The Economist: What was Mercantilism?/ Rise of Capitalism Mercantilism dominated European thought between the 16th and 18th centuries. At the heart of mercantilism is the view that countries should increase and maximize their exports (goods sold to other countries) which is the best route to national prosperity. Simplified, mercantilism is “bullionism”: the idea that the only true measure of a country’s wealth and success was the amount of precious metals (gold, silver, etc…) that it had. If one country had more gold than another, it was necessarily better off. This idea had important consequences for economic policy. The best way of ensuring a country’s prosperity was to make few imports (goods bought from other countries) and many exports, thereby generating an inflow of foreign exchange and maximizing the country’s precious metals. Such ideas were attractive to some governments. Accumulating gold was thought to be necessary for a strong, powerful state. Countries such as Britain implemented policies which were designed to protect its traders and maximize income. The Age of Exploration brought wealth to European countries. Colonial powers imported (brought in) inexpensive raw materials and exported (sold) expensive manufactured goods back to their colonies. Private companies like the British or Dutch East India Company grew very wealthy and powerful. Other companies throughout Europe began opening businesses throughout the world to trade goods. These companies competed with one another which led to Capitalism, which is also referred to as the "market economy" because buyers and sellers are free to exchange goods and services and compete.