Mercantilism is an ideology and practice that believes in the benefits of profitable trading, puts commerce or trade and business as the foremost priority of a nation and propagates the concept that only such a practice is the best way ahead for a nation, to its prosperity and better future. Mercantilism has many variants. There are economic and social offshoots. There are free market aftermaths and protectionism along with several other schools of thought that have resulted as a direct impact of mercantilism that was born in Europe.
List of Advantages of Mercantilism
1. A Prosperous Country
Mercantilism leads to profits and that paves the way for a country to become prosperous. A world that is driven by money and economics trumps everything else, it is only befitting to focus on trade, commerce and business which will get the people better and more secured lives, more money to spend and all the riches that money can buy.
2. Economic Growth
Mercantilism leads to more trade, which will lead to economic growth. The increasing trade will certainly spike demand and hence industrial growth will follow. It is not confined to any one industry. Export of foods will lead to growth in agriculture. Manufacturing growth is unavoidable as exports of all kinds of goods increase. Every facet of an industry or the larger economy that will be touched by mercantilism will experience a boom.
3. Jobs & Entrepreneurship
The growth will have a direct impact on jobs. People will have work, they will get paid and the unemployment problem will cease to remain an issue. Mercantilism will also boost entrepreneurship. With more trade and higher profits, more aspiring entrepreneurs will get the funds and have the ability to take risks to run their own businesses, also to expand and venture into new territories.
4. A Stronger and More Influential Nation
Mercantilism leads to greater influence in a region and across continents. Nations depending on the goods and services of a country will be indebted in many ways. Foreign relations among countries will improve. The country benefiting from mercantilism will have an irrefutable advantage too. It will have more resources, financial and military. There will be new inventions, encouraged by prosperity and the perennial quest for growth.
List of Disadvantages of Mercantilism
1. Grave Consequences
Mercantilism is a one way traffic. Colonialism was a direct fallout of mercantilism and everyone knows how that panned out from the United States to India. The focus being entirely on money, everything else takes a backseat, from human rights to will of people. Trade and commerce cannot be the only benchmarks for a country’s well being. There are many other aspects of life. Mercantilism leads to constant strife among counties. Every country will want the best for itself and that will lead to protectionism, military conflict, sabotage and all kinds of heinous games in the international arena.
Natalie Regoli is a child of God, devoted wife, and mother of two boys. She has a Masters Degree in Law from The University of Texas. Natalie has been published in several national journals and has been practicing law for 18 years.