Mercantilism Economic Theory Free Essay


Mercantilism economic theory is a practice and theory where the government requires to control the trade and its economy to enable the promotion of industries domestically. Often this is more related to the guideline that restricts the importation, stocks of gold increase, and domestic industries being protected. It argues that an economy can be well improved by reducing fair, free trade, and tariffs. Mercantilism is understood as wealth mainly because it involved amassing of currency reserves, reserves of silver, and gold. From the sixth to seventeenth century, it was a belief that the best option for a nation to prosper was due to gold accumulation. Besides that, it also involves governing its colonies, such as ensuring colonies acquire goods from empire nation and controlling of wealth for colonies.

The implications for wealth perception was that mercantilist understood and believe that power is wealth and wealth is power. The mercantilist country tries to add wealth due to import minimization and maximizing its export. This export improves the economy by making it be richer due to money being brought into the economy. Some of the imports enriched a competitor in economical expenses[1]. Exporter nations have more advantages over the importers due to some of the logic of mercantilism that causes trade into a zero-sum transaction. For these nations to increase power and wealth, they rely on military superiority, leverage of trade, and tariffs to maximize a better balance in trade. Mercantilism depends on bonding, which one nation loses while the other wins or gain wealth. This causes involuntary trade relationships and wars of trade in which tariffs are retched up by both countries. Mercantilism increased in Europe around the 16th to 18th centuries[2]. They used military superiority to ensure their products gain market in their is a net-negative for one partner in trading in a mercantile relationship trade because these nations that are mercantilist saw economic power and military as an inextricably linked.

Trade was much important in these colonies because a more increase in trade increases the wealth of a nation. Their power of the mercantilist nation well increased its export and acquisition of precious ornaments in return. Mercantilist has two challenges that have made it be not a reliable form in economic theory. Firstly, it mercantilism relies on unfair balances in trade and other practices in the trade. Countries that are mercantile depend erected barriers in their own economy without involving their partners in the trade do the same. This situation is unstable due to the unwillingness to concede subservience of the economy by peer countries. For this reason, mercantilism has been intertwined historically with wars of trade and adventurism in the military. Secondly, mercantilism also relies on a wealth view that is inaccurate and an archaic. This is wedded to a better principles philosophy in a school of thought and one being measured by currency and zero-sum quantity.

Based on Wilberforce’s article, the pro-slave lobby argued that slavery was good for the British economy. They viewed the slave trade as a legitimate practice that was profitable and important for the country. They insisted that the slave trade helped in creating employment by providing thousands of gunsmiths, merchants, shipbuilders, seamen, carpenters, and many others with employment[3]. This helped in reducing the rate of unemployment, thus promoting the country’s economy. The pro-slave lobby also argued that the customs duties obtained from slave-grown imports were also a vital source of income for the government. Essentially, they even quoted that the British import value in 1973 obtained from Grenada Island, were eight times more as compared to that of Canada.

The main crop in Caribbean plantation in the 18th to 20th century was sugar. Enslaved Africans were the main source of labor before the abolition of slavery cattle. Around 8o to 90% of this sugar was consumed in Europe. A unique ecology in politics, labor relationships, consequences in ecological, and profits were created by sugar in the Caribbean. West Africa people were forcefully displaced to be slave laborers in Caribbean nations. Conflicts were witnessed due to vying for economic and political control[4]. European countries exploited the surrounding resources to the extent that the production of sugar stagnated. Due to competition, European nations start to fight to control the Caribbean nations in the 17th century. Sugar impacted the economy and society and hence increased the ratio of free men and average size in plantations. Sugar had significantly created extensive use of slavery in plantations because it was considered a cash crop and exhibited economies of scales.

The pro-slavery also argues that just like the high demand for exports, the amount of money obtained from slavery improved the country’s economy since individuals, as well as institutions, went to further invest in other businesses and projects using the profits obtained from the plantations managed by the slaves. For instance, banks such as Arthur Heywood Sons & Co. Bank, Bullin’s Bank, and also Layland Bank were created using the profits obtained from slavery. These banks were later acquitted into Barclays and also HSBC banks, respectively[5]. The pro-slavery also provided estimates asserting that Bristol and Liverpool both obtained net profits worth more than £12 million, which was solely gained from slavery[6].  To add to it, they emphasized that almost everyone benefited from slavery. Essentially, speculators, slave traders, absentee landowners, as well as plantation owners profited directly from slavery and utilized their wealth to make a political influence. The pro-slavery argued that slavery is a cornerstone of Britain’s political economy, which was culturally and socially accepted.


To sum it all, it is clear that mercantilist economic theory argues that an economy can be well improved by reducing fair, free trade, and tariffs. In mercantilist countries, the implications for wealth perception was that mercantilist understood and believe that power is wealth and wealth is power. Trade was considered to be vital in these colonies because of the more increase in trade increases the wealth of a nation. In Wilberforce’s article pro-slavery argued that slavery contributed to the economic development of the country. Sugar was the main crop which impacted both the economy and the society.