Mercantilism regarded government control of foreign trade as crucial
for ensuring the prosperity and military security of the state.
LEARNING OBJECTIVE [ edit ]
Summarize the central commitments of mercantilist economic doctrine
KEY POINTS [ edit ]
According to the economic doctrine of mercantilism, the primary purpose of a colony was to
produce exports for the benefit of the home country.
The British government used its power to create monopoliesand protect merchants.
The Navigation Acts required imports and exports to travel via England.
The goal of mercantilism was to run trade surpluses.
Mercantilism allowed the government to collect taxes and duties on all goods.
Tariffs were placed on imports and bounties given for exports.
TERMS [ edit ]
bounty
A reward for some specific act, especially one given by a government or authority
Navigation Acts
The English Navigation Acts were a series of laws that restricted the use of foreign shipping for
trade between England (after 1707 Great Britain) and its colonies, a process which had started in
1651.
tariff
A system of government­imposed duties levied on imported or exported goods; a list of such
duties, or the duties themselves.
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OVERVIEW
Mercantilism was an economic doctrine which held that a nation's power depended on the
value of its exports, and so the government must control all foreign trade. Under
mercantilism, nations sought to establish colonies to produce goods for export as a chief
means of acquiring economic strength and power. Essentially, mercantilists believed that
colonies existed not for the benefit of settlers, but for the benefit of the home country. For
Britain, the goal of mercantilism was to run trade surpluses, so that gold and silver would
pour into London. The government took its share through duties and taxes, with the
remainder going to merchants in Britain. The government spent much of its revenue on a
superb Royal Navy, which not only protected the British colonies but threatened the colonies
of the other empires, and sometimes seized them .
The Battle of Terheide, 10 August 1653, by Willem van de Velde, 1657
Control of trade routes was a primary factor leading to the The Anglo­Dutch Wars.
EFFORTS MADE TO CONTROL TRADE AND PROMOTE EXPORTS
British mercantilism mainly took the form of efforts to control trade. A wide array
of regulations was put in place to encourage exports and discourage imports. A tariff was
placed on imports and a bounty given for exports, while the export of some raw materials
was banned completely. The colonies were captive markets for British industry; the goal was
to enrich the mother country. British mercantilism meant that the government and the
merchants became partners with the goal of increasing political power and private wealth, to
the exclusion of other empires. The government protected its merchants—and kept others
out—by trade barriers, regulations, and subsidies to domesticindustries in order to maximize
exports from and minimize imports into the realm. The government had to fight smuggling—
which became a favorite American technique in the 18th century—to circumvent the
restrictions against trading with the French, Spanish or Dutch.
Throughout the seventeenth and eighteenth centuries, theParliament of England passed the
Navigation Acts to increase the benefit the English derived from its colonies. Among the
provisions, the Acts required that any colonial imports or exports travel only on ships
registered in England. The colonies could not import anything manufactured outside
England unless the goods were first taken to England, where taxes were paid. The colonies
were forbidden to export tobacco and sugar to any nation other than England. Many
colonists resented the Navigation Acts because the laws regulated them more and reduced
opportunities for profit while the English profited from colonial work. The Navigation Acts
expelled foreign merchants from England's domestic trade. The nation aggressively sought
colonies and, once under British control, imposed regulations that allowed the colony to
produce only raw materials and to trade only with Britain. This led to friction with the
inhabitants of these colonies, and mercantilist policies (such as forbidding trade with other
empires and controls over smuggling) were a major irritant leading into the American
Revolution.
Robert Walpole, studio of Jean­Baptiste van Loo, 1740
Robert Walpole was a major proponent of mercantilist policies.