Question

A1. Why did feudalism evolve into mercantilism? A2. Why did mercantilism evolve into capitalism?

Answer 1

1. Feudalism was a medieval form of government where the lord or ruler offers people a piece of land in exchange for their service. The individuals are treated as feudal tenants and the man who offers the land is his lord. Feudalism don't support unified government. The lords are the owner of the land and the peasants are treated as slaves. Peasants have no right to go against their lords. Second, feudalism also discouraged economic trade and growth. The land was cultivated by peasants and a major portion of their produce was taken by their lords in the form of taxes and fees. Even poor peasants do not have rights to change their occupation without the permission of their lords. They suffer a lot, sometimes face shortage of finance to support their family.

On the other hand, mercantilism is a form of trading system where there is impositions of government regulations or there is uniform government. In this trading system, people realized that economic growth can be achieved by maximizing exports and minimizing imports. The older feudal economic system in Western Europe is replaced by the mercantilism. Countries try to grow its wealth by implementing various policies and acts. In case of mercantilism a country's government interferes in the economic system to create a favorable trade balance. People are more independent in this economic system than feudalism.
So due to the above reasons feudalism evolved into mercantilism.

2. Mercantilism evolved into capitalism because capitalism is an economic system that focuses on creation of wealth by enhancing the skills of workers, whereas mercantilism focuses on accumulation of wealth by extracting wealth out of the country's possession. Capitalists give importance to individual members of society as the main character in wealth creation. According to capitalists, a nation's wealth can multiply through the productive efforts of each member of the society. Whereas in Mercantilism form of economy wealth is fixed and the skills of people should be used to the maximum level to extract wealth from them. Mercantilism form of economic system believes that trade can be improved by maximizing exports and minimizing imports, whereas capitalist form of economic system focuses on balanced trade system where demand and supply determines the price of a product. So people feel that capitalism form of economy is far better than mercantilism, so they try to adopt capitalism.