Mercantilism is a type of trade and manufacturing system that was employed by almost all the kingdoms in Europe roughly from the 16th to 18th centuries. In some countries it was more strongly applied than in others, but all countries had the same basis: control.
Mercantilism was the opposite of a free market. The two had very different mindsets. Mercantilists thought of a pie. One merchant or another could get a bigger piece than the other. For free marketists, the pie could get bigger, thus everyone can get a bigger piece.
Most countries were focused on exporting, not importing. When a country exports goods, it means that it ships its own goods internationally. Thus, other countries buy their goods and the money comes in. When a country imports, it receives goods from other countries. Thus, this country buys other countries’ goods and the money goes out.
Let’s make a character and go through his day. (more…)