How does not doing mercantilism help benefit the ruling country?
This is to help me on a essay I can’t find anything on how not doing mercantilism. Thank you
Are you crystal clear on the meaning of mercantilism?
Read many of the definitions here:
https://www.onelook.com/?w=mercantilism&ls=a
I know what it means, I just have trouble with it but thank you
This may help you.
http://www.differencebetween.net/business/difference-between-capitalism-and-mercantilism/
To understand how not practicing mercantilism can benefit a ruling country, it is important to first understand the concept of mercantilism itself. Mercantilism was an economic theory that emerged in the 16th century and dominated economic thinking in Europe until the late 18th century. It essentially promoted government intervention in economic affairs to grow a country's wealth and power.
In the context of mercantilism, countries sought to achieve a favorable balance of trade by exporting more than they imported. This typically involved imposing tariffs, quotas, and other barriers to restrict imports, while also heavily subsidizing domestic industries to promote exports. However, there are several reasons why not practicing strict mercantilism can be beneficial for a ruling country:
1. International Trade and Cooperation: By embracing free trade instead of mercantilism, a ruling country can promote international trade and cooperation. Allowing for the free flow of goods and services across borders can lead to the exchange of ideas, technologies, and resources, fostering economic growth and development.
2. Comparative Advantage: One of the key principles of free trade is comparative advantage. Each country has different resources, skills, and expertise, and by allowing specialization and trade according to comparative advantage, countries can produce goods and services more efficiently. This leads to increased productivity and a higher overall standard of living.
3. Market Access: Not practicing mercantilism allows a ruling country to access a broader range of goods and services from other countries. This benefits consumers by providing them with a greater variety of products at potentially lower prices. Additionally, increased market access can stimulate competition and innovation within domestic industries.
4. Economic Efficiency: Free trade encourages competition, which drives efficiency within industries. Domestic companies are forced to improve productivity, lower costs, and innovate to compete with foreign competitors. This can lead to overall economic efficiency and productivity gains in the long run.
5. International Relations: Embracing free trade policies can also foster positive international relations. By promoting an open and fair global trading system, a ruling country can build partnerships and alliances with other nations, enhancing diplomatic ties and mutual cooperation.
When researching for your essay, it may be helpful to look for sources that discuss the benefits of free trade, globalization, and comparative advantage. Economists such as Adam Smith, David Ricardo, and their works, particularly "The Wealth of Nations" and "Principles of Political Economy and Taxation," can provide valuable insights into the arguments against mercantilism and in favor of free trade.