Question

The Mercantilist and Physiocratic economic schools of thought are the earliest recognizable school of thought in human history. This question has the aim to help you to review these schools of thought and to encourage your critical thinking. a) Identify a similarity with respect to economic ideas between those schools of thought. Your answer needs to provide at least one paragraph. (1/2 point) b) Identify a difference with respect o economic ideas between those schools of thought. Your answer needs to provide at least one paragraph. (1/2 point) c) Discuss the school of thought between these two that you are less likely to support or that you dissagree. (1 point)?

Answer 1

a) Mercantilists and physiocrats both were in the favour of having trade for the growth and prosperity of the economy. No school of thought was in favour of having a closed economy. Both school of thoughts were in the favour of increasing exports to help the nation develop.

b) Mercantilists were in the favour of intervention of government for regulating trade and in the working of market. Physiocrats on the other hand were not in the favour of intervention of government and wanted that labour and commerce should be freed from all kind of restrictions. There should be no interference by the government in the working of the economy.

c) The idea of Mercantilists should not be agreed with. The reason for this is that the intervention of government in the working of economy will lead to hampering of competition in the economy and will lead to less welfare for producers and consumers. Working of economy should be left without government intervention and open to market competition for having good quality of products and services and that too at lower prices.