ABSTRACT
At the opening of the modern era, a new kind of economic practice and a number of novel and interdependent economic theories make their appearance in the form of what is known as mercantilism or the mercantile system. As List was the first to point out, the use of this name (introduced by Adam Smith) is not wholly warranted. The advocates of the new economic policy were quite as much concerned to further industrial developments as to promote the exchange of merchandise. Nor have we to do with anything that is strictly entitled to be called a “system”, or with a circumscribed body of doctrines; the term “mercantile system ” is loosely used to denote the aggregate of the principles actually applied by governments and men of business in the economic life of those days—though it is indisputable that these principles have an underlying general conformity. Mercantilism, therefore, was not deliberately thought out and artificially created by any individual; it was a creation of the time spirit, or a spontaneous growth of the time. Oncken aptly termed it “a system of sovereign welfare policy”; it was a system of political absolutism and centralisation in favour of the burgherdom and mobile capital, to the detriment of the nobility and the lords of the soil.—To throw light on the matter, let us first glance at the economic processes of this period of “early capitalism”.
