Chi-Min Su
Professor Salmon
History of Economic Thought
Research Paper
Reminiscing Mercantilism
As Thomas Mun wrote “England’s Treasure by Foreign Trade”, never would he have imagined that the words in his book would forever be remembered as the basis for the mercantilist school of economic thought. Almost four centuries later the words of Thomas Mun and mercantilists such as Sir William Petty still resonate in the mind of economists. Even though traces of mercantilism are difficult to find in practice today, mercantilism is by no means a thing of the bygone days. From the 16th century to the 20th century, mercantilism has played a vital role in the economic policies of many nations. With four centuries of history, there is without a doubt that mercantilism is deeply rooted in the global economic scene. Historical footprints of mercantilism can be found all over the world; from Europe to America to Asia, mercantilism has seen glory and prominence. Even in its decline mercantilism attempted to adapt to changing economic spheres by detaching applicable mercantilist tenets from the school and applying them to multiple economic issues.
Before we could begin to comprehend mercantilism, we must gain a firm grasp of the context in which mercantilism was developed. Prior to the 16th century, Europe’s most influential economic ideas were derived from the likes of St. Thomas Aquinas. A priest by occupation, St. Thomas Aquinas was also a great philosopher who was deeply influenced by the works of Aristotle. Despite primarily propagating Church doctrines, St. Thomas Aquinas also bore the burden of social issues such as economics. Perhaps his most notable contribution to economics was in his book “Summa Theologica” Where he established t...
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...with regards to the logical fallacies that exist within the mercantilist school of thought; however, it would be foolish to deny the possible positive outcomes of applying mercantilism. It has been almost four centuries since the emergence of mercantilism, some have failed and some have succeeded in the practice of mercantilism. There may never again be a country that fully embraces every tenet of mercantilism, but it has become common practice to isolate individual tenets and apply them economically. At the end of the day, isn’t mercantilism just like any other economic school of thought? With the rapid spread of globalization, countries that strictly practice one school of economic are diminishing. Modern economics has become a game of mix and match, where economists attempt to find the ideal economic school of thought that combats specific issues they face.
In the Humanistic Tradition the author, Gloria Fiero introduces Adam smith as a Scottish moral philosopher, pioneer of political economy, and a key figure in the Scottish Enlightenment. Smith also known as the Father of Political economy, is best known for one of his two classic works An Inquiry into the nature and causes of the Wealth of Nations. Fiero looks at Smith’s work because the division of labor is important. One thing Smith thinks is even more important for creating a wealthy nation, is to interact and have open trade with different countries. Fiero states,“It is necessary, though very slow and gradual, consequence of a certain propensity in human nature which has in view no such extensive utility; the propensity to truck, barter,
Encomiendas: An encomienda was a grant of Native American labor given to prominent European men in the Americas by the Spanish king. This grant allowed European men to extract tribute from natives in the form of labor and goods. The value of the grants was dramatically increased with the discovery of gold and silver in the Americas. The significance of this term is that although this system was eventually repartitioned, it initiated the tradition of prominent men controlling vast resources and monopolizing native labor.
There are many disadvantages associated with starting their own branch in India. First is that this option is the most expensive. They would have to pay for all the marketing, equipment, building, manufacturing, production, and staffing that they would need to operate. Mercan Systems would not be able to share any costs with another company. The financial investment needed would depend on the number of regions they choose to operate in (two, four, or nationally) and if they use a direct salesforce or dealers, but it would still be significantly higher than any other alternative. Starting another branch in an international market that they do not already have a location in, is a large change and project to take on. It requires an immense amount
Mercantilism -- an economic theory that holds the prosperity of a nation dependable upon its supply of capital, and that the global volume of trade is "unchangeable." Economic assets, or capital, are represented by bullion (gold, silver, and trade value) held by the state, which is best increased through a positive balance of trade with other nations (exports minus imports). Mercantilism suggests that the ruling government should advance these goals by playing a protectionist role in the economy, by encouraging exports and discouraging imports, especially through the use of tariffs. The economic policy based upon these ideas is often called the mercantile system.
Mercantilism and capitalism both have to do with money accumulation. Capitalism are businesses controlled by private owners. Since they own the business and the government doesn’t all the profit from the work they’ve done and the trades they’ve made goes to them. Mercantilism are countries that are exporting more goods than their importing. In 17th and 18th century this system was used by British government to restrict how the colonies spent their money. Capitalism is the making of the money in a country, and mercantilism is making money from other
When comparing and contrasting the Northern and Southern colonies throughout their development, it is vital to fully understand that each colony differed as a result of their reasons for settlement, geographic setting, and economic establishment; however, the colonies were additionally equivalent with regards to their social perceptions and standards of mercantilism.
