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Adam Smith, author of An Inquiry into the Nature and Causes of the Wealth of Nations (1776; commonly known as The Wealth of Nations )—a text largely considered to be the foundation of modern economics—is documented as the first to use the term “mercantile system.” Smith used the term to refer to an economic policy designed to enrich a nation by increasing exports and decreasing imports. The model had become the dominant system and philosophy among internationally expanding Western European powers during the sixteenth and eighteenth centuries. Countries practicing mercantilism sought to create a beneficial balance of trade with two purposes: attracting commodities like gold and silver and increasing domestic employment. Unlike the traditional agriculture-based system, mercantilism disproportionately benefitted merchants and consortiums of merchants such as the British East India Company. Tariffs and quotas on imported goods protected domestic commercial ventures and provided industry and commerce with various economic incentives.

In the mid-seventeenth century, France was industrially and economically fragmented, had been laboring under a long-standing corrupt feudalistic system of state finance that was woefully inefficient, and had experienced twenty-five years of foreign and civil wars. Furthermore, the nation had no coherent plan to improve revenue from international trade. As a result, France had little wealth or power compared with European rivals such as England and Holland. Jean-Baptiste Colbert, who became French controller general in 1665, was determined to improve the fortunes of his country and king through an aggressive program of mercantilist reforms.

By the seventeenth century, Western Europe had developed into a region of competing nation-states, each with a central government, and each practicing mercantilism. According to the principles of mercantilism, the goal of trade is to increase the wealth of a nation. To increase and store wealth, according to mercantilist theory, states were encouraged to export more goods than they import.