Mercantilism was referred to as the guiding doctrine, which, was behind the attempts of regimes of the early modern Atlantic world that would organize their economic existence. Mercantilism’s aim was to structure the state nation’s financial foundation. Nationalism held the promise of improving political stability and creating a better life for all; this was a substantial improvement over the chaos experienced in the earlier era. Mercantilist policies, therefore, were meant to become the economic means to a greater social and political end.
Similar to other economic belief systems such as capitalism and socialism, mercantilism had a few faithful, and many were querulous. Never the less, early modern part of Europe recognized it and complied with various degrees to mercantilism doctrines. Mercantilism became known as the unchallenged assumption that it was the government’s right and responsibility to control economic activities for the benefit of common good. Mercantilism seemed to work thus it attracted a following. When compared to the previous era, there was greater prosperity and more peace in the nation-state. The states success in modern Atlantic Europe encouraged the faithful as well as dissenters. There was however a potential that in its failure or success, it might encourage the rising of alternative voices despite the system promising a greater good for everyone.
Mercantilist thinkers claimed that a strong central government was crucial that the Crown had to ensure that every element of the state achieved that the purpose was not excluding the economy. Mercantilism broadly recognized the concerns and needs of the other components making up the economy - workers and businesses. Mercantilism argued just that the production organizers and workers could achieve satisfaction only when included within the embrace of a strong nation-state. This argument meant that labor and business must accept the sacrifices required in order to support the state and acquiesce in its guidance. The Crown knew best; for the nations, interest was paramount. Capitalism argues that the production organizers are in the best place to make the required decisions. Socialism argues that workers know best.
The nation-state required money the most from the economy. The traditional methods in which monetary needs had been met were becoming unsatisfactory either because the money was not enough or because ran in opposition to the mercantilist state’s larger goals. Taxes collected on land created internal disputes while taxes collected from internal trade divided the national economy. The monarch borrowing abroad limited the state’s independence .The nation had to find new ways to fund the armies in war and the monarch’s diplomats in peace. International trade availed the mechanism. Taxes on foreign trade were directly funneled into the monarch’s treasury and were seen as less divisive and more reliable than land taxes. Loans merely solicited or acquired from large-scale merchants were given to a group of citizens whose allegiance was relied on by the nation’s encouragement and in duty to protecting the overseas enterprises.
An important notion pushed mercantilist's infatuation on expanding overseas. The increase of one’s overseas trade cost the overseas trade of other competing nations. The gold possessed in the monarch’s treasure was gold that was denied to others. That is the notion mercantilists believed. The mercantilist world was a “zero-sum” world; in their world, bullion and trade were fixed in amount. Their gains were a loss to their enemies. It was a predatory world.
A suggested mechanism meant to expand overseas trade in the competitive world was by adding to the region over which the monarch ruled. Spain and Portugal’s success provided great incentives. The new finance and trade capital in Atlantic Europe was known as Antwerp located in the Spanish Netherlands. Lessons learned from the Spanish empires did not go unlearnt in the rest of Europe. In particular, Englishmen envied and appreciated the effect in their country with the consumption of Portuguese sugar imported into London from the Antwerp’s sugar refineries and the tobacco from Spanish colonies imported through the Iberian ports. English money spent on these commodities paid taxes to the Spanish Crown, made some profits to a Spanish merchant, empowered, and enhanced Spain. Expanding overseas trade meant that joint-stock companies had to be created in order to establish an English commercial presence in both the west and the east. Such companies included the London Company of Virginia established in 1606 and the English East India Company established in 1600. In order to encourage these activities, Queen Elizabeth 1’s government acted according to the dictates of the mercantilism policies and asked her subjects to support the move by using mercantilist mantras.
In the same way that mercantilist thinking justified and prompted the establishment of the British colonies in the new world, so did its imperatives dictate the expectations from the new colonies by Britain ? As the empire of the nation-state grew, the formalization of relationships became more structured. The structure took on a mercantilist shape, in theory, at first. With the development of the empire, so did the thinking of its administrators, citizens and beneficiaries both at home and abroad. Tension between the newer realities and the older mercantilist ideas resolved themselves using many different ways. Great Britain ultimately shook itself from mercantilist doctrines altogether inspired by people such as Adam Smith. By then it was known as the nation-state of Europe.
In the same fashion that Britain eventually threw down the mercantilism mantle, so did most of her colonies throw down the empire’s bonds at almost the same time and for related reasons . The imperial links, made from regulation of statute and mercantilist in origin were created to benefit the rising nation-state. Such policies proved to be successful for they helped establish the great nation of Britain. In addition, the policies created the desired era of prosperity and peace at home and not incidentally enrich the European settlers in the colonies constituting the outlying regions of the empire. The latter mentioned were some individuals who used their acquired economic prosperity to become successful and acquire political independence. They later became successful and rival nations. One of the nations that successfully emerged off the British Empire was the United States.
