ABSTRACT
Mercantilism is a particular economic doctrine. ‘Political economy’, a scholarly discipline that is now known as economics, and trade and imperialism and colonialism are intimately related. Mercantilism characterises both the first and the second wave of global colonial expansion. Mercantilist economic doctrine states that the wealth of a country depends on the quantity of specie that circulates or is held in its economy. Colonial trades and colonial monopolies crucially rely on a denial of the fiscal sovereignty of the Indigenous rulers, and on an arrogation of fiscal sovereignty by the colonisers – that is how colonies operate. Colonialism inevitably distorts markets: military force is needed to protect monopolies, and military force is needed to protect the ‘free markets’ that monopolies built. A distinction conceptually separating colonialism and capitalism is also important because the colonial institutions of mercantilism eventually became an impediment to emerging capitalist orders, even if they had previously sustained them.
