Final answer:
Mercantilist policies negatively impacted the working class by keeping wages low, imposing high taxes, leading to inflation, and causing wars. Government regulation, including tariffs and monopolies, restricted economic freedom and promoted exploitation, contrasting with Adam Smith's advocacy for trade liberalization.
Step-by-step explanation:
Mercantilist policies hurt the working class in several ways. They advocated keeping wages low to increase the surplus in the hands of employers and to prevent the purchase of luxury goods that could be exported for profit. The mercantilist system also involved high taxes to enrich government coffers and stringent trade restrictions that could stifle the economic growth of colonies and lead to harsh treatment of those evading trade laws. Additionally, the mercantilist emphasis on the accumulation of gold and silver could lead to inflation, adversely affecting the working-class population. Another negative impact came from the combat waged by working-class soldiers, as mercantilist policies often led to wars over resources and trade dominance.
Mercantilist theorists advocated for heavy government regulation of the economy, which included imposing tariffs, granting monopolies, and subsidizing industries, ultimately restricting free trade and competition. The exploitation of colonies and indigenous populations as well as enslaved Africans for the benefit of the home country's economy is one of the darkest legacies of mercantilism. Counter to mercantilist theory, Adam Smith argued for trade liberalization, suggesting that competition, not government intervention, should regulate the economy, ultimately differing this capitalist perspective from the mercantilist viewpoint.