mercantilism

Mercantilism is an economic theory and practice that dominated Western Europe from the 16th to the 18th centuries. It is characterized by government intervention aimed at increasing a nation's wealth by maintaining a favorable balance of trade—maximizing exports and minimizing imports—to accumulate precious metals like gold and silver. Mercantilist policies favored protectionism through tariffs and quotas on imports, supported domestic industries, and often involved close cooperation between governments and merchants or trading companies. Colonies were used to supply raw materials and serve as exclusive markets, helping the mother country build wealth and national power. This economic system prioritized state power and wealth accumulation, often linked to military strength and territorial expansion. It began to decline with the rise of free-trade ideas promoted by economists like Adam Smith in the late 18th century.