Question

what are some differences of the relationship between the state and capital, according to mercantalism and neoclassical capitalist economic systems?

Answer 1

Mercantalism:

Mercantalism in the school of economics related to the exports od the country and trade.

- It is a type of economy, which trys to increase wealth by raising exports simultaneosly by minimizing imports.

- This philosophy believes that, there is limited amount of wealth in the world economy, where all the nations in the world are competitng with each other.

- This philosophy also belives in imports enrich the importers at the cost of domestice economy expenses.

- In this economy the role of state would be in controlling imports by introducing different policies like tariffs, regulatory hurdeles like quota system etc.

- Majorily this type of economic system invites different involuntory trade wars.

Capitalism:

Capitalism in the schoool of economics introduced around competition and prouctive. This is the best example of survival of the fittest.

- It is a type of economy, trys to increase wealth by increasing the productivity of the labour and increasing the quality of the product.

- The invvolvement of private individuals is more in this type of economy.

- The role of state is more of minimal, sticking itself in providing flexible environment to thr private individuals.

- Under this philosophy, economy runs arounsd the demand and supply of the goods.

- By improving the productivity of the nation, automatically the wealth raises, by providing good quality of good and services.