First popularized in Europe during the 1500s, mercantilism was based on the idea that a nation’s wealth and power were best served by increasing exports, in an effort to collect precious metals like gold and silver. Mercantilism replaced the feudal economic system in Western Europe.
How did mercantilism affect the colonies?
Mercantilism was a popular economic philosophy in the 17th and 18th centuries. In this system, the British colonies were moneymakers for the mother country. This pushed the colonists to buy only British goods, instead of goods from other European countries.
Why did the colonists hate mercantilism?
Once under British control, regulations were imposed on the colonies that allowed the colony to produce only raw materials and to trade only with Britain. Many colonists resented the Navigation Acts because they increased regulation and reduced their opportunities for profit, while England profited from colonial work.
What is the significance of mercantilism?
Mercantilism is an economic theory that advocates government regulation of international trade to generate wealth and strengthen national power. Merchants and the government work together to reduce the trade deficit and create a surplus.
How did mercantilism affect Great Britain’s colonies?
Because of this heavy reliance on its colonies, Great Britain imposed restrictions on how its colonies could spend their money or distribute assets. Mercantilism in Great Britain consisted of the economic position that, in order to increase wealth, its colonies would be the supplier of raw materials and exporter of finished products.
When did mercantilism become a major economic theory?
Mercantilism was a major economic theory in Europe between the 16th and 18th centuries. In this lesson, we learn its four basic rules and the effects of mercantilism on history.
What are the four basic principles of mercantilism?
While there are several different versions enacted, there are four basic economic principles or rules of mercantilism. A country becomes rich and powerful by collecting as much gold and silver as possible. A country becomes rich and powerful by increasing the number of colonies it has.
Who was the leader of the mercantilism movement?
Instead of founding America on the idea of mercantilism and creating a culture of high tariffs to protect local interests, many key leaders including James Madison (1751–1836) and Alexander Hamilton (1755–1804) espoused the ideas of free trade and limited government intervention.
