Mercantilism

Mercantilism, economic system prevailing in 16th- to 18th-century western Europe that reflected the increased importance of the merchant. Mercantilism was based on the concepts that a country's wealth was founded on its supply of gold and silver, and that in a world of limited resources one nation could prosper only at the expense of another. Mercantilists favored tariffs in order to secure a favorable international trade balance and thereby maintain reserves of previous metals. Their protectionism was succeeded by the free trade arguments of the French physiocrats and later the policy of laissez faire. Today, mercantilism sometimes refers to policies that protect domestic businesses from foreign competition.

See also: Colonialism.