Mercantilists Versus Physiocrats

Question 1

Source of wealth of nations

Answer 1

Mercantalists: the gold and silver the nation possesses
Physiocrats: Agricultural output

Question 2

International trade

Answer 2

Mercantalists: Emphasis on exports, imports only raw materials
Physiocrats: Free Trade

Question 3

Role of government

Answer 3

Mercantalists: Strong government with lots of regulations, monopoly rights, tariffs and taxes
Physiocrats: “Laissez-Faire” - the government should stay away, tax only land

Question 4

Main impact on subsequent economic thought

Answer 4

Mercantalists: The idea that the economy could be formally studied
Physiocrats: the idea that the economy could be formally studied, and that sectors and markets are interrelated