2. Concept of Mercantilism
dominant system of economic thought that
prevailed in Europe from 16th to 18th Century
was Mercantilism - known by different names in
different countries-In England it was called as
commercial system -In France it was known as
“Colbertism” after the name of Colbert, the
Finance Minister of Louie the XIV. In Germany
and Austria it was called “Cameralism”. It was
also known as “Bullionism” because of the
importance given to gold and silver.
3. Mercantilist thinkers did not form a group,
advocating a fixed line of thought and policy.
They were businessmen, merchants,
administrators, in different countries. They left a
number of pamphlets and papers regarding
economic problems. Only the later economists
have analysed their writings and found certain
uniformity in their ideas and policies and have
grouped them together as mercantilists.
4. Factors Shaping Mercantilism
1.Economic Factors:
end of the 15th century changes were taking
place in the economic life of the people-
Domestic economy - to an exchange
economy- Agriculture to industry -Trade
became very important - changed the
foundation of socio- economic set-up of the
middle ages
5. 2.Political Factors:
end of the middle ages nationalism - strong
force- Europe changed greatly due to –
Renaissance- It resulted in the emergence of
strong nations like England, France, Spain,
etc., Feudalism came to an end and the King
became more powerful- Each nation wanted
to preserve its independence and
considered other nations as enemies.
6. 3. Religious Factors:
Reformation Movement was revolt against
Roman Catholic Church.-challenged the
authority of Pope----Initially the Roman
Catholic Church controlled the political and
economic activities of the nation
7. Scientific Factors.
science and technology great improvements and
inventions were made. discoveries of compass and
printing press - with the help of compass navigation
became easier and it led to the discovery of new
countries- new countries opened the gates to a variety of
raw materials and markets- invention of printing press
helped the spread of new ideas and knowledge.
8. Cultural Factors
Culturally also Europe was undergoing a sharp
change. Renaissance gave a new light of
learning to the people. People were made to
realise that this worldly life was more
important than the heavenly life. As a result,
money came to occupy an important place in
human activities.
9. Mercantilism
Doctrine of trade -during 16th,17th,18th
centuries-in western europe,France ,Italy,
Germany etc
highly influenced by nationalist ideas-Well
being of the nation was most important-the
regulate and plan the economic activities- to
protect the nation
-Nation can become rich by acquiring
precious metals like more gold and silver-
desirable form of wealth
10. -Ordinary ways to increase wealth of anation by
foreign trade-there are two ways to acquire gold
-1. Mining--- but all nations do not possess gold mines
-2.Foreign Trade----Export maximum & import
minimum-gold accumulation can be increased
F T benefitial to gold acquiring country and harmful to
gold lossing countries- one of the country can gain
from trade
Mercantilist considered F T as the most productive
production – superior role to merchants- then
artisants- farmers enjoyed lowest position
Mercantilist over estimated the value of commerce
