According to mercantilist theory, to achieve power, nations must maximize their store of precious metals by importing as few goods as possible while profitably exporting products to other countries. In embracing the theory, European governments imposed tariffs, granted monopolies, and subsidized industries. They also sought to acquire colonies to supply natural resources and serve as markets for domestically manufactured goods. England, France, and the Netherlands thus joined Spain and Portugal in establishing colonies in the Americas in the sixteenth and seventeenth centuries. From these, they extracted goods such as furs, hides, tobacco, and most profitably sugar. Critics like David Hume and Adam Smith charged that mercantilism led to inflation and harmed consumers. Smith argued that wealth was not finite, that all nations could prosper, and that the economy should be regulated naturally by competition among producers rather than being managed by governments.

All images referenced in this podcast can be found at https://openstax.org/books/world-history-volume-2/pages/5-3-the-mercantilist-economy

Welcome to A Journey into Human History.

This podcast will attempt to tell the whole human story.

The content contained in this podcast was produced by OpenStax and is licensed under a Creative Commons Attribution License.

Access for free at https://openstax.org/books/world-history-volume-2/pages/1-introduction

Podcast produced by Miranda Casturo as a Creative Common Sense production.