aka Mercantilism

Mercantilist tenets:

  • Nations are in a direct zero-sum competition with each other for wealth

  • Gold and silver bullion are synonymous with wealth

e.g. support for Protectionism to protect Trade Balance (Trade Deficit)

Adam Smith's Invisible Hand and liberal theory of economics gradually put an end to the dominance of mercantilism. Liberalism and mercantilism differed on one key issue. Mercantilism states that all the world's people must compete for the world's limited wealth. Adam Smith believed that wealth and trade was a Non-ZeroSum game, which essentially means two parties involved in a transaction could each actually gain, because the exchanged items were more valuable to their new owners.

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