In the long run, as Adam Smith noted, this would prove unfavorable.
By its nature, mercantilism also was extremely repressive of its citizens. For the natives of colonies, which were merely sources of gold to tapped, life was one of constant exploitation. However, such exploitation was mild compared to the conditions that the home citizens of mercantile nations had to face. Most worked long hours in cramped spaces and were poor - and in mercantilism, money was often the sole judge of a man. This may have been all well if the wealth of a man was in direct correlation to achievement. But mercantilism was unrepresentative as a meritocracy aswell, and the wealthy were usually only that way through any means of political pull, or any number of other ignoble means.
However, all social conditions aside, mercantilism was by no means the ideal system to obtain the greatest amount of wealth, either. In the words of Llewellyn H. Rockwell, Jr., "The great economic error of mercantilism is the belief that foreign buyers are great but foreign sellers are not."" It was only Adam Smith who demonstrated that even trade will "create wealth within and throughout nations- .
Adam Smith's Alternative: Capitalism.
Sir Adam Smith, 1725-90, attacked the tarrifs put on goods to artificially raise their prices. He saw that mercantilism was not only repressive of the individual, but that it was not the way that nations became wealthy. He wrote of a system which came to be known as capitalism in his work "An Inquiry into the Causes of the Wealth of Nations-.
Major Themes in Weath of Nations.
The central idea of the system that Smith described was to create a society wherein the individual, pursuing his own interest, indirectly contributes to the welfare of the group. Therefore, he wished to limit the power of government run entiprises and create a system based on private entiprises. As he writes:.
"Public services are never better performed than when their reward comes only in consequence of their being performed, and is proportioned to the diligence employed in performing them.
