Mercantilism is not a doctrine that any single thinker founded; it is the distillation of two centuries of actual European state practice. Even the name 'mercantilism' is one applied later by those who wanted to dismantle it — the physiocrats and Adam Smith. The core assumption, though, is clear enough: a nation's wealth is the gold and silver held in its treasury; international trade divides a fixed pie, so one state's gain must be another's loss.

The conditions for this logic came together in the early 16th century. The voyages of 1492 and 1498 opened the Atlantic and Indian Ocean colonial economies; the silver mountain of Potosí, discovered in 1545, fed Europe's money supply for a century and a half — roughly 150,000 tonnes of silver moved from the Americas to Europe between 1500 and 1800. At the same time the nation-state was hardening: standing armies, permanent diplomacy, and growing navies all demanded steady cash. A shortage of coin meant political weakness; so the task of the state was to draw bullion in and stop it leaving.

In practice the toolkit was standardised. High import tariffs and bans; export subsidies; navigation laws (England, 1651) requiring colonial goods to travel only in home-country ships; and chartered monopoly companies — the Dutch VOC (1602), the English East India Company (1600) — that functioned as state-licensed company-states. Colonies were the closing link: economies designed to supply raw materials to the metropole, buy its manufactures, and produce no manufactures of their own. The system reached its purest form between the 1660s and 1680s in France, under Louis XIV's finance minister Jean-Baptiste Colbert, who founded textile manufactories, imposed quality standards, lowered internal customs, and raised external ones.

Mercantilism cracked on two fronts in the late 18th century. The first was practical: the colonial system, particularly in British North America, drove the political cost of administering the colonised beyond what could be borne — the American Revolution (1775–83) is the result. The second was theoretical: the physiocrats around François Quesnay, and in 1776 Adam Smith's *Wealth of Nations*, showed that wealth lives not in stocks of gold but in flows of production and exchange, that trade can be mutually enriching, and that state intervention often produces waste. The 19th-century free-trade age was built on this critique. The mercantilist reflex, however — protect national industry, treat the trade deficit as a danger, repatriate strategic production — still runs in the veins of the modern state.