Editing Mercantilism (section)

==Policies==
Mercantilist ideas were the dominant economic ideology of all of Europe in the early modern period, and most states embraced it to a certain degree. Mercantilism was centred on England and France, and it was in these states that mercantilist policies were most often enacted.

The policies have included:
* High [[tariff]]s, especially on manufactured goods.
* Forbidding colonies to trade with other nations.
* Monopolizing markets with [[staple right|staple ports]].
* Banning the export of gold and silver, even for payments.
* Forbidding trade to be carried in foreign ships, as per, for example, the [[Navigation Acts]].
* Subsidies on exports.
* Promoting manufacturing and industry through research or direct subsidies.
* Limiting wages.
* Maximizing the use of domestic resources.
* Restricting domestic consumption through [[non-tariff barriers to trade]].

===France===
{{main|Colbertism}}
[[File:Jean-Baptiste Colbert.jpg|thumb|French finance minister and mercantilist [[Jean-Baptiste Colbert]] served for over 20 years.|upright]]

Mercantilism arose in France in the early 16th century soon after the monarchy had become the dominant force in French politics. In 1539, an important decree banned the import of woolen goods from [[Spain]] and some parts of [[Flanders]]. The next year, a number of restrictions were imposed on the export of bullion.<ref>{{Harvnb|Kellenbenz|1976|p=29}}.</ref>

Over the rest of the 16th century, further protectionist measures were introduced. The height of French mercantilism is closely associated with [[Jean-Baptiste Colbert]], finance minister for 22 years in the 17th century, to the extent that French mercantilism is sometimes called [[Colbertism]]. Under Colbert, the French government became deeply involved in the economy in order to increase exports. Protectionist policies were enacted that limited imports and favored exports. Industries were organized into guilds and monopolies, and production was regulated by the state through a series of more than one thousand directives outlining how different products should be produced.<ref name="E.N. Williams. pg. 177-83">{{Harvnb|Williams|1999|pp=177–183}}.</ref>

To encourage industry, foreign artisans and craftsmen were imported. Colbert also worked to decrease internal barriers to trade, reducing internal tariffs and building an extensive network of roads and canals. Colbert's policies were quite successful, and France's industrial output and the economy grew considerably during this period, as France became the dominant European power. He was less successful in turning France into a major trading power, and Britain and the Dutch Republic remained supreme in this field.<ref name="E.N. Williams. pg. 177-83"/>

===New France===
{{Main|Economic history of Canada}}
France imposed its mercantilist philosophy on its colonies in North America, especially [[New France]]. It sought to derive the maximum material benefit from the colony, for the homeland, with a minimum of colonial investment in the colony itself. The ideology was embodied in New France through the establishment under Royal Charter of a number of corporate trading monopolies including La Compagnie des Marchands, which operated from 1613 to 1621, and the Compagnie de Montmorency, from that date until 1627. It was in turn replaced by La [[Compagnie des Cent-Associés]], created in 1627 by King Louis XIII, and the Communauté des habitants in 1643. These were the first corporations to operate in what is now Canada.

===United Kingdom ===
{{Main|Economic history of the United Kingdom#The age of mercantilism}}
In England, mercantilism reached its peak during the [[Long Parliament]] government (1640–60). Mercantilist policies were also embraced throughout much of the [[Tudor period|Tudor]] and [[House of Stuart|Stuart]] periods, with [[Robert Walpole]] being another major proponent. In Britain, government control over the domestic economy was far less extensive than on the [[Continental Europe|Continent]], limited by [[common law]] and the steadily increasing power of Parliament.<ref>{{Harvnb|Hansen|2001|p=65}}.</ref> Government-controlled monopolies were common, especially before the [[English Civil War]], but were often controversial.<ref>{{Harvnb|Hill|1980|p=32}}.</ref>

[[File:De slag bij Terheide - The Battle of Schevening - August 10 1653 (Willem van de Velde I, 1657).jpg|thumb|upright=1.15|left|The [[Anglo-Dutch Wars]] were fought between the English and the Dutch for control over the seas and trade routes.]]

