Mercantilism is among the first theories that ever existed since the 16th century. However, it is a bankrupt theory that has no place in the modern world. The reason behind the bankruptcy of the theory is the assertion that the theory holds. It is in the assertion of the theory that the country can only achieve its best interest by maintaining the trade surplus. It suggests that countries need to export more than what they import. It is possible for the said countries to achieve this by the government intervention to regulate the trade sector through the imposition of tariffs and quotas. The theory, therefore, goes against the modern global notion that encourages free trade among countries. In cases where the mercantilism theory can hold, then any economic injuries and failures would be recorded. Many other economists including Adams Smith and David Ricardo have boldly come out to fold the theory as one that has much shortsightedness.
Keywords: Mercantilism, bankrupt, surplus, trade, import, export, tariffs
Mercantilism is a bankrupt theory that has no place in the modern world.
Mercantilism was the first theory of the international trade of its kind that emerged in England in the mid- 16th century. The theory asserted that the country could only achieve its best interest through maintaining trade surplus at the same time exporting more than what it can import. To maintain the surplus in the trade balance, the doctrin…
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