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Mercantilism
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Mercantilism was the dominant school of economics throughout the early modern period (from the 16th to the 18th century, which roughly corresponded to the emergence of the nation-state). Domestically, this led to some of the first instances of significant government intervention and control over the economy, and it was during this period that much of the modern capitalist system was established. Internationally, mercantilism encouraged the many European wars of the period, and fueled European imperialism, as the European powers fought over "available markets". Belief in mercantilism began to fade in the late 18th century, as the arguments of Adam Smith, and the other classical economists won favor in the British Empire among such advocates as Richard Cobden and to a lesser degree in the rest of Europe with the notable exception of Germany where the Historical school of economics was favored throughout the 19th and early 20th century. Interestingly, the once former British colonies, the United States of America did not adhere to classical economics but to what is called the "American School" (a form of neo-mercantilism) in the policies of Hamilton, Clay, Lincoln and later Republican Party economic practices, that were mirrored in the policies of the Historicists in Germany by such economists as Friedrich List, until the emergence of the New Deal and the modern era. Today, mercantilism as a whole is rejected by many economists, though some elements are looked upon favorably by a growing number including Ravi Batra, Pat Choate, Eammon Fingleton, and Michael Lind.
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Mercantilism is the precursor for protectionism or withdraw from the GATT/USD based global UN system. It is like before WWI with a lot of alliances and interests under the surface after decades of growth and change. The Chinese and Russians mercantilistic long term contracts are neocolonialist in nature. This is similar to the German and Japanese relationship to the west before WWII. Chinese, Russians, Indians need new colonies for raw materials and markets. The west does not want its system with a lock on resources and markets through their own rule book(UN/GATT/USD reserve currency) to be disturbed, although they can break the rules when they please(Iraq invasion).
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Mercantilism ... fueled the intense violence of the 17th and 18th centuries in Europe. Since the level of world trade was viewed as fixed, it followed that the only way to increase a nation's trade was to take it from another. A number of wars, most notably the Anglo-Dutch Wars and the Franco-Dutch Wars, can be linked directly to mercantilist theories. The unending warfare of this period also reinforced mercantilism as it was seen as an essential component to military success. It also fueled the imperialism of this era, as each nation that was able attempted to seize colonies that would be sources of raw materials and exclusive markets. During the mercantilist period, European power spread around the globe.
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Mercantilism refers to a theory of economics that is focused on economic nationalism in order to create a more prosperous state. It was the predominant school of economic thought throughout two centuries, spanning the 1500s to the 1700s. The renowned economist Adam Smith was the first to use the expression “mercantile system”, and it defined a system based on the government actively fostering economic policies of protectionism that would promote export and discourage import so as to enhance capital. This was done with the intent to maintain a positive balance of trade by facilitating the influx of gold and silver bullion, the basis at that time for measuring the wealth of a nation.
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Based on Bullionism, the ideas behind Mercantilism were that 1.) European countries are in direct competition, and 2.) Whichever country has the most bullion wins that competition. The key corollary to this precept, which would define international relations for centuries, was that the key for a country to gain more precious metals was for that country to export more goods and services than it imported, unless of course it could just produce a lot of it's own precious metals. England established colonies in the western hemisphere, for example, in part so that they could have an internal source of lumber, rather than Scandinavia. Another key motivator was that because Spain had added so many bullion producing colonies, England ought to counter by, if not adding their own bullion-rich colonies, at least their own colonies that could produce goods to trade to Spain for their newfound piles of bullion. Many would say that Mercantilist theory drove European powers to colonialism, under the believe that a large empire was the key to wealth.
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Mercantilism is separated from corporatism and fascism simply by its nature. Corporatism and fascism are political systems. Like capitalism, mercantilism is an economic theory. Mercantilism is a theory that the wealth of a nation is based upon its ability to amass gold and silver (and other valuable “money”), and ... a nation who exports more than it imports will be getting richer and richer every day. Of course, this theory on the wealth of nations was debunked rather thoroughly by Adam Smith in The Wealth Of Nations.
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