Mercantile system

10070621-001 5th Semester

Definition

• According to the Mercantile System for a country to be wealthy, it believed it needed large amounts of gold and silver.

Beneficiaries ……

• Mercantilism is an economic theory from the perspective of exporters, protectionists, politicians, and money hoarders, and its primary beneficiaries are big business and big government.

Cont………

• Mercantilist were primarily writing for rulers and to enhance national power. With more gold they could larger and better armies and acquire more colonies.

• In addition, more gold means more money to circulate and so more business activity.

Historical background….

• Generally, Mercantilism is associated with the rise of the “Nation state”

• Feudal institutions were weakened.• Increased production of wool.• The "Black Death" of 1346-61.• Improvement in shipping etc.

Representative mercantilist

• Sir william pettty (1623-1687)• Gerard de malynes (1586-1641)• Thomas mun (1571-1641)• Jean baptiste colbert (1619-1683)

Sir William Petty

• Sir William Petty was an English economist, scientist and philosopher. He first became prominent serving Oliver Cromwell and Commonwealth in Ireland.

CONT…

• He was member of the Parliament of England, an entrepreneur, and was a charter(an original or founding) member of the Royal Society.

Gerard de malynes

• Gerard de Malynes was an independent merchant in foreign trade.

• An English commissioner in the Spanish Netherlands.

CONT..

• A government advisor on trade matters, assay master(an officer who assays or tests gold or silver coin or bullion) of the mint, and commissioner of mint affairs

10070621-0095th Semester

Thomas mun

• Successful businessman, director of East India Trading Company.

• Argued favorable trade as mean of increasing wealth of England.

Jean-Baptiste Colbert

• Jean-Baptiste Colbert was a French politician who served as the Minister of Finances of France from 1665 to 1683 under the rule of King Louis XIV. His relentless hard work and thrift made him an esteemed minister

• Saw colonies as markets and provider of raw material..

Is mercantilism alive today?

CONT…

Today ,there seems to be a resurgence of neo-mercantilism ,as nations plagued with high levels of unemployment seek to restrict imports in an effort to stimulate domestic production and employment…

CONT…

• Most industrial nations restrict imports of agriculture commodities, textiles, shoes, steel, and many other products in order to protect domestic industries employment.

Pakistan

In the second half of 2000-10, particularly after the global crisis and in response to twin high deficits—fiscal and current account, heavy protectionism was re-introduced

Japan

• Japan is a mercantilist nation which has a policy of engaging in protectionism in order to protect its industries.

• This results in high employment rates in Japan, and high unemployment rates with trading partners, including the United States.

• Some examples can also be seen in

• Somewhere not only the nations but some companies are also following this policy.i.e. Telmex.

Conclusion

• So, we conclude that though declining, but mercantilism is alive and well in 21st century.

Any Question???