Written by Fmi.Online Friday January 6, 2023
Mercantilism is an economic system that proposes that a nation’s wealth increases by having surplus in the balance of trade. It is a concept also known as commercialism, which is based on the belief that a country should encourage exports but at the same time to limit imports with the aim of driving economic growth.

Explanation :

Mercantilism used to be a popular economic system for a long time until the 18th century, namely in European countries like England and France. It substituted feudalism and assumed that the best way to increase nation prosperity was to accumulate gold and precious metals in the hands of the state. This would be possible by maximizing exports, imposing high barriers to imports and encouraging economic self-sufficiency. Stocks of gold also meant powerful governments that invigorated nationalism and colonialism. Under mercantilism, the State had strong intervention in the economy. But this system proved to be disadvantageous because some important elements to guarantee sustainable well being were undervalued, such as education, investment and specialization. On the other hand, self-sufficiency was not a feasible option for small nations. Although it is now considered an outdated, inappropriate system, some mercantilist arguments tend to arise from time to time. Nationalism and protectionism are ideologies that still appear despite the fact that market freedom is nowadays the prevalent economic system in most prosperous countries.

In a nutshell :

  • Mercantilism was an economic system of trade that spanned from the 16th century to the 18th century.
  • Mercantilism was based on the idea that a nation's wealth and power were best served by increasing exports and so involved increasing trade.
  • Under mercantilism, nations frequently engaged their military might to ensure local markets and supply sources were protected, to support the idea that a nation's economic health heavily relied on its supply of capital.
Our Courses are designed to boost your career

Launch your career with Fmi’s Learning Pathway

Choose a learning pathway that best meets your needs and ambitions. Not sure which Fmi learning pathway is right for you? Explore our CareerBuddy videos for help and advice.

Investment banking pathway
  • courses-clock60+ hours
  • courses-desktop9 courses

Investment banking offers many exciting career opportunities for students. From Financial Analysts to Investment Management, and Sales & Trading to a wide range of roles in infrastructure such as IT, Risk or Compliance. This pathway is designed to help you understand the investment banking industry, the roles investment banks are recruiting for, and most importantly, help you to develop the practical skills you need to get into the industry and your preferred role whether this be as part of a school leaver, intern or graduate program.

FMI Online Student join-student-img2 FMI Online Student
55,000+ students currently enrolled
Global markets pathway
  • courses-clock70+ hours
  • courses-desktop10 courses

Global markets provide a range of important products and services to corporates, institutions and governments worldwide from executing trades and managing risk to providing quality research content. A key business area in all investment banks, global markets offers a wide range of career paths for students to consider across all functions and at all levels from school leavers to internships through to graduate programs.

FMI Online Student join-student-img2 FMI Online Student
85,000+ students currently enrolled
Asset management pathway
  • courses-clock50+ hours
  • courses-desktop8 courses

The asset management industry is a global industry worth over 100 trillion US dollars. It plays a crucial role in managing the assets of retail and institutional investors, offering a wide range of exciting careers in doing so. If you’re looking to forge a career in asset management, our Asset management pathway is perfect for you. We help you build the skills all asset managers are looking for and explore everything you need to know about the industry and the wide range of roles available in the sector

FMI Online Student join-student-img2 FMI Online Student
100,000+ students currently enrolled