Why did mercantilism evolve into capitalism?

What is mercantilism?

In order for the absolutist rulers to be able to pay their high expenses for their splendid life, the court and the expensive army, the income of the state had to rise and rise again.

What is mercantilism?

In France, the finance minister developed the name Jean Baptiste Colbert (1618-1683) a system in which the state intervened in economic processes or planned them precisely. That was called mercantilism. Sometimes one speaks of Colbertism. However, this form of economy had existed for a long time, so Colbert did not "invent" it, only implemented it consistently. Even before Colbert, the economy was increasingly controlled by the state so that more income should flow into the state budget.


France should earn as much money as possible with high-quality goods made in the country. The goods were produced in factories in which each craftsman worked on a pro rata basis. That was a bit of the forerunner of assembly line work, except that everything is still done by hand - both in Latin "manus" the hand - was made. Goods were not allowed to be imported from outside, they were subject to customs duties. So people bought the cheaper goods made in the country and the money stayed in the country. Cheap raw materials came from the French colonies. So you bought cheap and sold dear.

Even if mercantilism had its origin in absolutist France, it was also implemented in Prussia and Austria. Here, too, financial policy, like economic policy, was influenced by mercantilism. The name for this form of economy was "Kameralistik". The main goal was agriculture.