With respect to its colonies,  British mercantilism meant that the government and the merchants became partners with the goal of increasing political power and private wealth, to the exclusion of other European powers. The government protected its merchants—and kept foreign ones out—through trade barriers, regulations, and subsidies to domestic industries in order to maximize exports from and minimize imports to the realm. The government had to fight smuggling, which became a favourite American technique in the 18th century to circumvent the restrictions on trading with the French, Spanish, or Dutch. The goal of mercantilism was to run trade surpluses to benefit the government. The government took its share through duties and taxes, with the remainder going to merchants in Britain. The government spent much of its revenue on the [[Royal Navy]], which both protected the colonies of Britain but was vital in capturing the colonies of other European powers.<ref>{{Harvnb|Nester|2000|p=54}}.</ref><ref name=":1">Max Savelle, [https://books.google.com/books?id=hIgl_HNozQsC&pg=PA204 ''Seeds of Liberty: The Genesis of the American Mind'' (1948) pp. 204ff.]</ref>

British mercantilist writers were themselves divided on whether domestic controls were necessary. British mercantilism thus mainly took the form of efforts to control trade. A wide array of regulations were put in place to encourage exports and discourage imports. Tariffs were placed on imports and bounties given for exports, and the export of some raw materials was banned completely. The [[Trade and Navigation Acts|Navigation Acts]] removed foreign merchants from being involved England's domestic trade. British policies in their [[British America|American colonies]] led to friction with the inhabitants of the [[Thirteen Colonies]], and mercantilist policies (such as forbidding trade with other European powers and enforcing bans on smuggling) were a major irritant leading to the [[American Revolution]].<ref name=":1" /><ref name=":2">{{cite book|author1=Frieden, Jeffry A.|author2= Lake, David A.|title=International Political Economy: Perspectives on Global Power and Wealth|url=https://books.google.com/books?id=l-eAAgAAQBAJ&pg=PA132|date= 2014|edition=4th|publisher=Routledge|pages=128ff|isbn=978-1-134-59595-2}}</ref>

Mercantilism taught that trade was a zero-sum game, with one country's gain equivalent to a loss sustained by the trading partner. Some have argued that mercantilist policies had a positive impact on Britain, helping to transform the nation into the world's dominant trading power and a [[Pax Britannica|global hegemon]].<ref name=":2" /> One domestic policy that had a lasting impact was the conversion of "wastelands" to agricultural use. Mercantilists believed that to maximize a nation's power, all land and resources had to be used to their [[highest and best use]], and this era thus saw projects like the draining of [[The Fens]].<ref>{{Harvnb|Wilson|1963|p=15}}.</ref>

===United States===
{{Main|American School (economics)}}
The American School of economics dominated [[United States]] national policies from the time of the [[American Civil War]] until the mid-20th century.<ref name = "US History 256">[http://www.u-s-history.com/pages/h256.html "Second Bank of the United States" U-S-History.com].</ref><ref name="UCSB 1860">[https://web.archive.org/web/20041125165512/http://www.presidency.ucsb.edu/showplatforms.php?platindex=R1860 "Republican Party Platform of 1860" presidency.ucsb.edu]</ref><ref name="UCSB 1856">[https://web.archive.org/web/20041125163057/http://www.presidency.ucsb.edu/showplatforms.php?platindex=R1856 "Republican Party Platform of 1856" presidency.ucsb.edu].</ref><ref name = "Our Docs">[http://www.ourdocuments.gov/doc.php?flash=true&doc=32 Pacific Railway Act (1862) ourdocuments.gov].</ref><ref name="SCU">[http://itrs.scu.edu/jclass/group6/history.html "History of U.S. Banking" SCU.edu] {{webarchive|url=https://web.archive.org/web/20071204004318/http://itrs.scu.edu/jclass/group6/history.html |date=2007-12-04 }}.</ref><ref name = "Andrews">ANDREWS, E. Benjamin, [http://cdl.library.cornell.edu/cgi-bin/moa/pageviewer?frames=1&coll=moa&view=50&root=%2Fmoa%2Fscri%2Fscri0019%2F&tif=00190.TIF&cite=http%3A%2F%2Fcdl.library.cornell.edu%2Fcgi-bin%2Fmoa%2Fmoa-cgi%3Fnotisid%3DAFR7379-0019-20 p. 180] of ''Scribner's Magazine'' Volume 18 #1 (January–June 1896); "A History of the Last Quarter-Century".</ref> It is closely related to mercantilism, and it can be seen as contrary to [[classical economics]]. It consisted of these three core policies:
# Protecting industry through selective high tariffs (especially 1861–1932) and through subsidies (especially 1932–1970).
# Government investments in infrastructure creating targeted [[internal improvements]] (especially in transportation).
# A national [[bank]] with policies that promote the growth of productive enterprises rather than speculation.<ref>Lind, Michael: "Lincoln and his successors in the Republican party of 1865–1932, by presiding over the industrialization of the United States, foreclosed the option that the United States would remain a rural society with an agrarian economy, as so many Jeffersonians had hoped." and "...{{nbsp}}Hamiltonian side ... the Federalists; the National Republicans; the Whigs, the Republicans; the Progressives." — "Hamilton's Republic" Introduction pp. xiv–xv. Free Press, Simon & Schuster: 1997. {{ISBN|0-684-83160-0}}.</ref><ref name = "Michael">Lind, Michael: "During the nineteenth century the dominant school of American political economy was the "American School" of developmental economic nationalism ...  The patron saint of the American School was Alexander Hamilton, whose Report on Manufactures (1791) had called for federal government activism in sponsoring infrastructure development and industrialization behind tariff walls that would keep out British manufactured goods ...  The American School, elaborated in the nineteenth century by economists like Henry Carey (who advised President Lincoln), inspired the "American System" of Henry Clay and the protectionist import-substitution policies of Lincoln and his successors in the Republican party well into the twentieth century." — "Hamilton's Republic" Part III "The American School of National Economy" pp. 229–30. Free Press, Simon & Schuster: 1997. {{ISBN|0-684-83160-0}}.</ref><ref name = "Richardson">Richardson, Heather Cox: "By 1865, the Republicans had developed a series of high tariffs and taxes that reflected the economic theories of Carey and Wayland and were designed to strengthen and benefit all parts of the American economy, raising the [[standard of living]] for everyone. As a Republican concluded ...  "Congress must shape its legislation as to incidentally aid all branches of industry, render the people prosperous, and enable them to pay taxes ...  for ordinary expenses of Government." — "The Greatest Nation of the Earth" Chapter 4, "Directing the Legislation of the Country to the Improvement of the Country: Tariff and Tax Legislation" pp. 136–37. President and Fellows of Harvard College: 1997. {{ISBN|0-674-36213-6}}.</ref><ref name = "Boritt">Boritt, Gabor S: "Lincoln thus had the pleasure of signing into law much of the program he had worked for through the better part of his political life. And this, as Leonard P. Curry, the historian of the legislation has aptly written, amounted to a "blueprint for modern America." and "The man Lincoln selected for the sensitive position of Secretary of the Treasury, Salmon P. Chase, was an ex-Democrat, but of the moderate variety on economics, one whom Joseph Dorfman could even describe as 'a good Hamiltonian, and a western progressive of the Lincoln stamp in everything from a tariff to a national bank.'" — "Lincoln and the Economics of the American Dream" Chapter 14, "The Whig in the White House" pp. 196–97. Memphis State University Press: 1994. {{ISBN|0-87870-043-9}}.</ref>

