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a motive for colonial expansion. Mercantilist theory varied in sophistication from one writer to another and evolved over time. Favors

for powerful corrupting interests were often defended with ill-considered mercantilist reasoning. Today it is widely rejected in the

West but lives on in the neomercantilism practiced in many Asian countries.

High tariffs, especially on manufactured goods, are an almost universal feature of mercantilist policy. Other policies have included

monopolizing markets with staple ports

exclusive trade with colonies

forbidding certain trade to be carried in foreign ships

export subsidies

banning the export of gold and silver , even for payments

promoting manufacturing with research or direct subsidies

limiting wages (see Physiocracy for the contrary view)

maximizing the use of domestic resources and

restricting domestic consumption with non-tariff barriers to trade .

Jean-Baptiste Colbert 's initially successful but ultimately self-defeating work in seventeenth century France perhaps best

exemplified classical mercantilism. In the English-speaking world its ideas were dealt intellectual blows by Adam Smith with the

publication of The Wealth of Nations in 1776 and later David Ricardo with his explanation of comparative advantage , but policy

changes did not follow in either's lifetime, even in Britain. Mercantilism reached its low-water mark in the last half of the nineteenth

century as the British Empire embraced free-trade and used its power as the financial center of the world to promote the same.

However, in the United States and Bismarck's Germany , Alexander Hamilton and Friedrich List , respectively, successfully

advocated protectionism . Their works provided a bridge to later neomercantilism, distinguished from traditional mercantilism

primarily by its adoption of neoclassical ideas and methods. Today neomercantilism is practiced in several highly successful Asian

economies and their rapidly growing emulators , but also in troubled Japan .

Mercantilism in its simplest form was naive bullionism , with which it is sometimes mistakenly identified. Mercantilist writers typically

emphasized the circulation of money and rejected hoarding. Their frequent obsession with monetary metals accords with currently

respectable ideas regarding the money supply, such as the stimulative effect of a growing money supply . Specie concerns have

since been rendered moot by fiat money and floating exchange rates . In time, the heavy emphasis on money was supplanted

by industrial policy , accompanied by a shift in focus from the capacity to carry on wars to promoting general prosperity. Mature

neomercantilist theory recommends selective high tariffs for "infant" industries or to promote the mutual growth of countries

through national industrial specialization . Currently, advocacy of mercantilist methods for maintaining high wages in advanced

economies are popular among workers in those economies, but such ideas are rejected by policy makers and most economists.

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