How does mercantilism compare with capitalism?

Answer 1

Mercantilism and capitalism differ fundamentally in their economic principles and objectives. Mercantilism, prevalent from the 16th to the 18th centuries, emphasizes state control over the economy, with a focus on accumulating wealth through trade surplus and colonial expansion. In contrast, capitalism prioritizes free markets, private property, and individual entrepreneurship, allowing supply and demand to dictate economic activity. While mercantilism seeks to enhance national power through economic intervention, capitalism promotes economic growth through competition and innovation.