Mercantilism Vs Capitalism

During the age of exploration, the economy of Europe was changed by: mercantilism, the market economy, and most importantly, Capitalism. These three concepts were, and still are, important parts of the economy. Mercantilism is an economic policy by which nations try to gather wealth by establishing colonies and controlling trade. The “age of exploration” was based upon this principle. When Europeans discovered the Americas, they set up colonies in these new worlds. The colonies would mine raw materials, and ship them back over to Europe to sell. Back in Europe, new trade routes with India and Asia, brought back cheaper spices. This economic policy is important to the economy of Europe during the age of exploration because it was the reason for the age of exploration. Mercantilism was the cause of the American colonies that we, today, stem from. Mercantilism was the reason Italy doesn’t still control trade with Asia.
A market economy is an economy in which prices are determined by the buying and selling decisions of individuals in the marketplace. A supply-and-demand sort of environment. If someone were to be the only person to sell a …show more content…
Before Capitalism, money wasn’t invested. Land was what mattered. If you had a lot of land, you could get a lot of money from renting it out to farmers. If you had no land, you were poor, and probably farmed and paid money to the people who owned the land you were renting. This economic policy is important to the economy of Europe during the age of exploration because it was the helping hand in funding of all the great explorations. Merchants rich on their trade gained even more profit by funding different companies and voyages, expecting money when their funded parties had some. A huge example of Capitalism is when Columbus was given money by King Ferdinand and Queen Isabella to go on his voyage knowing that he would have to pay them back with