Economic Effects of the Enlightenment

French seaport in 1683

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Questions Notes: Mercantilism (Pre-Enlightenment

Thinking)1. 1500-1800 was one of religious and

commercial wars.2. large revenues were needed to maintain

armies and pay the growing costs of civil government.

3. Mercantilism-Economic policy of collecting bullion, establishing colonies, developing industries and maintaining a favorable balance of trade

a) Bullion-quantities of gold and silver4. The state exercised much control over

economic life, chiefly through corporations and trading companies.

5. Treaties were made to obtain exclusive trading privileges, and the commerce of colonies was exploited for the benefit of the mother country.

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Questions Notes: Mercantilism (Pre-Enlightenment

Thinking)1. 1500-1800 was one of religious and

commercial wars.2. large revenues were needed to maintain

armies and pay the growing costs of civil government.

3. Mercantilism-Economic policy of collecting bullion establishing colonies, developing industries and maintaining a favorable balance of trade

a) Bullion-quantities of gold and silver4. The state exercised much control over

economic life, chiefly through corporations and trading companies.

5. Treaties were made to obtain exclusive trading privileges, and the commerce of colonies was exploited for the benefit of the mother country.

6. Mercantilist ideas did not decline until the coming of the Industrial Revolution and of laissez-faire

a) Laissez-faire-economic system functions best when there is no interference by government.

MercantilismMercantilism helped create trade patterns such as the triangular trade in the North Atlantic, in which raw materials were imported to the metropolis and then processed and redistributed to other colonies.

Adam Smith

• Opposed mercantilism as an economic system.

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Questions Notes: Capitalism (Post-Enlightenment

Thinking)

1. Adam Smitha) Wrote the Wealth of Nations (1776)b) advocated free trade-Laissez-faire c) “the invisible hand” self-interest guides the

most efficient use of resources in a nation's economy, with public welfare coming as a by-product.

d) argued that consumption was the only way to grow an economy.

e) A market economy could regulate itself through supply and demand.