===Other countries===
[[File:Triangle trade2.png|thumb|upright=1.2|Mercantilism helped create trade patterns such as the [[triangular trade]] in the North Atlantic, in which raw materials were imported to the [[metropole|mother country]] and then processed and redistributed to other colonies.]]

The other nations of Europe also embraced mercantilism to varying degrees. The Netherlands, which had become the financial centre of Europe by being its most efficient trader, had little interest in seeing trade restricted and adopted few mercantilist policies. Mercantilism became prominent in Central Europe and Scandinavia after the [[Thirty Years' War]] (1618–48), with [[Christina of Sweden]], [[Jacob Kettler|Jacob Kettler of Courland]], and [[Christian IV of Denmark]] being notable proponents.

The Habsburg [[Holy Roman Emperor]]s had long been interested in mercantilist policies, but the vast and decentralized nature of their empire made implementing such notions difficult. Some constituent states of the empire did embrace mercantilism, most notably [[Prussia]], which under [[Frederick the Great]] had perhaps the most rigidly controlled economy in Europe.

Spain benefited from mercantilism early on as it brought a large amount of precious metals such as gold and silver into their treasury by way of the new world. In the long run, Spain's economy collapsed as it was unable to adjust to the inflation that came with the large influx of bullion. Heavy intervention from the crown put crippling laws for the protection of Spanish goods and services. Mercantilist protectionist policy in Spain caused the long-run failure of the Castilian textile industry as the efficiency severely dropped off with each passing year due to the production being held at a specific level. Spain's heavily protected industries led to famines as much of its agricultural land was required to be used for sheep instead of grain. Much of their grain was imported from the Baltic region of Europe which caused a shortage of food in the inner regions of Spain. Spain limiting the trade of their colonies is one of the causes that led to the [[Dutch independence|separation of the Dutch]] from the [[Spanish Empire]]. The culmination of all of these policies led to Spain defaulting in 1557, 1575, and 1596.<ref>{{Cite web|url=https://mises.org/library/mercantilism-spain|title=Mercantilism in Spain|last=Rothbard|first=Murray|date=2010|website=Mises Institute}}</ref>

During the economic collapse of the 17th century, Spain had little coherent economic policy, but French mercantilist policies were imported by [[Philip V of Spain|Philip V]] with some success. Ottoman Grand Vizier [[Kemankeş Kara Mustafa Pasha]] also followed some mercantilist financial policies during the reign of [[Ibrahim of the Ottoman Empire|Ibrahim I]]. [[Russia]] under [[Peter I of Russia|Peter I]] (Peter the Great) attempted to pursue mercantilism, but had little success because of Russia's lack of a large merchant class or an industrial base.