During the first decade of English settlement in America, parliament, and the Crown did very little to regulate or promote transatlantic enterprises. As the provinces grew in population and wealth. However, government officials sought to govern the colonies more effectively in order to ensure England, and not her rivals benefited from her colonies. Beginning on 1645parlianment passed a series of laws commonly known as the navigation act. These acts were to regulate Britain and its overseas colonies. Mercantilism policies were specifically created to make Britain (the mother country) as self-sufficient as it could be. Self-sufficiency would be achieved by obtaining by obtaining raw materials it could not produce from its colonies instead of from its rival economic competitors. This would increase Britain’s stock of bullion while strengthening the merchant navy and weakening its rivals Navy’s by maintaining a manufacturing and trade monopoly with its colonies.
Historians have argued on the influence of the mercantile policy in the birth of the American Revolution 1775-1783. Marxist historians in particular saw the revolution saw the struggle as an economic clash between American and British capitalists and not a struggle over complex constitutional questions. The navigation acts forced the colonies into economic submissiveness to England and the curbing of America’s economic growth; they caused the Anglo-American dispute according to the Marxists. The new trade laws, for instance, hurt the southern planters because they prevented them from trading their products on the open market. The provisions retarded the development and growth of American manufacturing and the price of goods they imported was raised. Because of policy restrictions limiting the trade only to Britain’s expensive products, New England merchants began to smuggle goods from the French West Indies. In the early 1760’s Britain began to suppress colonial smuggling by increasing the number of customs agents, by using patrol feet, and using informers in the colonies. These reasons coupled with various forms of taxes imposed by Britain sparked the Anglo-American crisis.
In the mid-1770s, mercantilist policies fostered an independent movement in the colonies that became revolutionary. The tax burdens laid by the colonialists to fund imperialism, affected the lower middle classes than it did to the southern planters and New England merchants. Within the colonies, planters and merchants were often favored at the cost of a lower social class and Britain was favored at the cost of North America. It is not shocking that the fight for independence from the British imperialism revolutionized to overthrow the government backed favoring of one group over the others in the colonies.
Economic historians having analyzed the issue from an accountant’s perspective argue that the enactment of the Navigation Acts did not prevent economic growth. They further argue that overall, the colonists benefited from living under the British tutelage. Eventually, the Americans accepted the idea that Britain had the right to control imperial trade and therefore made no further efforts after 1700 to relax or repeal the Navigation Acts. The shipping clause contributed greatly to an enormous expansion in the colonies shipbuilding industry and other industries such as the manufacture of bolts, chains and rope making. The Americans did not complain about the attractive bounties coming from England such as lumber, indigo, and naval stores, which helped in diversifying America’s economy. In addition the enumeration of indigo, tobacco, and rice caused little gambling among the southern farmers who made the most profit in North America from growing these products. The restriction on colonial manufacturing on iron and textiles did not interfere with neighborhood or household production but only applied to production for the purpose of water export.
Historians who attempted to establish a causal connection between the American revolution and navigation acts ignore the fact that these acts were passed to prevent British rivals from trading with the British colonies, and not to frustrate its colonies’ economic developments. Parliament to that end in 1650 passed an act stipulating that all cargo from Africa, Asia, or America be sent Britain or any of its territories manned by Englishmen and all cargo destined for Britain’s colonies had to be carried on English vessels. The only affected product of continental America that was affected was tobacco. Parliament agreed to curb the production of tobacco in England that stood as a threat to the tobacco grown in Chesapeake as a compromise.
The indirect benefits America enjoyed from the British control over the sea are often ignored in this British-American balance sheet. The benefits served the colonies commercial interests during peace and war. The military defense, which, was provided by the British redcoats, saved the colonialists much money. Economic historian’s claim that the Americans living under the British rule’s financial costs rather than on their own totaled up to 260 per year per person from 1763-1772 (Merrill, 1940, 300). These statistics argues that Americans benefited from the high wages, dramatic population increase, extensive land ownership, and an increasing number of cultural and educational institutions were exploited and oppressed by the British rule is difficult.
Conclusion
In order to make a final evaluation of the effects of the British mercantilism policy on its colonies, one must consider the costs of the policy and its benefits. The benefits however appear to be less considered when analyzing the mercantilist policy. The benefits including protection of the colonial ships and the protection America received from the Queen's army played a big role in building the commerce of the American colony (Hillary, 1964, 332). Secondly, the benefits can be estimated by the bounties paid for the production of the required products. Against these assurances the colonies, the additional cost of all her imports. Finally, the colonists would need to study the restrictions of their exports either under the laws regulating the export of certain commodities or under the enumerated list. A careful analysis of factors from both arguments could assist in judging the role the mercantilist policies played in their colonies and their effects.
Works Cited
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