Mercantile Economic System From The Fifteenth Century Onwards - 825 Words

Mercantile Economic System From The Fifteenth Century Onwards (Essay Sample) Content: First and Last NameProfessorClass TIME \@ "MMMM d, yyyy" May 7, 2018MercantilismIn the period from fifteenth to the nineteenth century, the world was primarily ruled through colonization by the Europeans powers. Mercantilism was a trade theory propagated by these countries, and in essence, it demanded that every nation should export more than its imports, and the difference should be offset by gold or bullion. The exports of finished goods in such cases were preferred over other industries like farming. Mercantilism was a reactive outcome of earlier times when large economies did not exist, and individual towns and villages levied their own taxes on good passing through. With the rise of European powers such as France, Spain, England, and Holland, there was a constant need for money because of the continuous wars. This was the primary reason why the demand for bullion was incorporated, since gold was a universal currency, and these nations needed it for financing t heir war efforts (Weingast 5). The core belief in Mercantilism theory is that the amount wealth is not infinite. There is a limited amount that goes around. Therefore, for one country to become rich, it has to get its wealth from another one. Sine this was peak period in term of colonization, the nations that got poorer were the colonies. In essence, mercantilism made it apparent the only purpose for colonies to exist was to fill the coffer of the powerful nations that had colonized them. The American colonies, for instance, could be compared to tenants who paid rent to Great Britain. The implication was that there was not additional wealth that being generated anywhere in the world. Colonization allowed European nations to explore new regions for new resources which could be put in to the cycle of this wealth circulation. Thus, conquest and subjugation of not just America, but also of places like India and Africa was an outcome of the Mercantilism theory. By colonizing America with its vast resources, Britain was able t significantly increase its wealth. It had to export more than it imported in order to retain its money. By draining the resources from colonies, Britain was able to keep its money supplies reserved for other purposes, such as hearts from continental Europe. Gold was at the ...