From Mercantilism To The Wealth Of Nations Summary
Summary of “From Mercantilism to ‘the Wealth of Nations’”
The article “From Mercantilism to ‘the Wealth of Nations’” explores the economic ideas of mercantilism and capitalism, and how they affected history. During Christopher Columbus’ voyages, an abundance of silver was found in Peru and Mexico. This silver flowed into Spain, then into Europe, the Baltic, and most of all, to Asia, to satisfy the demand for Asian goods and spices. Unfortunately, the flow of silver into Europe caused serious price inflation and an economic recession once the supply decreased. Consequently, governments tried to regulate national wealth with tariffs and measures, in a system which we now call mercantilism. It was assumed that markets and trade were …show more content…
America looked to Africa to supply its need for plantation workers. Meanwhile, as trade in North America continued to flourish, questions arose about the independence of the colonies. Britain used many regulations to control the American economy so that it complemented the British economy. Adam Smith’s ideas were the first to be based on how wealth is created. His theories opposed the assumptions that underlay mercantilist policies. For instance, mercantilism worked for the interests of producers instead of the consumers, contrary to Smith’s belief that “consumption is the sole end and purpose of all production”. He thought of the economy as a dynamic, self-regulatory system that would work best without government interference, due to natural competition that would ensure efficiency and low prices for consumers. By the same token, he criticized the British policies on its colonies, calling them “badges of slavery”, and argued that all internal trade barriers should be abolished. In conclusion, the discussion around the balance of trade is a sensitive issue that continues today. The “commercial revolution” that occurred before the Industrial Revolution resulted in the development of the global markets that acted as a network for new products to flow through and allowed for the rapid growth of modern
The article “From Mercantilism to ‘the Wealth of Nations’” explores the economic ideas of mercantilism and capitalism, and how they affected history. During Christopher Columbus’ voyages, an abundance of silver was found in Peru and Mexico. This silver flowed into Spain, then into Europe, the Baltic, and most of all, to Asia, to satisfy the demand for Asian goods and spices. Unfortunately, the flow of silver into Europe caused serious price inflation and an economic recession once the supply decreased. Consequently, governments tried to regulate national wealth with tariffs and measures, in a system which we now call mercantilism. It was assumed that markets and trade were …show more content…
America looked to Africa to supply its need for plantation workers. Meanwhile, as trade in North America continued to flourish, questions arose about the independence of the colonies. Britain used many regulations to control the American economy so that it complemented the British economy. Adam Smith’s ideas were the first to be based on how wealth is created. His theories opposed the assumptions that underlay mercantilist policies. For instance, mercantilism worked for the interests of producers instead of the consumers, contrary to Smith’s belief that “consumption is the sole end and purpose of all production”. He thought of the economy as a dynamic, self-regulatory system that would work best without government interference, due to natural competition that would ensure efficiency and low prices for consumers. By the same token, he criticized the British policies on its colonies, calling them “badges of slavery”, and argued that all internal trade barriers should be abolished. In conclusion, the discussion around the balance of trade is a sensitive issue that continues today. The “commercial revolution” that occurred before the Industrial Revolution resulted in the development of the global markets that acted as a network for new products to flow through and allowed for the rapid growth of modern