1. MERCANTILISM A collection of policies designed to keep the STATE prosperous by ECONOMIC REGULATION (increased power and size of gov’t. bureaucracies, new forms of taxation) Wielded heavy influence on western Europe between 1600-1800 A key-component of the consolidation of power found in the ABSOLUTIST/SOVEREIGN STATES of the times (increase in state sovereignty)

2. KEY COMPONENTS OF MERCANTILISM 1.Economic health of a nation can be measured by the amount of precious metal, gold, or silver which it possessed/Hard money is the source of prosperity, prestige and strength 2.A STATE must have a favorable balance-of-trade, meaning they must EXPORT more than they IMPORT 3.Each nation should be economically self- sufficient 4.Regulation of commerce can produce a favorable balance-of-trade

3. KEY COMPONENTS OF MERCANTILISM (cont’d) 5.Sea power necessary to control foreign markets 6.Colonies provide markets for manufactured goods AND sources of raw material 7.Large population needed for domestic labor force 8.State action (ABSOLUTISM) needed to regulate and enforce these policies