Changing Economic Theories

Definition

Changing Economic Theories refer to the evolving ideas and frameworks that economists and policymakers have used to understand and manage economies over time. These theories reflect shifts in thinking about how economies function, the role of government, and the impact of markets. In the context of imperialism, these changes played a crucial role in how nations justified their expansionist policies and sought new markets and resources.

5 Must Know Facts For Your Next Test

1. During the age of imperialism, mercantilism was a dominant economic theory, leading countries to establish colonies as sources of raw materials and markets for their goods.
2. The transition to capitalism in the 19th century encouraged industrialized nations to seek new territories for expansion to fuel their growing economies.
3. Economic theories not only shaped domestic policies but also influenced international relations as countries competed for resources and markets through imperial expansion.
4. Social Darwinism emerged as a justification for imperialism, arguing that the domination of 'lesser' cultures was a natural outcome of competition among nations.
5. The changing economic theories helped set the stage for global trade networks that emerged during the imperialist era, connecting distant markets and cultures.

Review Questions

• How did mercantilism influence imperialist policies during its prevalence?
  • Mercantilism greatly influenced imperialist policies by encouraging nations to establish colonies to secure raw materials and create new markets for their goods. The belief that a nation's wealth was measured by its stockpile of gold and silver led countries to prioritize trade routes and territorial expansion. As a result, many European powers sought to dominate regions rich in resources, reinforcing their economic standing and fueling further exploration and conquest.
• Evaluate how the shift from mercantilism to capitalism impacted imperialist actions in the 19th century.
  • The shift from mercantilism to capitalism transformed imperialist actions significantly in the 19th century. Capitalism promoted industrialization, which increased demand for raw materials and new markets. This led countries to seek territories where they could extract resources at lower costs while selling manufactured goods at higher prices. The rise of capitalist economies thus intensified competition among nations, spurring a race for colonies that reflected not just economic ambitions but also national pride and power.
• Analyze the implications of Social Darwinism on imperialist ideologies and practices during the late 19th century.
  • Social Darwinism had profound implications for imperialist ideologies and practices in the late 19th century. It provided a pseudo-scientific justification for the domination of 'weaker' nations by suggesting that it was natural for stronger societies to assert control over them. This belief reinforced notions of racial superiority and justified exploitative practices in colonized regions, as imperial powers claimed they were fulfilling a duty to 'civilize' these populations. Consequently, Social Darwinism influenced both public opinion and government policies related to expansion, shaping a worldview that rationalized aggressive imperialistic pursuits.

Related terms

Mercantilism: An economic theory prevalent in the 16th to 18th centuries that emphasized the importance of accumulating wealth through trade and maintaining a favorable balance of trade for the state.

Capitalism: An economic system characterized by private ownership of production and operation for profit, where investment is determined by private decision rather than state control.

Social Darwinism: A theory that applied concepts of natural selection and survival of the fittest to societies, often used to justify imperialism by suggesting that stronger nations had a right to dominate weaker ones.