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Summary Of Mercantilism

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Mercantilism
Explanation:
Mercantilism was an economic policy that was adopted by European countries such as Britain, Spain, Portugal and France between the sixteenth and eighteenth century. The primary goal of this system was to maximize a country 's monarch’s wealth by importing little to no goods, while exporting many. To achieve this, Monarchs of various European countries would sponsor colonies in different parts of the world. Once the colonies were established, government funded monopolies would extradite the raw materials and goods gathered from the colonies geographical location, and send those resources back to the colonies governing country. After the goods were transported back to the colonies mother country, they were often sold …show more content…

With that in mind, each individual 's role in a society where mercantilism was practiced had the end goal of making their country increasingly prosperous. Therefore, the role of citizens in an absolute monarchy where mercantilism was practiced essentially was to obey the laws of the monarch, and contribute to the growing wealth of their country. They contributed by buying goods and materials manufactured by their realm, as a portion of their money used to purchase items was sent back to the monarch. Individuals in charge of monopolies, however, were responsible for communications with merchants regarding the domestic, and international trade of their resources. The role of the monarch in this economic system was to ensure the safety of monopolies within their colonies, as the productiveness of resource extraction heavily affected the amount of gold and silver the monarch …show more content…

By doing so, an individual is able to earn income through working, which they are then able to use to provide for their family, and themselves by reinvesting in the market to purchase goods. Individuals are expected to take part in the market, as buying products leads to the creation of jobs for others, as well as create demand for certain products. Conversely, employees of companies are able to generate income for their employer, as the employer is able to make profit off of the goods or services their employees are providing. This illustrates the theory of the invisible hand, as first mentioned by Adam smith in his book, The Wealth of Nations. The metaphor of the invisible hand is described as the accidental creation of an effective economic system that is in the public 's interest, due to individuals pursuing their own self interest. As individuals participate in the market, competition arises between companies. Furthermore, by individuals focusing on their own self interest, they are able to control what price goods should be sold at, and how money should flow. Because individuals within a society practicing capitalism are theoretically able to generate a productive economy, there is little to no government regulation. The government 's main priority in a capitalistic society is to protect the private property of individuals / business owners, such as money, and factories. By doing

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