Mercantilism: Giving Preference to Political Entities

The economy is the key to power, this is strongly demonstrated during the period of the Renaissance where a new economic system is established; mercantilism and new goals are aimed at.

The purpose of this essay is to understand 'how the economic system of mercantilism favoured the political entities called absolute states'. Answering this question will help to understand the relationships of these two systems. For this, it will be necessary to show that mercantilism is one of the main elements of the economic social development starting from the 15th /16th century and that this creation shows the will of a new economic expansion. To understand this, the first part of this work will be based on the functioning of the mercantilism system, as well as its socio-economic impacts over time. And in the second part will explain how this influences states with which interdependence is created.

The economic system of mercantilism did not appear like that in the social functioning of the Renaissance. It was built gradually by the states, which sought above all to promote their economic expansion and forged a dominant position in the world.

It is here that comes to the mercantilism arose from the emergence of the merchant towns and states. The merchant towns have spawned the evolution of the cities, which protect themselves with walls and canals, thus the economy and the population has been better able to control, which means with a better-established power. Indeed, the resulting improvement in infrastructure and markets has secured to the nobles a share of the growing wealth and thus strengthened their power. Yet the economy was limited, so then, the states needed something that allowed them to increase this process of power expulsion. That's where mercantilism came in, a system that promoted government regulation of the economy of the territory, specifically the state that was government-controlled. The system benefited from a favourable balance of trade, with exports of expensive manufactured goods and the import of cheap raw materials such as metal, to keep a high stock and therefore good competitiveness on the market. Mercantilism answers the four main questions of economics, which are, what should we produce, how much should we produce, how should we produce and who should we consume?

It is to these questions that Jean Baptiste Colbert responded as minister of finance of Louis XIV (17th century) king of France, he as perfected the system of mercantilism. Colbert's idea is to import cheap raw materials and then process them through domestic industries and resell them abroad. In short, the objective being to make trade surpluses. To create the French industrial fabric, Colbert goes as far as recruiting foreign workers to start in sectors where France has little experience. It sets up state monopolies. In 1664, he set up a customs tariff to protect French industries and even subsidized national companies to help them cope with foreign competition. In 1673, he was the main actor in the creation of the loan fund that would allow the state to finance its expenses. Among its expenses, one can note the development of the infrastructures of the country like the roads and naval constructions.

The mercantilist thought had been developing there for half a dozen generations bore Colbert, he was a man of action, invested with power, who accepted the mercantilist concepts as the only natural and logical means of achieving the desired end a powerful and rich France, united under a glorious monarch. '

The states were integral to the development of mercantilism. That is why the economic system of mercantilism is very closely linked to the political system based on absolutist states.

Your goal as a state is to have the most gold as possible. which explains why all these political-economic changes were allowed because they reinforced the lords' stumbling position and above all the growing power of the monarchs. In this case, there are new processes that have been put in place, for the ascension of absolutist states, like the strengthening of centralized government over contiguous territories, which allows better socio-economic control. There has been a strengthening of law, order and security. All these changes benefit the merchants, who can practice their activity fully and even intensify with a favourable balance of trade. It seems that progress is making progress because the expansion of economic activities which has been taking place between towns has soared the population which is enlarged, but which did not themselves produce a food surplus. This a new society with bakers, artisans, artists and much more. This is entirely beneficial to the market because it allows for more merchandise, more competitiveness, and therefore a better economic return. So there is also a profound change in society that has developed more complex social forms that are more diverse. A new society in the image of the states that can be called a modern nation-state.

This is especially beneficial to kings or monarchs because the merchants could provide them with money to support their armies and conquests.

• Systematic policies to promote economic production and commerce
• The success of Absolutist states was largely dependent on warfare
• Wars helped to promote territorial consolidation, centralisation, differentiation of the instruments of government and monopolisation of the means of coercion.

All of these things were fundamental processes of state-formation.

This essay demonstrates that the economic system of mercantilism is as important as the states for the good health of a nation. They grew rich thanks to the mercantilism for which they put in place policies to secure a favourable balance of trade, to allow the trade to develop over a long term while increasing their absolute power. This enterprise was a real socio-economic success because it allowed colonization with the creation of incredible companies, like the East India Company ship, which means a massive expansion of the power of the political entities, which was able to set up new international trade routes. This economic system is therefore the tool of the absolute power of States.