Merits of Mercantilism:

Mercantilism had many merits. At first, the chief goal of Mercantilism was the prosperity of a country.

The thought to make a country prosperous by commerce was simply marvellous.

Secondly, it brought industrial growth. There was need of surplus for export. The growth of industry led to more production which could meet the demand of the people and create surplus which was exported.


Thirdly, this Mercantilism helped the countries to increase foreign relation. When trade increased with foreign countries, commercial and cultural relation also developed.

Fourthly, Mercantilism also helped in the increase of colony. To export surplus, a country needed market. So, the European countries tried to conquer new countries to establish their colony in those places and wanted to gather more and more wealth.

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Fifthly, Mercantilism made a country powerful. The merchants became favourite friends of the ruler because they brought more wealth to the country. This wealth helped the king to maintain a large army which was its strength.


Finally, Mercantilism paved the way for new invention. When trade and commerce flourished, more demand was for new goods. It prompted people to invent new things to increase the potentiality of machines which could produce more. The new inventions brought revolutionary change in case of production.

Demerits of Mercantilism:

The demerits of Mercantilism were many.

At first, to put much emphasis on money was very bad. The merchants put much emphasis on gold and silver which were never true wealth of a country. The natural resources and factories were the true wealth of a country. The European Mercantilism ran after gold and silver and could not serve people properly.


Secondly, this Mercantilism brought conflict among the European countries. Each country wanted to be more powerful in comparison to other. This tilted the ‘Balance of Power’ in Europe.

Thirdly, Mercantilism gave birth to Colonialism. The European countries needed markets for sailing of their surplus. England, France, Germany, Italy, Spain, Portugal etc. were in this race. This created enmity among different countries.

Fourthly, Mercantilism was one way traffic. It put emphasis on export but not import, it is not easy to be self-sufficient. Many countries of Europe became failure by trying to be self-sufficient which increased their miseries.

Fifthly, there was no necessity on the part of state to interfere in trade and commerce. In fact, it interfered in human rights. So, Adam Smith and Physiocrats emphasised on Free Trade.

Sixthly, Mercantilism propounded a wrong maxim-“Colonies only exist for mother countries”. However, it was proved wrong in later times. The colonies raised their voice against mother countries. The American War of Independence was its bright example.

Seventhly, Mercantilism only put emphasis on trade and commerce. It neglected other aspects of life like education, agriculture etc. So, Mercantilism was criticised later on.

Finally, Mercantilism followed a strong principle that a country can rise at the interest of the other. This was not justified. It was only because this strained the relation between the two countries. Hatred for a country against the other came due to Mercantilism.

In every sense of the term, Mercantilism created a new chapter in the annals of European history. It played a vital role in making the European countries progressive. On the other hand, it sowed the seeds of many rise and fall. This gave birth to colonialism which made the entire Europe a Military Camp.