mercantilism vs capitalism

mercantilism vs capitalism mercantilism vs capitalism (Christian Rafael Mora Parga, Rafael Henriquez)7A. The main economic system used during the sixteenth to eighteenth centuries. The main goal was to increase a nation's wealth by imposing government regulation concerning all of the nation's commercial interests. It was believed that national strength could be maximized by limiting imports via tariffs and maximizing exports.2. The expansion of the states was also a cause of migration: the Spanish domination of the Netherlands for example did not only bring Spanish soldiers and civil servants to the Netherlands, but also made Dutch "exultanten" leave their country during the 100-year war. In addition, newly conquered or empty areas had to be populated. This was the case for Germans who moved to Russia and Prussia, as well as for Russian migrants who, between the 16th and the 18th century, moved to areas near the Black Sea and Siberia that had been taken over by Russia. Facts on these migrants can be found below under the heading: expansion to rule valuable people. The colonization of new areas overseas also caused migration and made it possible to meet very different cultures from the other end of the world. Communication had been approved and so had the means of transportation. A large stream of migrants developed, flowing between Europe (Spain, Portugal, England, France and the Netherlands) and the new colonies in Northern and Southern America. Unfavorable circumstances in the form of bad hygene, lack of proper nutrition, climate and disease all took their toll on the lives of migrants both while travelling to and while residing in the colonies. As a result, many more migrants were needed in order to be able to sustain the colonial organizational system and economy. Partly to satisfy this need, a second migrational stream was set in motion by colonial powers, taking many slaves from Africa to America in order to perform manual labor in the colonies. The migration of Europeans to America also had an effect within Europe as many people seeking work moved towards the harbours fom where the (transatlantic) ships left. Also, the Europeans that left for America to earn more money than they did at home left behind jobs which were taken by laborers coming from poorer countries.3. Capitalistic competition policies are usually based on the efficiency of economic feasibility, while socialistic competition policies are often concerned with unity in a single competitive market. The opposite of a free market is a controlled market. The government controls supply and the price of goods and services. Capitalism began in seventeenth century Europe and is associated with the European Enlightenment. The European Enlightenment focused on the idea of individual freedom to pursue one's own economic interests in order to make a profit. Capitalism realizes a profit through the means of production together with labor to produce the goods. The labor in a capitalist system is called wage labor as wages must be paid to the laborers. The means of production means everything else required producing goods including land and the property rights to it. Businesses run on capital and capital is what capitalists have.4. The history of capitalism can be traced back to early forms of merchant capitalism practiced in the Middle East and Western Europe during the Middle Ages, though many economic historians consider the Netherlands as the first thoroughly capitalist country. In early modern Europe it featured the wealthiest trading city (Amsterdam) and the first full-time stock exchange. The inventiveness of the traders led to insurance and retirement funds as well as such less benign phenomena as the boom-bust cycle, the world's first asset-inflation bubble, the tulip mania of 1636-1637, and according to Murray Sayle, the world's first bear raider – Isaac le Maire, who forced prices down by dumping stock and then buying it back at a discount. Over the course of the past five hundred years, capital has been accumulated by a variety of different methods, in a variety of scales, and associated with a great deal of variation in the concentration of economic power and wealth. Much of the history of the past five hundred years is concerned with the development of capitalism in its various forms, its condemnation and defense, and its rejection, particularly by socialists.5. The capitalism and the mercantilism have similar things in the points of the consumption goods Mercantilism was the philosophies countries maintained in regard to economic politics before Adam smith (wealth of nation, 1776). It was dismally a science and most policies were made very anecdotal... it didn't try and look at economies in a scientific way and just relied on 'causation- correlation' techniques, like misinterpreting causes with non-causes. Capitalism, at it's heart, is the belief that left to their own devices, people working in their own self-interest economically will create a large, efficient, economy. This does not mean that there should be no rule of law or no role for government for that matter. Smith even says that 'businessmen will tend to bring forth ideas of how best to make the most money for their goods when they are together" but underlying that is the notion that people who voluntarily correspond and enter a transaction of buying and selling of goods must deem it beneficial to do so, on both sides of the transaction. Mercantilism, by contrast, believed that trade was a zero-sum interaction- for the state, and made to have one state (country) take from another, thereby implementing domestic product-protectionist laws and rules (and beliefs). Smith argued against that. University of Chicago takes it one step forward and notes that aside for cases of fraud (which is actually fairly rare, if all businesses were like Enron- capitalism would have never gotten to the point it is today) it is only coercive economic interactions that can be assumed to not be beneficial to both parties-- one example could be social security. The fact that government forces people to pay into this means there is no mechanism which tells the efficiency or need of the program. If only the people who wanted s.s. paid into it, it would be a much more highly efficient service.