Final answer:
The claim that mercantilism has been entirely replaced by free trade is false. Modern economic practices often include elements of economic nationalism, indicative of mercantilist influence. While trade liberalization has become more prevalent, protectionist policies that echo mercantilist ideals are still in use.
Step-by-step explanation:
The statement "mercantilism (economic nationalism) as an economic philosophy is no longer used by countries today as free trade has replaced it throughout the world" is false. While it is true that free trade policies have gained prominence since the age of mercantilism, elements of economic nationalism can still be observed in modern policies.
Adam Smith, a critic of mercantilism, advocated for trade liberalization, arguing that wealth was not finite and that all nations could prosper together. Today, even with a global trend towards free trade, many countries still practice forms of protectionism reminiscent of mercantilist policies. These include imposing tariffs, subsidizing domestic industries, and promoting exports over imports to protect or enhance national economic interests.
This modern blend of free trade and protectionism suggests a continued application of mercantilist principles in today's global economy, albeit not in their original, strict form. Therefore, the assertion that mercantilism has been completely replaced by free trade is inaccurate.