Question

Mercantilism is a bankrupt theory that has no place in the modern world. Discuss.

Answer 1

Mercantilism is the first theory of international trade back in the mid-16thcentury where gold and silver were the currency of trade between countries. Mercantilism supported that countries should simultaneously encourage exports and discourage imports to ensure a surplus in the balance of trade that determine a nation’s wealth, prestige, and power. The economic development of a country would ultimately crater under mercantilism in the modern world. This is because we are currently living in the century where free trade is encouraged in many countries where we all grow as a global marketplace. Since government regulation is frowned upon by the people in the United States, the theory mercantilism would have no chance of success if it were to be applied as it would cause a dramatic economic downfall in the U.S economy. In addition, it would also likely lead to a dramatic economic recession in the world as the U.S. is one of the world’s largest economy after China.

Mercantilism Designed to increase exports of a nation to maximize the wealth Economic regulations used to promote exports.