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Capitalism vs. Mercantilism: What's the Difference?

Edited by Huma Saeed || By Sumera Saeed || Published on December 7, 2023
Capitalism is an economic system based on private ownership and free markets, whereas mercantilism focuses on trade, export dominance, and government intervention.

Key Differences

Capitalism relies on private ownership and individual initiative for economic growth. Mercantilism, conversely, emphasizes a nation's wealth accumulation through trade, exports, and government control over economic activities.
Sumera Saeed
Dec 07, 2023
In capitalism, market forces determine prices and production based on supply and demand. While, in mercantilism, the state plays a significant role in controlling economic activities to maximize exports and minimize imports.
Sumera Saeed
Dec 07, 2023
Capitalism encourages competition and innovation, leading to diverse products and services. However, mercantilism focuses on building national power and wealth, often at the expense of other nations, through trade surpluses.
Huma Saeed
Dec 07, 2023
Under capitalism, success is measured by profitability and market share. Whereas, mercantilism measures success by the accumulation of precious metals and a favorable balance of trade.
Aimie Carlson
Dec 07, 2023
Capitalism fosters economic freedom and consumer choice. Mercantilism involves government policies that restrict trade to benefit the home country, often leading to monopolies.
Aimie Carlson
Dec 07, 2023
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Comparison Chart

Basis of System

Private ownership and free markets.
Trade dominance and government intervention.
Sumera Saeed
Dec 07, 2023

Market Forces

Prices determined by supply and demand.
Government controls on trade and production.
Sumera Saeed
Dec 07, 2023

Role of Competition

Encourages competition and innovation.
Focuses on national wealth, often reducing competition.
Sumera Saeed
Dec 07, 2023

Measure of Success

Profitability and market share.
Accumulation of precious metals and trade surpluses.
Harlon Moss
Dec 07, 2023

Consumer Impact

Offers consumer choice and diverse products.
Limited consumer choice due to trade restrictions.
Sumera Saeed
Dec 07, 2023
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Capitalism and Mercantilism Definitions

Capitalism

An economic system based on private property and free enterprise.
The rise of tech startups is a hallmark of capitalism.
Harlon Moss
Nov 24, 2023

Mercantilism

A system favoring export over import to accumulate wealth.
Under mercantilism, countries imposed high tariffs to protect domestic industries.
Aimie Carlson
Nov 24, 2023

Capitalism

A system where businesses operate for profit in a competitive market.
Capitalism drives companies to innovate for market success.
Janet White
Nov 24, 2023

Mercantilism

An economic strategy focused on strengthening national power.
Mercantilism often involved colonial expansion to secure resources and markets.
Harlon Moss
Nov 24, 2023

Capitalism

A market-driven economy with minimal government intervention.
Capitalism thrives on the principles of supply and demand.
Huma Saeed
Nov 24, 2023

Mercantilism

An economic theory emphasizing national wealth through trade control.
Mercantilism was prominent in European economies during the 16th to 18th centuries.
Huma Saeed
Nov 24, 2023

Capitalism

An economic model emphasizing individual wealth accumulation.
In capitalism, personal financial success is highly valued.
Sumera Saeed
Nov 24, 2023

Mercantilism

An economic practice where the state regulates trade for national benefit.
Mercantilism led to the establishment of several colonial trade monopolies.
Aimie Carlson
Nov 24, 2023

Capitalism

A system promoting private investment and consumer choice.
The variety of products available is a result of capitalism.
Sumera Saeed
Nov 24, 2023

Mercantilism

A policy aimed at accumulating precious metals by achieving trade surpluses.
Mercantilism's success was measured by the stockpile of gold and silver.
Aimie Carlson
Nov 24, 2023

Capitalism

An economic system in which the means of production and distribution are privately or corporately owned and development occurs through the accumulation and reinvestment of profits gained in a free market.
Sumera Saeed
Nov 23, 2023

Mercantilism

The theory and system of political economy prevailing in Europe after the decline of feudalism, based on national policies of accumulating bullion, establishing colonies and a merchant marine, and developing industry and mining to attain a favorable balance of trade.
Sumera Saeed
Nov 23, 2023

Capitalism

(politics) A socio-economic system based on private ownership of resources or capital.
Sumera Saeed
Nov 23, 2023

Mercantilism

The practice, methods, or spirit of merchants; commercialism.
Sumera Saeed
Nov 23, 2023

Capitalism

(economics) An economic system based on private ownership of the means of production and their operation for profit.
Sumera Saeed
Nov 23, 2023