In a similar economic revolution, the colonies out grew their mercantile relationship with England and developed their own expanding capitalist system. The idea of a set amount of wealth in the world and that if one were to become wealthy, he or she had to take from someone who is already wealthy, is basically what mercantilism means.
Gaynor Ellis, Elisabeth, and Anthony Esler. ""New Economic Thinking"" World History: The Modern Era. Prentice Hall. 186. Print.
One facet of this unique system involved the numerous economic differences between England and the colonies. The English government subscribed to the economic theory of mercantilism, which demanded that the individual subordinate his economic activity to the interests of the state (Text, 49). In order to promote mercantilism in all her colonies, Great Britain passed the Navigation Acts in 1651, which controlled the output of British holdings by subsidizing. Under the Navigation Acts, each holding was assigned a product, and the Crown dictated the quantity to be produced. The West Indies, for example, were assigned sugar production and any other colony exporting sugar would face stiff penalties (Text, 50). This was done in order to ensure the economic prosperity of King Charles II, but it also served to restrict economic freedom. The geographical layout of the American colonies made mercantilism impractical there. The cit...
Mercantilism was the primary economic system used during the sixteenth to eighteenth centuries. The intention was to increase a nation’s wealth by imposing government regulation concerning all of the nation’s commercial concerns. People believed by that limiting imports through tariffs and maximizing exports, national strength could be boosted.
The first argument is The Raj in 1858. This era has placed a big role in mercantilism with the british wanting to have more monopolies around the world, since at this time competition was for more countries to own other countries and make monopolies. “In 1858, British crown rule was established in India, ending a century of control by the East India Company.”Since British had control over India it was great for new goods, new resources and discovering more of the world. The issue that erupted was the British thought they were eurocentric to the Indians which played a role In the British not treating the Indians fair. “But the ‘Great Rebellion’ did more to create a racial chasm between Indians and the British.” This quote
Smith's formulation transcends a purely descriptive account of the transformations that shook eighteenth-century Europe. A powerful normative theory about the emancipatory character of market systems lies at the heart of Wealth of Nations. These markets constitute "the system of natural liberty" because they shatter traditional hierarchies, exclusions, and privileges.2 Unlike mercantilism and other alternative mechanisms of economic coordination, markets are based on the spontaneous and free expression of individual preferences. Rather than change, even repress, human nature to accord with an abstract bundle of values, market economies accept the propensities of humankind and are attentive to their character. They recognize and value its inclinations; not only human reason but the full panoply of individual aspirations and needs.3 Thus, for Smith, markets give full expression to individual, economic liberty.
According to the theory of mercantilism, it is in a country’s “best interests to maintain a trade surplus” (Hill, 2015) as the accumulation of wealth would essentially increase a country’s power. Mercantilists therefore supported policies that maximized exports and minimized imports through barriers such as tariffs and quotas. Mercantilism ultimately reduces the openness of an economy as the underlying idea is that “exports enrich a country, while imports impoverish it” (Rankin, 2011). Trade can promote growth through a number of channels such as; “technology transfers, scale economies and comparative advantage” (Yanikkaya, 2002). Many countries over the past decade have adopted innovation mercantilist policies to support domestic firms. However these policies have the potential to distort economic systems. Examples of poor mercantilist policies in 2015 include; Canada misusing intellectual property law to undermine pharmaceutical patents, China used its semiconductor industrial policy to unfairly support domestic firms while discriminating against foreign firms and India introduced local content requirements in solar power projects (ITIF). Mercantilism artificially promotes exports and demotes imports, leading to distortions and countries missing out on the benefits which come from open, bi-lateral
Adam Smith is known as the originator of the first of the free-market capitalism, laissez-faire kebijksanaan well as the father of modern economics. An Inquiry into the Nature and Causes of the Wealth of Nations, or commonly abbreviated as "The Wealth of Nations" is a famous book by Adam Smith that contains economic ideas now known as classical economics. Inspiration from this book came from her teacher while studying at the University of Glasgow namely Francis Hutcheson and college friend David Hume (Becker, 2007). Posts Smith also consists of a thorough explanation megenai mercantilist writings and fisokrat that disentiskannya well be a material economic studies. Antaara Smith dissent and you mercantilist one of the factors that determine
During the twentieth century, the world began to develop the idea of economic trade. Beginning in the 1960’s, the four Asian Tigers, Hong Kong, Singapore, South Korea and Taiwan, demonstrated that a global economy, which was fueled by an import and export system with other countries, allowed the economy of the home country itself to flourish. Th...