British Mercantilist Theories of Profit.

This article presents information regarding the British mercantilist theories of profit. Mercantilist theories of profit were based on the premise that if the nation grew richer, the merchant class would automatically grow richer in the process. This was so because a nation could increase its wealth only through active, favorable foreign trade, and they were the people who did the trading. Mercantilists were, therefore, constantly spreading the gospel of a "favorable balance of trade." Practically all the mercantilists accepted the validity of this idea, for they believed profits could be realized by most firms only when exports exceeded imports. Consequently, their real problem was to determine how this favorable balance could be promoted, and this was their point of divergence. It is thus beyond doubt that mercantilists possessed a fundamentally right idea of production. But that being so, it is also evident that the numerous passages where home trade was expressly stigmatized as sterile and foreign trade alone thought productive, must not be taken at their face value.