Mercantilism
An economic theory prevalent before Smith, advocating for government regulation of the economy to increase national power.
Updated April 24, 2026
Definition
Mercantilism is an economic theory that emphasizes the role of the state in managing the economy, focusing on accumulating wealth through trade and regulation. It promotes exports over imports to enhance national power.
Smith's Critique
Adam Smith critiqued mercantilism in '', arguing that it stifles competition and innovation. He believed that free trade and open markets would better serve economic interests than government intervention.
Historical
Mercantilism dominated European economic thought from the 16th to the 18th centuries. Smith's critique helped pave the way for modern economic theories, shifting the focus toward capitalism and free markets.
Example
Mercantilism focused on accumulating wealth through trade regulations and government control.
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