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Economic System: Jean Baptiste Colbert And Louis XIV Of France

501 Words3 Pages

The economy of the nation is what drives its success, or its failure. When thinking of a mode of economic system, several ideas come to mind. The role of the government in this system is also put to the forefront, and two key economic minds, Jean Baptiste Colbert and Adam Smith, had varying opinions on how the economy of their nations was to prosper and how the system should be constructed. Their respective models, mercantilism and capitalism, have both promoted wealth and influence even to current times, but have differences that allow each its own unique distinction.

Jean Baptiste Colbert was the financial advisor for Louis XIV of France and championed the economic system of mercantilism, popular during the 17th and 18th centuries. Mercantilism revolves around creating a favorable balance of trade, exporting more than importing. Overseas colonies are created to allow access to raw materials, and gold and silver are desired for a sufficient war chest. This protectionist system strived for considerable economic power and influence over other nations, and allowed France to prosper as a great nation during the time period. This system can also be compared to communism, however a more severe version. Government control is heightened and income is equal among citizens, but goods and raw materials are handled by the state. This …show more content…

Diverging from mercantilism in that government interference is pushed aside, capitalism promoted the greed of the individual and argued that competition would drive the economy acting as an "Invisible Hand". Government regulation was limited, tariffs lowered, and taxes lightened. Capitalism wanted the individual and the supply and demand patterns to drive the economy forward, and Adam Smith's ideas have become the framework for much of the success the United States and other "lassiez-faire", hands-off, economies use

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