Mercantlism and capitalism - Essay Example

Download file to see previous pages... on the assumption that individualism is good for fostering competition in the society where people further their skills to increase their competitiveness thus resulting in economic growth.
However, mercantilism philosophy encourages monopoly where property is controlled by influential people who receive protection and support from the government through subsidies (Degen 13). Capitalism, therefore, gives individuals freedom as well as equal opportunities to create wealth in a free market. In this case, the philosophy gives the right to private property where an individual’s freedom to consume preferred encourages more production resulting in more wealth for the nation. Nonetheless, mercantilists propose restrictions and regulations on private ownership since it is a way individuals amass wealth for themselves at the expense of economic growth (Degen 14). Therefore, capitalism theory encourages private property ownership and advocate consumer spending and enjoying of life as a road to economic growth while mercantilism philosophy perceives individualism as extravagant and that consumers should stop spending to prevent the flow of wealth from the economy.
Mercantilism was common during the colonization periods where the governments enacted laws and policies to regulate the economy for their benefits (Degen 16). They believed that mercantilism philosophy of accumulation wealth would increase net inflow into their nations. The best ways that the mercantilists ensured wealth accumulation included controlling their shipments, stopping importation of goods and services, and increasing tax on imports. The mercantilism philosophy was a disadvantage to the poor as the governments would grant monopoly charters where trade was concentrated within an easily controlled group with restrictions on participation in trade. British East India Company is among the international traders that benefited from the mercantilism or monopolistic economic activities (Degen 16). At this ...Download file to see next pagesRead More