 18th centuries. This philosophy spurred the Europeans toward colonialism in the New World and the East. Moreover, England in particular enacted mercantilist policies on her American colonies. As Winston Churchill explains in The Great Republic, the British government restricted inter-colonial trade, placed tariffs on non-British imports, and heavily regulated colonial manufacturing. These policies ensured that England always had a favorable balance of trade with her colonies and thus had a continual influx of monetary wealth into her economy. The Americans greatly resented these policies, which they felt relegated them to second-class British citizens. Thus, mercantilism served as one of the driving forces between the American independence movement in the late 18th century.
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