Question

Who are the mercantilists? 2. What policies did they advocate and how did they expect these policies to be achieved? 3. Explain the problems associated with their policies. 4. What is the relationship between these policies and absolute advantage? 5. Do you believe that these policies are currently being practiced and which country and how?

Answer 1

MERCANTILISM

mercantilism is a collection of economic thought that came into existence in Europe during the period from 1500 to 1750.it is an economic doctrine or philosophy prevalent during the 17th and 18th centuries.it is prevalent in European countries such as England, Spain,France,Portugal and Netherlands as these developed into nation states. this was advocated by a a group of men like merchants, bankers, government officials and even philosophers. mercantilists view is that an important way to grow rich by a nation by acquiring precious metals.the way for a nation to become rich and powerful was to export more than import.the resulting export surplus would then be settled by an inflow of bullion,or precious metals primarily gold and silver.the more the precious metals a nation had , the richer and more powerful it was.the government had to do all in its power to stimulate the nation's exports and discourage and restrict imports.a nation could gain in international trade only at the expense of other nations ( trade was a zero sum game). where Adam smith positive sum game and absolute advantage follows the mutual benefit in trade. mercantilism has many modern features . it is highly nationalistic, well-being of home nation is viewed as prime importance, favoured the regulation and planning of economic activity as an efficient means of fostering the goals of the nation, viewed foreign trade with suspicion. mercantilism, though declining, is alive and well in the 21st century. trade restrictions are demanded to protect domestic jobs from foreign competition and to encourage domestic high-tech industries. in 2017 United States chose populist Donald Trump for the presidency. Trump's policies follow a form of neo-mercantilism.