How did mercantilism work?

Answer 1

Mercantilism of course was executed differently in different countries so the term isn't absolutely definitive.

The basic idea behind the economic doctrine (mainly set from the 16th to late-18th centuries) was that the amount of wealth in the world is a constant and therefore countries, in order to succeed financially, had to garner all the riches they could into their own hands in any means possible. This was done through strongly encouraging exports and strongly discouraging imports in government policies. Policies included for instance: high tariffs, networks of overseas colonies, and export subsidies.