Mercantilism

Mercantilism was the economic system used by European Powers over their New World colonies. It required the colonies to have direct trade only with the European power and served to retard the development of industry in the colonies. Colonists tended to try to circumvent mercantilism through smuggling.

1,518 Questions
Mercantilism

What was mercantilism?

Answer
Mercantilism is an economic system that requires two distinct political entities to exist. It requires a metropole, which is the main part of the country and where the leadership sits. It also requires colonies, which are distant regions with unique resources that can transfer these unique resources to the metropole.

In order to create this kind of relationship, leaders from the metropole must create colonies in distant lands in order to extract these resources. This is why mercantilism necessarily leads to colonialism. Note that this form of colonialism can exist within large empires as well. The Russian expansion into Siberia and Central Asia in the 1700s and 1800s mirrors the Western European creation of colonies in the Americas and this expansion was done with the purpose of extracting raw materials that were present in these territories.

Further Elaboration on the Metropole-Colony Relationship
Mercantilism is the economic policy that a metropole should have a number of colonies that provide it material wealth, unrefined resources, and a market for its goods. As a result, according to mercantilism, the colonies were required to engage in two general behaviors: (1) The colonies were locked into exclusive trade between the colonies and the metropole and were not allowed to trade with any other nation or colony. (2) No manufactures or complex goods could be made in the colonial territory. As a result the colonies would provide wealth to the metropole by trading their natural resources for less than they would be worth and by buying manufactures for much more money.

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Mercantilism was based on a nation's power and wealth which was enabled by?

the amount of precious metals that could be had

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Mercantilism

What did mercantilists believe that a country had to do to become wealthy and powerful?

Mercantilism is the idea that there is only a limited amount of wealth in all the world. During the Age of Exploration (1492-1700), Europeans set out to conquer other places in the world so all that wealth will become theirs and they could rule as the most powerful.

Mercantilists believed that to become wealthy and powerful, a country had to export more than it imported. Brenda G.

During the age of Mercantilism even small countries such as the Netherlands and Portugal became world powers from the increase in trade, exploration and exploitation of natural resources. This wealth created by a positive balance of trade enabled these, and other countries to become military powers as well, relative to their landlocked neighbors and the undeveloped regions they exploited. The political economy was based upon the simple premise to "buy low and sell high", as resources like gold in the Americas or spices from the East were obtained cheaply and sold in Europe for a larger amount.

This practice was brought about by advances in marine technology and ship building in the 15th century. But as countries like Great Britain refined products like wool, cotton, wood, etc. via technological advances and financial innovations associated with Capitalism, those countries that relied on Mercantilism, that benefited the aristocracy in particular, nations like Spain and Portugal began to decline by the 18t century.

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Mercantilism

Why were the colonies important in the theory of mercantilism?

The Colonies were important because they supply Great Britain raw resources and material.

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Mercantilism

Is mercantilism the same as economic nationalism?

There are some similarities between mercantilism and economic nationalism, specifically in the idea that the purpose of the economy is to propel and enhance the power of the nation-state. However, mercantilism holds certain economic beliefs which are not necessary in nationalism, such as the idea of zero-sum world trade and objective value of and desire to collect bullion. So, mercantilism and economic nationalism, while similar, are not the same.

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American Revolution
Colonial America
Mercantilism

What were the Navigation Acts?

Answer 1

The Navigation acts were passed by the British parliament. These acts were a series of twenty-nine laws passed to control colonial trade and shipping. All goods sent to America had to be shipped to England first before so the ships that were transporting the goods had to pay a heavy tax for everything before they could finish their trip. Everything traded from the thirteen colonies had to be transported in English ships, the captain had to be English, and three- fourths of the crew had to be English. Some goods, like tobacco, cotton wool, sugar, indigo, lumber, and rice had to go to England first before they could be sold anywhere else. The only people who had the right to trade with the other colonies had to be British citizens.

Answer 2

The Navigation Acts occurred in 1660 and 1663 between the British and the Colonies. England limited the colonies to only being able to trade with the British. All foreign trade was banned, but this made the colonies begin to smuggle from other countries.

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Mercantilism

What were the goals of a mercantilist economic policy in the colonial era?

First of all, you're from Fairfax High School taking AP US History, aren't you? Well, mercantilism is the belief that one person or nation could grow rich only at the expense of another nation, and that a nation's economic health depended on selling as much as possible to foreign lands and buying as little as possible from them. Based on that, the goals of a mercantilist economic policy would be to exploit the natural resources of another nation (in this case America) and try to buy as little as possible from England (one of the main reasons the colonies started to create metal works industries in the North). These industries that exploited the land provided commodities that could be exported to England as an exchange for some manufactured goods. The colonies were trying to be more self-sufficient since the ability of people to acquire manufactured implements lagged far behind the economy's capacity to produce them.

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Mercantilism

What was the theory of mercantilism?

Mercantilism was the economic philosophy underlying early European colonial policy. The object of mercantilism was to increase the wealth of the Mother Country (England) in gold and silver. To accomplish that goal, a favorable balance of trade was desired. That means that a nation would sell more than it would purchase, thus creating a surplus in the treasury. The name of the philosophy points out the importance of merchants in this policy. Merchants would sell products to foreign nations and purchased items to be sold within the nation. Theorists using this model tended to view the market as a pie that was up for grabs. Wealth was always gained at the expense of other nations. For some, the ideal was to become self-sufficient. The nation would produce everything its people needed and buy nothing from foreign nations -- thus the idea of the trade deficit. Since the ideal could not be accomplished in the real world of economics, the object of mercantilism was to minimize imports that cost money and maximize exports and the trade that brought money in to the nation.

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Mercantilism

What is mercantilism?

