Mercantilism

Mercantilism is a policy for a nation to increase its wealth based on exporting more goods to other nations and territories than importing from them. Relying almost exclusively upon interventionist and centralized government, a mercantilist system relies heavily upon giving subsidies to politically favored businesses, often under the guise of infrastructure development combined also with a central bank with monopoly power. Additionally protectionism is favored and the nationalization of industries is welcomed, generally if it promotes export and trade.

An excess of exports over imports increased the balance of trade and the acquisition of gold by the nation. Also, acquiring and using colonies to supply raw materials and provide foreign markets was a key aspect of mercantilism.

Mercantilism once was the economic and trade policy of several European countries, such as Britain and France, and their colonial empires. Britain's government-controlled East India Company played a central role during the Boston Tea Party crisis. The India company routinely held exclusive monopoly powers granted to them by the crown.

As mercantilism was the British policy at the time of the American Revolution, the United States initially rejected mercantilism, though many of the Federalists, especially Alexander Hamilton, were huge proponents of mercantilism, disagreeing only with who was in charge. The nineteenth century in the U.S. was primarily an economic conflict between mercantilists versus capitalists in the North, as well as feudalists in the South with its institution of slavery. Eventually, mercantilism triumphed with Abraham Lincoln and the Republicans. The economy of the U.S. since then has been primarily mercantilist with socialistic welfare programs.