MERCANTILISM Meaning and
Definition
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Mercantilism is an economic theory and strategy that emerged in Europe during the 16th and 18th centuries, focusing on the accumulation of wealth and power through economic activities. It is often associated with the rise of nation-states and the establishment of colonial empires.
At its core, mercantilism promotes a set of policies and practices aimed at increasing a country's exports while restraining imports, with the ultimate goal of achieving a favorable balance of trade. This involves implementing various measures such as tariffs, subsidies, and regulatory barriers to protect domestic industries and restrict foreign competition.
In a mercantilist system, the government assumes a prominent role in the economy, actively intervening to promote commercial interests. It seeks to establish a network of colonies as sources of raw materials and captive markets for manufactured goods, thereby ensuring a steady supply of resources and a favorable trade balance.
Mercantilism places a strong emphasis on the accumulation of precious metals, particularly gold and silver, as a symbol of wealth and power. The acquisition of these metals through trade surpluses and colonization is seen as central to a nation's prosperity.
However, critics argue that mercantilism's focus on protectionism and the pursuit of national interests often leads to economic inefficiencies and hampers international cooperation. With the subsequent emergence of liberal economic theories, such as Adam Smith's concept of free trade, mercantilism gradually fell out of favor as a dominant economic doctrine.
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Etymology of MERCANTILISM
The word "mercantilism" originates from the Latin word "mercanor", which means merchant. The term was first used in the mid-19th century to describe an economic theory and practice prevalent in Europe from the 16th to the 18th centuries. It was derived from the French word "mercantilisme", which referred to the economic policies and practices of merchants and states promoting national commercial interests. The term gained popularity due to its association with policies that emphasized the accumulation of wealth through trade, protectionism, and the acquisition of colonies.
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