Mercantilism or capitalism?Version en ligne Mercantilism or capitalism? par Shaner Adams 1 Mercantilism 2 Capitalism Mother country controls trade Colonies must trade with mother country Colonies cannot manufacture goods Colonies are a source of raw materials Colonies provide gold and silver Balance of trade favors the mother country Supply and demand determine price (free market economy) Means of production are privately owned by individuals System that profits individual entrepreneurs laissez-faire Adam Smith argued for this Government stays out of the economy