Mercantilism and protectionism today

It extends over roughly years — the 16th, 17th, and 18th centuries — and involves the birth and consolidation of the modern concept of the national state. The economics of that period, in particular the regulation by the state of external trade on behalf of national power, are known as "the 'mercantile' system" or "mercantilism. The rulers of that period had far-reaching powers over the activities of their subjects, while individual liberties were largely submerged. The eventual revolt against mercantilism was associated with the promotion of democratic principles.

Mercantilism and protectionism today

Colbertism French finance minister and mercantilist Jean-Baptiste Colbert served for over 20 years.

Mercantilism and protectionism today

Mercantilism arose in France in the early 16th century soon after the monarchy had become the dominant force in French politics. Inan important decree banned the import of woolen goods from Spain and some parts of Flanders.

The next year, a number of restrictions were imposed on the export of bullion. The height of French mercantilism is closely associated with Jean-Baptiste Colbertfinance minister for 22 years in the 17th century, to the extent that French mercantilism is sometimes called Colbertism.

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Under Colbert, the French government became deeply involved in the economy in order to increase exports. Protectionist policies were enacted that limited imports and favored exports. Industries were organized into guilds and monopolies, and production was regulated by the state through a series of more than one thousand directives outlining how different products should be produced.

Colbert also worked to decrease internal barriers to trade, reducing internal tariffs and building an extensive network of roads and canals.

Colbert's policies were quite successful, and France's industrial output and economy grew considerably during this period, as France became the dominant European power. He was less successful in turning France into a major trading power, and Britain and the Netherlands remained supreme in this field.

Economic history of Canada France imposed its mercantilist philosophy on its colonies in North America, especially New France. It sought to derive the maximum material benefit from the colony, for the homeland, with a minimum of imperial investment in the colony itself.

The ideology was embodied in New France through the establishment under Royal Charter of a number of corporate trading monopolies including La Compagnie des Marchands, which operated from toand the Compagnie de Montmorency, from that date until These were the first corporations to operate in what is now Canada.

Mercantilist policies were also embraced throughout much of the Tudor and Stuart periods, with Robert Walpole being another major proponent.

In Britain, government control over the domestic economy was far less extensive than on the Continentlimited by common law and the steadily increasing power of Parliament. With respect to its colonies, British mercantilism meant that the government and the merchants became partners with the goal of increasing political power and private wealth, to the exclusion of other empires.

The government protected its merchants—and kept others out—through trade barriers, regulations, and subsidies to domestic industries in order to maximize exports from and minimize imports to the realm. The government had to fight smuggling, which became a favorite American technique in the 18th century to circumvent the restrictions on trading with the French, Spanish, or Dutch.

The goal of mercantilism was to run trade surpluses, so that gold and silver would pour into London. The government took its share through duties and taxes, with the remainder going to merchants in Britain.

The government spent much of its revenue on a superb Royal Navy, which not only protected the British colonies but threatened the colonies of the other empires, and sometimes seized them. The colonies were captive markets for British industry, and the goal was to enrich the mother country.

British mercantilism thus mainly took the form of efforts to control trade. A wide array of regulations were put in place to encourage exports and discourage imports.

Tariffs were placed on imports and bounties given for exports, and the export of some raw materials was banned completely. The Navigation Acts expelled foreign merchants from England's domestic trade.

The nation aggressively sought colonies and once under British control, regulations were imposed that allowed the colony to only produce raw materials and to only trade with Britain.

This led to friction with the inhabitants of these colonies, and mercantilist policies such as forbidding trade with other empires and controls over smuggling were a major irritant leading to the American Revolution.

Overall, however, mercantilist policies had a positive impact on Britain helping turn it into the world's dominant trader and the global hegemon. Mercantilists believed that to maximize a nation's power, all land and resources had to be used to their highest and best useand this era thus saw projects like the draining of The Fens.

The other nations of Europe also embraced mercantilism to varying degrees.

Economic Nationalism: From Mercantilism to World War II

The Netherlands, which had become the financial centre of Europe by being its most efficient trader, had little interest in seeing trade restricted and adopted few mercantilist policies. The Habsburg Holy Roman Emperors had long been interested in mercantilist policies, but the vast and decentralized nature of their empire made implementing such notions difficult.

Some constituent states of the empire did embrace Mercantilism, most notably Prussia, which under Frederick the Great had perhaps the most rigidly controlled economy in Europe.

During the economic collapse of the 17th century, Spain had little coherent economic policy, but French mercantilist policies were imported by Philip V with some success.Other examples of mercantilism in the modern world include all the tariffs that all the countries levy against each other.

Any form of protectionism, whether it be tariffs, non-tariff trade barriers, or government subsidies of individual companies or groups of companies are forms of mercantilism.

It’s and two Republican politicians, Reed Smoot of Utah and Willis Hawley of Oregon, are co-sponsoring legislation to keep foreign goods out of the United States. This act of protectionism. Mercantilism; Protectionism; Laissez-faire; Free trade; Economic nationalism; Economic integration. How Rich Countries Got Rich and Why Poor Countries Stay Poor [Erik Reinert] on *FREE* shipping on qualifying offers.

In this refreshingly revisionist history, Erik S. Reinert shows how rich countries developed through a . Mercantilism and Protectionism Today Introduciton Mercantilism as one of the first and oldest economic theories, since political economy arose as a science, does not belong just to the past.

Mercantilism and protectionism as its policy is very present and actively used even today. Actually, it has never disappeared.

Tweet. Here’s a letter to a new reader of Cafe Hayek: Mr. T.J. Wayne. Mr. Wayne: You object to my claim that foreign investment in the U.S. benefits us believe that we are harmed by such investment because, as .

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