Mercantilism
During Louis XIV's reign, he once said, "L'etat, c'est moi" ("I am the state"), to describe his position in French society. To encroach his sovereignty, Louis built the palace of Versailles and centralized French economy with a new system known as mercantilism. The central goal of mercantilism was to build up a nation's supply of bullion. This was obtained by a favorable balance of trade, which meant more exports than imports. Jean-Baptiste Colbert, the minister of finance under Louis XIV, encouraged organized factories to produce porcelains and other luxury items through subsidies. It is important to note that mercantilism depended on various foreign countries to buy the mother country's exports. On the other hand, imports were discouraged through the use of high tariffs on imported manufactured goods. Tariffs were low on raw materials since many European nations had scarce amounts of raw materials. Raw materials were key ingredients of a flourishing economy. To obtain raw materials, Europeans turned to imperialism. In mercantilism, a colony's only purpose was to enrich its mother country usually with precious metals and raw materials. Sea and naval power was necessary to be able to control colonies and foreign markets. In addition, a fleet in being could add to a nation's prestige and military power. During the mercantilist period, military conflict between nation-states was both more frequent and more extensive than at any time in history. The armies and navies of the main protagonists were no longer temporary forces raised to address a specific threat or objective, but were full-time professional forces. State action was needed to regulate and enforce mercantilist policies.
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