Mercantilism in England



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Mercantilism in England

The idea of mercantilism, an economic theory that focuses on the prosperity of a nation based on its supply of capital goods. Mercantilism in England was the country's main economic policy, particularly between the 16th and the 18th century. Generally speaking, this concept relies on the trading and exporting of goods as the main stimulus for the economy, and importing was usually discouraged. The theory of mercantilism in England generally stated that tangible goods like gold and silver were the actual measure of the entire nation's wealth as a whole, even if many citizens did not possess it.



England, Spain, France, and other nations competed with each other to own colonies in North America, South America, Asia, and Africa. Their competition often led to wars. The mercantilists reasoned that even wars were worth the price, because each colony would be a help to its conqueror. England needed raw materials that her colonies could supply. Lumber, wool, iron, cotton, tobacco, rice, and indigo were among the products needed in England. British manufacturers in the meantime needed markets for the goods they produced. The American colonies bought their cloth, furniture, knives, guns, and kitchen utensils from England. In addition, England’s survival as a nation depended on her navy, and the colonies were a constant source of both the timber for her ships and the men who could sail them. Since each nation's wealth in those days was measured in the amounts of gold and silver it possessed, England had yet a another reason for establishing and ruling a vast colonial empire: the colonists would supply their British masters with gold and silver simply by selling their raw materials and buying England’s manufactured products. The difference between what the colonists could pay through their sales of raw materials, and what they owed because of the purchase of manufactured goods, is called the balance of trade. Since the colonists bought more than they sold, their balance of trade was said to be unfavorable. The difference would have to be made up in such precious metals as gold and silver. By thus supplying Britain with this gold and silver, to make up for their unfavorable balance of trade, the American colonists were fulfilling the British mercantilists’ fondest dreams.
England was not content with allowing trade to develop in whatever manner their colonies found convenient or best for their own interests. Instead, England passed special laws to govern the flow of goods across the Atlantic. England placed restrictions on colonial exports, imports, and manufacturing. At the same time, she encouraged the production of certain naval products in the colonies, and permitted American as well as British ships to transport goods between mother England and colonial America. These laws, of course, irritated the colonists who were adversely affected by them. But, whether the colonists were seriously hurt by these laws is an open question which the reader is invited to explore. The question is important because, in this economic relation between crown and colony, one may find the real causes of the American Revolution.
Enumerated Goods – Restrictions on Exports
When the first Englishmen settled in Jamestown, Virginia, and in Plymouth, Massachusetts, England did little to direct their trade. As the colonies grew more prosperous, however, England began to enforce her mercantile ideas. A series of laws were passed in the 1660s known as the Navigation Acts. They were designed to make the American colonies dependent on the manufactured products of England. The colonists, of course, were expected to buy more from England than they sold to her and pay the difference in gold and silver. Therefore, the British forbade all non-English ships from trading with the colonies. Because ships made in the colonies were considered British, they too were restricted to trade between homeland and mother country.
In addition to these regulations, England also enumerated, or listed, special products that could be sold only to British merchants. Included in this list of enumerated goods were products most generally considered essential to England’s wealth and power: sugar, tobacco, cotton, indigo, and later rice, molasses, naval stores (tar, pitch, etc.), furs and iron. English merchants were allowed to sell these goods to whomever they chose as long as they were first taken to England or Scotland where a tariff would be charged. Thus, if a Virginian planter wished to sell his tobacco, he could only sell it to an English merchant. The Englishman then had to take it to England, pay taxes on it there, and only then could he sell the tobacco in France or any other country.



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