Historically

Mercantilism is the theory that states that a nation's power is based on its wealth (capital) compared to other nations. This requires the accumulation of valuable commodities, and a balance of trade that favors exports over imports.

In the 16th to 18th century, exploration and colonialism brought valuables and raw materials to Europe. It also opened new markets for exports of manufactured goods. In the American colonies, England monopolized trade, so that the colonies gave their profits to England.

Economics

Mercantilism is the theory that states that a polity's power is based on its wealth compared to other polities in real terms (e.g. gold) and that the purpose of a polity is to accumulate as much as wealth as possible to become powerful. This means that the nature of international economics is inherently zero-sum: all outcomes that are good for one party (e.g. exporting; accumulating gold) are bad for others.

Strict Definition

A system of creating and maintaining wealth through carefully controlled trade.

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Mercantilism

How was mercantilism implemented in the colonies?

According to mercantilism, the colonies were required to engage in two general behaviors: (1) The colonies were locked into exclusive trade between the colonies and the metropole and were not allowed to trade with any other nation or colony. (2) No manufactures or complex goods could be made in the colonial territory. As a result the colonies would provide wealth to the metropole by trading their natural resources for less than they would be worth and by buying manufactures for much more money.

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Business & Finance
Economics
Mercantilism

How does mercantilism compare with a free enterprise system?

Mercantilism is a system where economics is seen as a zero-sum game. As a result, metropoles passed regulations forcing their colonies to only trade with them in a scheme to maximize the value-added for the metropole. By contrast, a free enterprise system runs on the assumption that if each producer and consumer makes decisions exclusively based on personal interest (usually cost), wealth continually expands. Instead of being a zero-sum international economy, it becomes a question of an expanding pie.

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Mercantilism

How did mercantilism help England but hurt its American colonies?

its just did bad stuff

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Mercantilism

According to the theory of mercantilism what colonies existed primarily to?

provide food and raw materials.

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History, Politics & Society
Economics
Mercantilism

What theory holds that a nation's power depended on expanding its trade?

mercantilism. let me guess, Chapter 4: The Colonies Grow [1607-1770] 8th grade book titled "The American Republic?"

Yeah. I feel your pain.

mercantilism - Theory that holds that each nation's power was measured by its wealth, especially in gold. To secure wealth, a country needed to maximize its sale of goods abroad in exchange for gold ... Proclamation of 1763 - Issued by George III to assert direct British control of land transaction, settlement, trade

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How will mercantilism benefit the Mother country?

If trade expands in the colonies it will make the colony stronger and more popular (more settlers) and the trading products will go the the mother country

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Mercantilism

Did Mercantilism benefit the colonies?

NO. Generally speaking, the restrictions on trade imposed on the colonies because of mercantilism led to an extraction of wealth from the colonies and a sending of that wealth to the metropole. Accordingly, the economy of many colonial regions was supplemented quite substantially by smuggling or illegal trading with other more-proximate colonial regions and foreign powers that could provide goods with less of a possibility of wealth extraction.

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Mercantilism

Why did the british parliament use the policy of mercantilism?

Mercantilism (although not so called at the time) was practised by all countries. Because all international trade was conducted with precious metals, governments wanted to ensure that their supply of precious metals was increasing rather than decreasing, and to accomplish that, they used tariffs on imported goods, and various other methods to try and ensure they exported more than they imported.

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Mercantilism

How did the European policy of mercantilism benefit the home countries?

goods were made available due to a central trading system where businesses could communicate more closely to produce and sell products to the people

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Mercantilism

What were the advantages and disadvantages of mercantilism?

Mercantilism was created to increase the profit made by a country. The mother country sends a people to another territory to create a colony. The colony extracts material from the new territory and sells it back to the mother country, who converts the material to finished goods that they can sell to other countries.

Some of the disadvantages were that there were being resources taken away from the territory.

Also, the colony was only allowed to trade with the original country.

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Mercantilism

How did mercantilism affect England relationship and the colonies?

The colonies resented many of the acts that Britain passed in favor of mercantilism. It limited the amount of manufacturing and production that the colonies could do in favor of the mother country. Indirectly led to revolution.

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Mercantilism

How did mercantilism influence trade between europeean nations and the colonists?

The object of mercantilism was to minimize imports that cost the nation money, and maximize exports that made the nation money. Colonies were a means of reducing England's dependence on foreign nations. Each colony would provide a raw material to England and this would allow the nation to not have to purchase that product from another nation. By establishing colonies loyal to the Crown, Great Britain would be expanding a dependable market for the finished products coming out of British industries. The Navigation Acts required that all colonial trade be carried in vessels built and owned by English or colonial merchants. The ships had to be manned by crews composed of British seamen. The Acts also required that European nations must sell products to the colonies by first stoping at English ports where they would have to pay a customs duty (tax). The products were checked and then were permitted to travel to the colonies. All products had to go through these ports controlled by England. This made the cost of the product more expensive but protected the trade of Great Britain. Certain materials from the colonies could only be shipped in British or colonial ships and had to be sent to England first. The product was then taxed and allowed to be sent to its destination in whatever European nation. Colonial products could not be shipped directly to any foreign nation.

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Mercantilism

Who benefits most from mercantilism?

the mother counrty

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Mercantilism

What is mercantilism main goal?

Under the idea of mercantilism, a country will be economically successful if it has more exports than imports.

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Mercantilism

What was the basis of the mercantilist theory of economics?

The idea that the nation could be enriched by controlling trade with colonial markets.

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Mercantilism

What was the british policy of mercantilism?

Government should regulate the trade to increase revenue and power.

Colonies should serve the mother country.

Mother country served by selling manufactured goods to the colonies.

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