Mercantilism, a trend of bourgeois political economy and the economic policy of states during the age of the primary accumulation of capital (15th-18th centuries), which reflected the interests of the merchant’s capital when it was still linked with industrial capital. Mercantilists belived that profit is created in the realm of circulation, while money is the wealth of the nation. Therefore, the policy of mercantilism was aimed at attracting to the country as much gold and silver as possible. The first mercantilists (Stafford and others) insisted that all expatriation of currency from a country be banned. Their aim was to accumulate currency within the country by exporting goods to a foreign market. As capitalist forms of the economy developed and foreign trade expanded, the policy which blocked currency from circulation became increasingly inexpedient. The policy of a favourable money balance was replaced by the trade balance policy. It was advocated by late mercantilists (T. Mun, A. Serra and others). They felt that the state must have an export balance of trade, that is, that the country should not import more goods than it exports. Hence, the manufacture of export goods was encouraged. Mercantilism regarded foreign trade as a source of wealth and, since export goods were manufactured by artisans, the mercantilists concluded that the handicraft industry had to be developed. Capitalist production was in its birth, and the mercantilists’ outlooks were conditioned by the level of economic development of the time. Mercantilism began to decline in the mid- 222 17th century because, as capitalism developed, capitalist production became the main way of increasing wealth. Marx called mercantilism the pre-history of political economy. "The real science of modern economy only begins when the theoretical analysis passes from the process of circulation to the process of production" (K. Marx, Capital, Vol. Ill, p. 337). Mercantilism was progressive for its time, since it facilitated the development of the first big capitalist enterprises—manufactories— and encouraged the development of the productive forces and the victory of capitalism over feudalism. But as capitalism developed, the main propositions of mercantilism became outmoded and the bourgeoisie advanced new economic theories based on the requirements of free trade and free enterprise. Physiocratism replaced mercantilism as a trend of bourgeois economic thought (see Physiocrats).