Mercantilism

Paper Summary:

This paper examines how one of the most important moments of economic developments in history was mercantilism, deemed to be the first modern economic current. It looks at how, in its most basic form, mercantilism has two fundamental ideas on which the entire concept is based: wealth and profit. Mercantilism laid the foundations for future protectionism and other trade-related measures that are still very relevant today.

From the Paper:

"The second fundamental idea in mercantilism referred to the idea of profit, its origin and role. The profit began to be seen as a mean to enhance national wealth. How could profit be viewed at a national level? Well, obviously by correlating it with the balance of trade. In order to have money and gold, hence to abide by the first mercantilist idea of wealth, a country needed to export goods at a higher price than it imported goods. Otherwise put, its balance of trade needed to be positive at all times. Of course, there was a category of countries that could be excepted from this and these were the countries that had other means of producing gold and money, most often through their own resources."

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