In a sense, wealth and power rotate in a vicious circle that power generates wealth, which in turn increases power . In the process of illustrate the strength and weakness of the mercantilism and liberalism, the paper attempt to show how tension between Mercantilist and Liberal thinking still remain until today.
This is why a country should aim at immersing as much as possible. The theory also helped to build the current international order by allowing the formation of bodies such as the United Nations, which act as Liberalism and mercantilism essay oversight in many issues affecting the people.
Unlike many other big corporations those days, the Dutch East India Company was equipped with it own army and navy. Cambridge University Press,p11  Heilbroner. Accordingly, the value of goods and services are determined individually due to the dynamics of the market and this creates a flexible economy where any change in price will lead to change in pattern of production, consumption, and economic institution .
Liberal perspective tends to view the states and individuals in a decidedly different light. This paper will examine as well as compare Liberalism and Mercantilism within their historical and practical perspectives in order to prove that both Mercantilism and liberalism have certain strength and weakness.
He argues that, every individual wants their greatest benefit will maximize the benefit of the whole community; this is like the whole community of all the benefits of the individual . However, all activities of arms race and exercising for military are costly.
Fair Trade for All: There is also a claim that a country can only grow rich at the expense of other countries. Mercantilism also influenced the development of the nation state system by ensuring that states become self-sufficient by way of ensuring there is a balance of trade with other states.
Strength and weakness The foremost strength of mercantilism is the predominant of the states as tool of economic development and a major actor in international relations.
By stimulating industry, by rewarding ingenuity, and by using most efficaciously the peculiar powers bestowed by nature, it distributes labour most effectively and most economically: Another weakness of the mercantilism is that it lacks a satisfactory theory of domestic society, the state, and the foreign policy.
To do so, the government firstly should promote its industry by importing cheap source of raw materials while applying protective duties on imported manufactured goods.
The characteristics of liberalism include the development of a system that gives the necessary powers to the government to help protect individual liberty but also prevent the government from abusing those powers. Since liberalism strongly advocate for individual role in economic market, it criticizes monopoly in trade.
He recognised that when a monopoly takes place, the monopolist will increase the prices artificially. Yet, in reality exchange is seldom free and equal but on coercion which is affected by other political factor such as monopoly or monopsony.
The theory also asserts that a country should always aim at maintaining a favorable trade balance by ensuring that exports exceed imports for economic prosperity. The mercantilism theory is characterized by limiting wages, exclusive trade with colonies, export subsidies, maximizing the usage of domestic resources, promoting manufacturing with research and direct subsidies, and high tariffs among others.
Going against mercantilism policies, Adam Smith viewed the management and intervention of government over economy is dangerous and untrustworthy: With regards to worldwide socialist revolution, Lenin believed that it was an urgent task to break from social democratic reformism to new revolutionary communist parties.
These policies lead to trade monopoly and thus increase economic rents whereas monopolistic merchants controlled over certain industries that profit the merchants only. Furthermore, business owners had an inherent tendency to collude to increase prices which lead to an uncompetitive and even failure market.
The development of classical mercantilism was associated with the rise of the modern nation-state in Europe during 15th — 18th century. Introduction to international political economy. Yet, according to Thomas Oatley, mercantilists do basically adhere to three following central propositions .
Finally, some classical mercantilists believed that some economic activities were more valuable than others. The Wealth of Nations. It is a natural result of economic competition that exchange is voluntary, no coercion.
This was the period of time when the idea of state building and state intervention in the market for the purpose of strengthening nation-state security dominated political economic thought. Accordingly, to achieve wealth, countries are not necessarily to produce manufactured goods but they need to focus on primary commodities.Mercantilism vs Liberalism Mercantilism - Wealth and Power interrelated.-State allocates resources - Primacy of military power - Trade beneficial as long as there is surplus (relative gains).
Mercantilism Mercantilism was the primary economic system for trade used between the 16th to the 18th century. It was devised as a political, economic concept that would help in the development of wealthy and powerful states.
Among the political assumptions of the theory is that the government should regulate economic activities in a country. Liberalism and Mercantilism Essay Liberalism and Mercantilism International political economy is an important subdiscipline of international relation.
It has three.
Liberalism and Mercantilism International political economy is an important subdiscipline of international relation. It has three main ideologies, Liberalism, Mercantilism and.
Liberalism and Mercantilism International political economy is an important subdiscipline of international relation. It has three main ideologies, Liberalism, Mercantilism and Marxism. 17th Century English Mercantilism - Mercantilism Essay England in the 17th century adopted the policy of mercantilism, exercising control over the trade of the colonies, thus greatly affecting their political and economical development.
The differences and similarities between.Download