Abstract:
In this paper we will discuss the concept of mercantilism. The idea of mercantilism engendered from the 16th century's Roman empire.Mercantilism is primarily a theory of economics, which tells that a country's prosperity depends on its capital volume. The theory opines that the international trade volume will not change ever and the global economy will also remain unchanged.
If the government of any country sets its economic policies on the basis of the above-mentioned ideas then it will be stated that a mercantile system is running there. Some experts of economic consider the Mercantile system as a part of capitalism. On the other hand, some experts think that mercantilism is a different type of economic system.
The theory of mercantilism tells that the government ought to increase the capital volume by discouraging imports and, obviously, encouraging the export businesses, by using tariffs. However, the Idea of mercantilism has come from the Roman empire of 16th century.
Mercantilism allows the government to intervene into the market directly and take the control of the country's economy. In fact, mercantilism played a significant role behind many wars of the seventeenth and eighteenth century, for example European imperialism. Many of the European countries engaged in war to capture the available markets.
Many great scholars, like David Hume, Adam Smith, severely criticized the idea of mercantilism. In France, the school of physiocrats rejected the idea of mercantilism first. They developed their own trading theories, which was also problematic. Adam Smith, the father of classical economics, coined the best alternative of mercantilism. However, of late, mercantilism is taken as resurgence in the economic concepts, which mainly focus on trade surplus or deficit, but on the whole, the concept of mercantilism, is rejected by most of the renowned economists.
