, ECS3705 Assignment 1
Semester 2 2025
DUE 25 September 2025
Use this document as a guide and for references to answer your assignment
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.
Mercantilist Views on Wealth Creation
The Mercantilist school of thought, dominant in Europe between the 16th and 18th
centuries, viewed wealth primarily in terms of the accumulation of precious metals
such as gold and silver. To them, a nation’s economic strength depended on its
stock of bullion, which served both as a measure of prosperity and as a source of
power in international relations. Unlike later economists who emphasized
production and productivity, Mercantilists equated wealth directly with money and
sought to maximize national reserves through a favorable balance of trade. This
meant encouraging exports while discouraging imports, as trade surpluses were
seen as the main avenue for increasing national wealth.
Mercantilist Views on Wealth Stimulation
To stimulate wealth, Mercantilists advocated policies that promoted domestic
industry and expanded markets for local goods. They encouraged the establishment
of monopolies, the use of tariffs on foreign products, and the support of
manufacturing sectors that could substitute imports with home production. Colonies
were also viewed as essential in stimulating wealth, as they provided raw materials
for the mother country and served as captive markets for finished goods. In this
way, economic activity was designed not merely to meet domestic needs but to
maximize trade surpluses that would bring more bullion into the country. Wealth
stimulation, therefore, was less about innovation and productivity and more about
manipulating trade and commerce to strengthen national power.
Semester 2 2025
DUE 25 September 2025
Use this document as a guide and for references to answer your assignment
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.
Mercantilist Views on Wealth Creation
The Mercantilist school of thought, dominant in Europe between the 16th and 18th
centuries, viewed wealth primarily in terms of the accumulation of precious metals
such as gold and silver. To them, a nation’s economic strength depended on its
stock of bullion, which served both as a measure of prosperity and as a source of
power in international relations. Unlike later economists who emphasized
production and productivity, Mercantilists equated wealth directly with money and
sought to maximize national reserves through a favorable balance of trade. This
meant encouraging exports while discouraging imports, as trade surpluses were
seen as the main avenue for increasing national wealth.
Mercantilist Views on Wealth Stimulation
To stimulate wealth, Mercantilists advocated policies that promoted domestic
industry and expanded markets for local goods. They encouraged the establishment
of monopolies, the use of tariffs on foreign products, and the support of
manufacturing sectors that could substitute imports with home production. Colonies
were also viewed as essential in stimulating wealth, as they provided raw materials
for the mother country and served as captive markets for finished goods. In this
way, economic activity was designed not merely to meet domestic needs but to
maximize trade surpluses that would bring more bullion into the country. Wealth
stimulation, therefore, was less about innovation and productivity and more about
manipulating trade and commerce to strengthen national power.
