[Type the company name]
ECS3705 Assignment 1
Semester 2 | Due 25
September 2025
NO PLAGIARISM
[Year]
, Exam (elaborations)
ECS3705 Assignment 1 Semester 2 Memo |
Due 25 September 2025
Course
Economics (ECS3705)
Institution
University Of South Africa (Unisa)
ECS3705 Assignment 1 Semester 2 Memo | Due 25 September 2025. All
questions fully answered.
QUESTION 1 [18] Having studied the Mercantilist school of thought, write a
three-paragraph essay discussing Mercantilist views on wealth creation,
wealth stimulation, and the role of government in the economy.
The Mercantilist school of thought, which dominated European economic policy from the 16th to
the 18th century, defined national wealth not by the productivity of a nation's people or
industries, but by the accumulation of precious metals like gold and silver. This view, known as
bullionism, posited that the total amount of wealth in the world was finite and that economic
relations were a zero-sum game; one nation could only increase its wealth at the expense of
another. Therefore, a nation's primary economic goal was to maximize its treasure by
maintaining a favorable balance of trade, meaning the value of its exports must consistently
exceed the value of its imports. This created a competitive, nationalistic economic environment
focused on the acquisition of bullion.
To stimulate the creation and flow of wealth into the nation, Mercantilists advocated for a policy
of economic nationalism and protectionism. They believed that wealth could be stimulated by
promoting domestic manufacturing and discouraging foreign competition. This was achieved by
exporting finished goods with a high value while importing only cheap raw materials from
colonies or other nations. Colonies were seen as essential components of this system, serving as
both sources of raw materials and captive markets for the mother country’s manufactured goods.
The state would actively use tariffs, quotas, and other trade barriers to protect domestic industries
from foreign rivals and to ensure the flow of bullion into the national treasury.
This economic philosophy placed the government at the center of all economic activity. Far from
being a laissez-faire approach, Mercantilism viewed the state as the primary enforcer and
architect of a nation's prosperity. The government's role was to regulate trade, grant monopolies
to powerful trading companies (like the British and Dutch East India Companies), and subsidize
key industries to make them more competitive. A powerful navy and military were also
considered vital government investments, as they were necessary to protect colonial outposts,
secure trade routes, and enforce trade regulations. This active and interventionist government
role was crucial to ensuring a permanent, positive balance of trade and the sustained
accumulation of national wealth.
ECS3705 Assignment 1
Semester 2 | Due 25
September 2025
NO PLAGIARISM
[Year]
, Exam (elaborations)
ECS3705 Assignment 1 Semester 2 Memo |
Due 25 September 2025
Course
Economics (ECS3705)
Institution
University Of South Africa (Unisa)
ECS3705 Assignment 1 Semester 2 Memo | Due 25 September 2025. All
questions fully answered.
QUESTION 1 [18] Having studied the Mercantilist school of thought, write a
three-paragraph essay discussing Mercantilist views on wealth creation,
wealth stimulation, and the role of government in the economy.
The Mercantilist school of thought, which dominated European economic policy from the 16th to
the 18th century, defined national wealth not by the productivity of a nation's people or
industries, but by the accumulation of precious metals like gold and silver. This view, known as
bullionism, posited that the total amount of wealth in the world was finite and that economic
relations were a zero-sum game; one nation could only increase its wealth at the expense of
another. Therefore, a nation's primary economic goal was to maximize its treasure by
maintaining a favorable balance of trade, meaning the value of its exports must consistently
exceed the value of its imports. This created a competitive, nationalistic economic environment
focused on the acquisition of bullion.
To stimulate the creation and flow of wealth into the nation, Mercantilists advocated for a policy
of economic nationalism and protectionism. They believed that wealth could be stimulated by
promoting domestic manufacturing and discouraging foreign competition. This was achieved by
exporting finished goods with a high value while importing only cheap raw materials from
colonies or other nations. Colonies were seen as essential components of this system, serving as
both sources of raw materials and captive markets for the mother country’s manufactured goods.
The state would actively use tariffs, quotas, and other trade barriers to protect domestic industries
from foreign rivals and to ensure the flow of bullion into the national treasury.
This economic philosophy placed the government at the center of all economic activity. Far from
being a laissez-faire approach, Mercantilism viewed the state as the primary enforcer and
architect of a nation's prosperity. The government's role was to regulate trade, grant monopolies
to powerful trading companies (like the British and Dutch East India Companies), and subsidize
key industries to make them more competitive. A powerful navy and military were also
considered vital government investments, as they were necessary to protect colonial outposts,
secure trade routes, and enforce trade regulations. This active and interventionist government
role was crucial to ensuring a permanent, positive balance of trade and the sustained
accumulation of national wealth.
