<P> European merchants, backed by state controls, subsidies and monopolies, made most of their profits by buying and selling goods . In the words of Francis Bacon, the purpose of mercantilism was "the opening and well - balancing of trade; the cherishing of manufacturers; the banishing of idleness; the repressing of waste and excess by sumptuary laws; the improvement and husbanding of the soil; the regulation of prices (...)". </P> <P> The British East India Company and the Dutch East India Company inaugurated an expansive era of commerce and trade . These companies were characterized by their colonial and expansionary powers given to them by nation - states . During this era, merchants, who had traded under the previous stage of mercantilism, invested capital in the East India Companies and other colonies, seeking a return on investment . </P> <P> In the mid-18th century, a new group of economic theorists, led by David Hume and Adam Smith, challenged fundamental mercantilist doctrines such as the belief that the world's wealth remained constant and that a state could only increase its wealth at the expense of another state . </P> <P> During the Industrial Revolution, industrialists replaced merchants as a dominant factor in the capitalist system and affected the decline of the traditional handicraft skills of artisans, guilds and journeymen . Also during this period, the surplus generated by the rise of commercial agriculture encouraged increased mechanization of agriculture . Industrial capitalism marked the development of the factory system of manufacturing, characterized by a complex division of labor between and within work process and the routine of work tasks; and finally established the global domination of the capitalist mode of production . </P>

What is another term for a pure capitalist system