Mercantilism VS Capitalism

The Difference Between and About Them


Mercantilism was a popular economic philosophy in the 17th and 18th centuries. In this system, the British colonies were moneymakers for the mother country. The British put restrictions on how their colonies spent their money so that they could control their economies.

Mercantilism was a very independent concept and left people to have to rely on their country and their country only. Because if a country has the concept of mercantilism they only believed that they should not buy things from other countries and that in order to excel and gain more money, they should only distribute things to have a gradual increase in money.

It is directly related to the maintenance of a positive ‘balance of trade’ That is, in order to remain economically and politically viable a country must export more than it imports. Such a positive balance of trade, according to mercantilism provides a surplus in wealth and goods.


Capitalism is a social system based on the principle of individual rights. Politically, it is the system of freedom. Legally it is a system of objective laws (rule of law as opposed to rule of man). Economically, when such freedom is applied to the sphere of production its result is the free-market.
Capitalism was very much more of a team then mercantilism. Most countries have capitalism compared to mercantilism because of the benefits and the easier distribution of goods. They distribute things and in return they get items that other countries will distribute to them in return.
A combination of economic practices that was created in Europe between the 16th and 19th centuries. Central characteristics of capitalism include private property,capital accumulation, wage labour and competitive markets.


Capitalism evolved from mercantilism and while both economic systems want profit (and only profit), these systems have differences in the way this is accomplished. Capitalism is an economic system that works around the concept of wealth in the pursuit of growth for the nation while mercantilism focuses on the gain of wealth through extraction of wealth which they believe is measured by the amount of gold bullions that the nation has in its possession. Wealth extraction efforts are changed by colonization to gain more wealth.


Now that I have learned more about Mercantilism and Capitalism I believe that it is very important to at least have a basic understanding in these concepts because in different places you can see that they may use entirely different concepts economically and learning about these two will definitely help you if you plan on living somewhere foreign in the future.


Now that we know about these concepts, we can understand just how our economy really works, you can see that because of these concepts 'big' people that are the head of big companies and businesses are only focused on profit and materialistic things and in reality thats kind of inhuman. But the future of our society can help change that, by helping pinpoint the big problems before they become problems.