History of South America

What is a system where trade controlled by bigger country?

Mercantilism is a system in which a country's government actively manages its economy to increase its power and wealth. This is done by encouraging exports and discouraging imports, so that the country can build up a trade surplus and accumulate gold and silver. Mercantilist policies often include tariffs, subsidies, and quotas.

Mercantilism was popular in Europe from the 16th to the 18th centuries. It was based on the idea that a country's wealth was determined by its stock of gold and silver. Countries that had more gold and silver were richer, more powerful, and more independent.

Mercantilism was also linked to imperialism. Countries that were eager to gain more gold and silver often sought to acquire colonies. Colonies could provide sources of raw materials that could be used to produce goods for export. They could also provide markets for finished goods.

Mercantilism eventually fell out of favor because it was too restrictive. It discouraged free trade and led to wars between countries that were competing for control of resources. It is now remembered as a historical concept that was important in the development of global economic policies.