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• Origin of Money


  Lesson 3
• Money


  Medium of exchange used for buying and selling
• Mobile Payments


  Money rendered for a product or service through a portable electronic device
• Near Field Communication (NFC) payments


  • Technology that allows two devices to process contactless payments
• Sound wave-based-wireless, transmission technology


  Technology that transmits data via sound waves
• Magnetic secure transmission


  Technology that uses a magnetic signal to transmit data
• Mobile Digital wallet


  Stores payment information on a mobile device
• Quick Response (QR codes)


  Trademark of a type of matrix barcode
• Short Message Service (SMS)


  Paying for products or services via text message
• Mercantilism


  A belief system that aims to enrich the state by increasing the entry of gold and silver through creating the highest possible export/trade surplus
• The "Commercial Revolution" brought a revolutionary change in the economy of Europe: the transition from local economies to national economies, from feudalism to capitalism, and from rudimentary trade to a globally larger international trade
• Mercantilism was born out of the commercial revolution
• Mercantilism


  Believes that the state should actively intervene in the economy and employ protectionism to protect export industries
• Mercantilism is also known as "bullionism"
• Mercantilism aims to encourage production within national territories by

  Granting monopolistic privileges to export producing enterprises, giving government subsidies, providing tax exemptions, importing advanced technology, acquiring manufacturing secrets, encouraging immigration of skilled workers, and developing merchants and naval fleets
• Factors of production in mercantilism

  • Labor
  • Natural resources
  • Capital goods (capital)
  • Entrepreneurship
• Mercantilism remains part of modern life with countries like Japan, China, Singapore, Taiwan, and Germany favoring exports and discouraging imports through neo-mercantilism and protectionist policies
• Free trade advocates highlight the benefits of free trade for all members of the global community, contrasting it with mercantilism's protectionist policies
• Free trade


  International trade free from barriers such as tariffs, quotas, or other restrictions, requiring less government regulatory power
• Proponents of mercantilism: 'Sir William Petty, Sir Thomas Mun, Jean-Baptiste Colbert, Jean Bodin, Richard Cantillon, Lord Antoine de Montchrétien, Antonio Serra, Giovannie Botero'
• Adam Smith refuted the general notion of measuring a nation's wealth by its treasury and advocated for free trade in his book "Wealth of Nations" (1776)
• Laissez-faire economics


  A theory that restricts government intervention in the economy, allowing the free market to drive economic development
• Laissez-faire economics is a theory that restricts government intervention in the economy
• Laissez-faire economics


  • Restricts government intervention in the economy
• Smith demonstrated that the free market would translate into an all-encompassing economic development in a significantly wider sense than mercantilism
• Smith's concept of specialization

  • Leads to the development of economies of scale, creating sustainable growth
• Collusive relationship between government and business class in the mercantile system

  Detrimental to the citizenry
• Characteristics of mercantilism described by Adam Smith


  • Enhancing economic power of states through building wealth, especially precious metals
  • Leading to rapid unification of control of countries under strict economic and political policies
  • Aggressively seeking a favorable balance of trade by selling more than importing
  • Influence of Jean-Baptiste Colbert on the development of mercantilism in France
• Surplus gain or surplus value leads to expanded reproduction, conditional on capital accumulation
• Expanded reproduction


  A model in which a capitalist economy smoothly reproduces itself by reinvesting surplus value created by workers
• Philipp Wilhelm Von Hornick detailed a nine-point program of effective national economy in Austria Over All, If She Only Will of 1684, summing up the tenets of mercantilism comprehensively
• Sir Thomas Mun was closely associated with the idea of mercantilism in England, emphasizing the importance of commerce and free trade
• Antoine de Montchrétien emphasized the development of agriculture as the basis of all wealth and self-sufficiency in his book "A Tract on Political Economy"
• Richard Cantillon emphasized improving raw materials and exporting finished products to maintain a favorable balance of trade
• Physiocrats believed agriculture was the source of all wealth and advocated for highly priced agricultural products and free trade
• The price-specie-flow mechanism was attributed to David Hume to illustrate how trade imbalances can self-correct under the gold standard
• Giovanni Botero and Antonio Serra developed theories using the city as a unit of analysis and found development to be the result of industrialization