The Early Modern Period

The early modern period refers to a time period between the late Middle Ages and the start of revolutions such as the industrial revolution. This generally covers the mid 1500s until around 1800s. During the early modern period the idea of mercantilism dominated the economic policy of many Western European economies.

Mercantilism refers to the idea that a country accumulates vast monetary reserves by using economic policy to ensure the value of exported goods is more than those which are imported. During the early modern period the governments and rulers of these countries used various methods to try and achieve mercantilism. Policies included keeping wages as low as possible in production and giving subsidies to exporting companies and organisations to keep the costs down and keep them competitive in the markets. They also imposed tariffs on imports to discourage other countries from selling them unwanted imports.

Adam Smith was one of the leading economists during the early modern period and was the first person to suggest the term “mercantile system” which referred to a country or economy which wanted to maximise exports and minimise imports. Adam Smith was very much against mercantilism as he was a strong believer in free trade which he believed was being held back during the early modern period by mercantilism.

Robert Peel was British Prime Minister for the conservative party during the 1840s. One of his most famous acts in the job was to remove the Corn Laws which had been set up to protect British cereal farmers against foreign competition. He, like Adam Smith had been, was a strong believer in free trade and many see this decision an example of the beginning of the end for the mercantile economic policies of the early modern period.

The early modern period can therefore be defined as an era where free trade was greatly limited as economies were very wary of buying imports as it risked jeopardising their economic policies based mainly on mercantilism.

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