What economic system is focused on trade surpluses and government regulation?

The economic system that is focused on trade surpluses and government regulation is mercantilism. This system, which gained prominence from the 16th to the 18th centuries, emphasizes the belief that national strength can be maximized by limiting imports via tariffs and maximizing exports. Governments actively intervened in the economy to accumulate wealth and maintain a favorable balance of trade, ultimately aiming to enhance national power.

Mercantilism views valuable resources, especially precious metals, as critical to a nation’s success, encouraging policies that regulate commerce and support domestic industries. This contrasts with capitalism, which promotes free markets with minimal government intervention, socialism that advocates for collective or governmental ownership of resources, and feudalism, which is characterized by a structure of societal hierarchy and land ownership rather than focused economic policy. Understanding these distinctions clarifies why mercantilism is the correct choice.