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Mercantile System

Mercantile System, in political economy the system aimed at by Colbert in France, and numerous followers in various countries, of establishing an excess in the value of exports over that of imports, the difference, called "the balance of trade" (q.v.), being adjusted by the annual importation of specie, the amount of which measures the advantages of trade. This theory, unless received with important modifications, involves the fallacy that gold and silver alone are wealth. Its grounds, however, were chiefly political, a large reserve of specie being thought necessary in case of war - a view exploded by Adam Smith.