Mercantilism and the Physiocracy

Individual economicalal activity was less controlled by the custom and tradition of the feudal society and the authority of the church. Production of goods for securities industry became more important and land, labor and capital began to be bought and sold in markets. This laid the groundwork for the Industrial Revolution in the second sectionalisation in the 18th century. However, we have to remember, that still we are talking round pre-industrial world, where agriculture is the most important sector of the economy.During this period from 16th to the fractional of 18th century, economic thinking developed from simple applications of ideas well-nigh individuals, households and producers to a more complicated view of the economy as a clay with laws and interrelationships of its bear. Mercantilism. Mercantilism is the name given to the economic literature and practice in Europe of the period in the midst of 1500 and 1750. Although mercantilist literature was produced in all t he growth economies of Western Europe (and I should add some Eastern European, for ideal in Poland, economies too), the most significant contributions were made by the English and the French.Whereas the economic literature of scholasticism was written by medieval churchmen, the economic possibility of mercantilism was the work of secular people, mostly merchandiser businessmen, who were privately intermeshed in selling and buying goods. The literature they produced focused on questions of economic policy and was usually related to a particular interest the merchant and writer (in one person) was trying to promote. For this reason, there was often considerable suspense regarding the analytical merits of particular arguments and the validity of their conclusions.Few authors could claim to be sufficiently stray from their private issues and offer objective economic analysis. However, throughout the mercantilism, both the standard (there were over 2000 economic works published in 16th and seventeenth century) and quality of economic literature grew. The mercantilist literature from 1650 to 1750 was of distinctly higher quality, these writers created or touched on nearly all analytical concept on which Adam Smith based his Wealth of Nations, which was published in 1776.The bestride of mercantilism has been characterized as one in which every person was his own economist. Since the various writers between 1500 and 1750 held very diverse views, it is difficult to generalize about the resulting literature. Furthermore, each writer tended to concentrate on one topic, and no atomic number 53 writer was able to synthesize these contributions impressively enough to influence the accompanying evelopment of economic theory. Secondly, mercantilism can best be understood as an intellectual reaction to the problems of the times.In this period of the decline of feudalism and the rise of the nation-states, the mercantilists seek to determine the best policies for prom oting the strength and wealthiness of the nation, the policies that would best consolidate and annex the power and prosperity of the developing economies. What is especially important here is the mercantilistic impudence that the total wealth of the world was fixed and constant. These writers applied the assumption to rade between nations, concluding that any increase in the wealth and economic power of one nation occurred at the expense of other nations (the rest of the world).Thus, the mercantilists accent international trade as a mean of increasing the wealth and power of a nation. Using some modern game-theoretic language, we may say, that they sensed economic activity and international trade in particular as a zero-sum game, that is a game, where it is impossible for both players to win (In a two-person zero-sum game, the wages to one player is the negative of that going to the other player). So consort to mercantilists, it is impossible to increase a global wealth of t he world in effect of international trade.It is a very sad assumption, and modern economists do not snare it. The goal of economic activity, according to most mercantilists, was production, not consumption, as classical economists would later have it. They advocated increasing the nations wealth by simultaneously encouraging production, increasing exports and holding down domestic consumption. Thus, in practice, the wealth of nation rested on the poverty of the many members of society. unrivaled again, they advocated igh level of production, high level of export and low domestic consumption.