THE CONCEPT OF MERCHANTILISM IN THE HISTORY OF FINANCIAL THOUGHTS
THE CONCEPT OF MERCHANTILISM IN THE HISTORY OF FINANCIAL THOUGHTS

Summary/Abstract: Between 1500 and 1800 financial thoughts and practices were called Merchantilism in Western European countries. Though the economical politics of this period were practiced differently in each country, they had some common features, as well. In medieval age, local administration units had a big power in the control and regulation of economy. They were taxing the incoming and outgoing commodities in their own working area. Merchantilism is a trend aiming to centralize in political and economical aspects and to increase the authority of the king. According to Merchantilism, valuable metals such as gold and silver both finance the wars and constitute the resource of economical and political power. With this respect, the aim should be increasing the valuable metal stocks of the treasure. Importation of manufactured materials and high duty taxes are prohibited while importation of raw materials is legalized. A great deal of importance was given to the international transportation services as much as to the exportation in order to increase the gold stock. For this reason, they tried to constitute powerful sea trade fleets. Increase in population was encouraged and immigration was prohibited.

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