A definition of mercantilism is the main economic system used during the 16th to 18th centuries. The reason was to increase wealth in a nation, by having the government impose their own regulations on the commercialism in that nation. If the government regulated the exporting and importing of business, the theory was that it could increase national strength.
This definition of mercantilism is clear, although to go into more detail, we need to discuss the historical debates that arose due to this theory. The British government pursued mercantilism in order to improve national strength on an international level. The government ensured that the exports from Britain was higher than the amount that was imported. This resulted in trading with America, where Britain would import raw goods from America, manufacture products, and then export these back out to Europe and other countries. However, colonies argued that this was not beneficial for their economic growth, hence the debate ensued.
Another definition of mercantilism is bullionism, simply stating that a country’s wealth is based upon the amount of precious metals owned. As you can see from these explanations, the definition of mercantilism is fairly positive. However, the decline of mercantilism is of equal importance. When discussing the definition of mercantilism, we also need to discuss key players, such as UK Prime Minister Robert Peel. Peel brought forward the Corn Laws in the 1800s, which then exposed opportunities for Free Trade, and protected cereal producers in the UK from the cheaper value of imports, therefore they were also able to profit from the economic growth in the UK at this time. This then decreased the interest and need for mercantilism.
Adam Smith was also of prolific importance in relation to the definition of mercantilism, and indeed its decline. Adam was a Scottish moral philosopher, and as part of his lectures, he explained that the reason for a country’s economic growth is due to its labour, not the nations quantity of gold and silver, which is what mercantilism was based upon, as mentioned above. As can be seen from this brief history, the definition of mercantilism should not be quite so rosy. It was in fact, a reason for many European wars, and inevitable colonies were expanded due to these difficulties. The regulations from the government were so limiting, it caused many debates and discussions, and this eventually caused the dissolution of the theory.