Back in 1500’s and 1750’s, the way of making a resilient economy was through the aggressive accumulation of precious metals like gold, an only medium of trade between the countries. The trade was seen as a zero-sum game or a win-lose game and each government during mercantilism was with bullions philosophy, as these were the only medium for them to maintain the surplus in trade.
For the purpose, government used to regulate the economy through strict control of the labor market and industries, where they grant the monopoly to the firms of their choices which can help in accumulation of precious metal, as the reduced cost of production help them to increase the export and ultimately inflow of specie into the economy.
So, firstly, in that time, the country with significant amount of precious metals were considered to be economically sound as there was no other medium to measure the economic image of the nation. Secondly, the holding exemplifies the countries voraciousness to expand, more accumulation, higher chances of social, economic and infrastructure development. Moreover, the accumulation signifies the surplus and superiority in trade and these precious metals cocooned in the nations vault were also the way to proliferate national border of the country.
Moreover, the precious metals like gold are the one, who hardly loses their values. And this principle still holds true in the 21st century as we can see each countries trying to back their currency with this metal in a vide to make their economy strong. Further, these precious metals act as a cushion to absorb the economic shock during depressive economics conditions.
To conclude, due to the unavailability of other stable mediums of transaction for trade and to maintain trade surplus which ultimately leads to strong economy, each nation focused on holding more such precious metals.
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