Mercantilism

The theory that a nation must always have a positive balance of trade, in the manner that a merchant would operate a shop. Typically this model presupposes protectionism.
Sumera Saeed
Nov 23, 2023

Capitalism

A socio-economic system based on private property rights, including the private ownership of resources or capital, with economic decisions made largely through the operation of a market unregulated by the state.
Sumera Saeed
Nov 23, 2023

Mercantilism

(economics) The theory that holds that the prosperity of a nation depends upon its supply of capital, and that the global volume of trade is unchangeable.
Sumera Saeed
Nov 23, 2023

Capitalism

An economic system based on the abstraction of resources into the form of privately owned capital, with economic decisions made largely through the operation of a market unregulated by the state.
Sumera Saeed
Nov 23, 2023

Mercantilism

An economic system (Europe in 18th C) to increase a nation's wealth by government regulation of all of the nation's commercial interests
Sumera Saeed
Nov 23, 2023

Capitalism

An economic system based on predominantly private (individual or corporate) investment in and ownership of the means of production, distribution, and exchange of goods and wealth; contrasted with socialism or especially communism, in which the state has the predominant role in the economy.
Sumera Saeed
Nov 23, 2023

Mercantilism

Transactions (sales and purchases) having the objective of supplying commodities (goods and services)
Sumera Saeed
Nov 23, 2023

Capitalism

An economic system based on private ownership of capital
Sumera Saeed
Nov 23, 2023

FAQs

Did mercantilism support free trade?

No, it involved heavy government control over trade.
Harlon Moss
Dec 07, 2023

Can capitalism exist with government regulation?

Yes, but typically with minimal government intervention in markets.
Sumera Saeed
Dec 07, 2023

Does capitalism encourage monopolies?

Ideally, it promotes competition, though monopolies can form.
Sumera Saeed
Dec 07, 2023

Can a capitalist economy have social welfare programs?

Yes, but the extent varies depending on government policies.
Harlon Moss
Dec 07, 2023

How did mercantilism affect global trade?

It led to competitive trade practices and the accumulation of wealth through exports.
Huma Saeed
Dec 07, 2023

What is the main goal of capitalism?

To generate profit through private ownership and free markets.
Sumera Saeed
Dec 07, 2023

What was a key element of mercantilism?

The accumulation of precious metals like gold and silver.
Harlon Moss
Dec 07, 2023

Did mercantilism favor domestic or foreign industries?

It favored domestic industries through protectionist policies.
Sumera Saeed
Dec 07, 2023

Is consumer choice a feature of capitalism?

Yes, capitalism promotes consumer choice through market competition.
Janet White
Dec 07, 2023

Is innovation a characteristic of capitalism?

Yes, competition in capitalism encourages innovation.
Harlon Moss
Dec 07, 2023

Was mercantilism beneficial for all classes in a society?

It often benefited the merchant class and rulers more than others.
Janet White
Dec 07, 2023

Was mercantilism focused on local or global markets?

It focused on expanding global markets under state control.
Sumera Saeed
Dec 07, 2023

How does capitalism address economic crises?

It depends on market mechanisms and sometimes government intervention.
Sumera Saeed
Dec 07, 2023

Did mercantilism promote global economic integration?

It often led to economic competition and conflicts between nations.
Aimie Carlson
Dec 07, 2023

Are small businesses part of capitalist economies?

Yes, they are a vital part of capitalism.
Janet White
Dec 07, 2023

How did mercantilism impact colonies?

It often exploited colonies for resources and markets.
Sumera Saeed
Dec 07, 2023

Were mercantilist policies sustainable?

No, they often led to trade imbalances and conflicts.
Sumera Saeed
Dec 07, 2023

Did mercantilism contribute to the rise of capitalism?

Yes, the decline of mercantilism paved the way for capitalist economies.
Janet White
Dec 07, 2023

How does capitalism impact income distribution?

It can lead to income disparities based on market success.
Janet White
Dec 07, 2023

How does capitalism affect prices?

Prices in capitalism are typically determined by market demand and supply.
Harlon Moss
Dec 07, 2023
About Author
Written by
Sumera Saeed
Sumera is an experienced content writer and editor with a niche in comparative analysis. At Diffeence Wiki, she crafts clear and unbiased comparisons to guide readers in making informed decisions. With a dedication to thorough research and quality, Sumera's work stands out in the digital realm. Off the clock, she enjoys reading and exploring diverse cultures.
Edited by
Huma Saeed
Huma is a renowned researcher acclaimed for her innovative work in Difference Wiki. Her dedication has led to key breakthroughs, establishing her prominence in academia. Her contributions continually inspire and guide her field.

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