mercantilism and domestic economic policy(1)

The regulation of economic activity also was pursued within the country trough the control of industry and lobar.Comprehensive systems of regulations were put into effect utilizing exclusive product charters such as those granted to the royal manufacturers in France and England ,tax exemption ,subsidies,and the granting of special privileges .In addition to the close regulation of production ,labor was subject to various controls through craft guilds.Mercantilists argued that these regulations contributed to the quality of both skilled labor and the manufactures such labor helped produce -quality that enhanced the ability to export and increased the wealth of the country.
finally,the mercantilists pursued policies that kept wages low.Because labor was the critical factor of production,low wages meant that production costs would be low and a country is products would be more competitive in world markets.It was widely held that the lower classes must be kept poor in order to be industrious and that increased wages would lead to reduced productivity.Not that ,in this period,wages were not market determined but were set institutionally to provide workers with incomes consistent with their traditional position in the social order .however,because labor was viewed as vital to the state ,a growing population was crucial to growth in production . thus,governments stimulated population growth by encouraging large families,giving subsidies for children ,and providing financial incentives for marriage .