Mercantilism - a set of doctrines that insist on the need for active state intervention in the economy. The term was introduced by the economist A. Moncretien.
The essence and types of mercantilism
The main form of state participation in the economy, according to mercantilists, should be state protectionism. It consists of high import duties and the provision of subsidies to domestic producers. Mercantilists considered the main goal of the state to accumulate maximum income. It should spend less than it earns, which excludes the formation of a public debt.
It is customary to distinguish between two types of mercantilism - early and late.
Early mercantilism existed in the last third of the 15th – mid-16th centuries. He was characterized by the theory of monetary balance, which justified the policy of increasing the monetary balance. The retention of precious metals in the country was considered important. The export of gold, silver, as well as local money was severely persecuted. The main provision of mercantilism was also the maximum restriction on the import of goods for which high duties were established. The improvement in the trade balance was perceived not only as a way to increase government revenues, but also to increase employment.
Late mercantilism (2nd half of the 16th-17th centuries) was based on a system of active trade balance, which replaced the monetary one. His key principle was: "Buying is cheaper, selling is more expensive." The policy of mercantilism is aimed at state support for the development of domestic industry. At the same time, severe restrictions on foreign trade were lifted. But the state had to protect the population from the degradation caused by free trade.
