Mercantilism

Mercantilism is an economic theory of amassing wealth through trade with other countries. It dominated Europe from the 16th to the 18th century. England accumulated massive wealth by passing the Navigation Acts.

Their activities were to benefit only the mother country.

physiocrats focused on econimic reforms where as mecantilists focused on expoting more than importing

yes it was important

The METROPOLE (mother country) in a mercantilist system benefits most from mercantilism.

Mercantilism is the economic policy that a metropole should have a number of colonies (daughter countries) that provide it material wealth, unrefined resources, and a market for its goods.

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.

a whole bunch probably more than worth counting.

Mercantilism is basically all the money/resources you get is meant to drive up or strengthen the mother country.

A requirement for mercantilism is an active Government policy aimed at creating a positive trade balance for their own country: that is, simply said, earning more money by selling and exporting goods than spending money on imported goods from other countries. Importing goods is only 'good' in mercantilism if you can sell them on to other countries at a profit. That is the reason that some countries tried to 'corner' markets such as the sugar market, the spices market, the grain market etc.

In its purest sense, mercantilism is a bankrupt theory that has no place in the modern world. The principle tenant of mercantilism is that a country should maintain a trade surplus, even if that means that imports are limited by government intervention. This policy is bankrupt for at least two reasons. First, it is inconsistent with the general notion of globalization, which is becoming more and more prevalent in the world. A policy of mercantilism will anger potential trade partners because it will exclude their goods from free access to the mercantilist country's markets. Eventually, a country will find it difficult to export if it imposes oppressive quotas and tariffs on its imports. Second, mercantilism is bankrupt because it hurts the consumers in the mercantilist country. By denying its consumers access to either "cheaper" goods from other countries or more "sophisticated" goods from other countries, the mercantilist country's ordinary consumers suffer.

a large supply of bullion, or gold and silver.

the British wanted the colonies to establish an economy to their advantage. They would use high taxes and tariffs to obtain money for their advantage.

The British encouraged Americans to export raw goods to Britain. PLATO!!

The Navigation Acts were an attempt to put the theory of Mercantilism into practice in the British colonies. 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.

Navigation Acts

kaka

It influenced by influencing because this is so boring. ( I am so sad that you actually have to look online for that answer when it is right in the textbook)

A clinical definition of mercantilism would be, with a lot of truth to it, that it is the system that every country denounces and that every country practices. The most effective (and easiest to get away with) form of trade mercantilism is now used by the PRC, and it is based on manipulating the foreign exchange rate.

creation of a favorable balance of trade

Mercantilism is a theory in political economy which argues that a nation should strive to attain a favorable balance of trade so that the country will accumulate gold and silver. This, it was argued, made the country wealthier and safer.

The principal reason for this belief was the perceived need of the government to have precious metals to fund wars. The heyday of mercantilism was the middle of the 18th Century, after Great Britain had created Bank of England as an instrument for war funding. Under English banking law (and American law by inheritance), banks are allowed to employ "fractional reserve" -- an embezzlement procedure by which banks legally kite checking deposits and, by that practice, create money from thin air. In those days, checks were uncommon, but Bank of England duplicated the procedure by issuing bank notes -- currency similar to a federal reserve note -- and getting Parliament to declare it legal tender. Today, such notes are issued without gold backing, but a private bank could not stay in business in 1750 on that business model. It needed gold reserves to "back" at least a portion of its notes. With gold coming in on a favorable balance of trade, the bank had an increasing supply of actual reserve, allowing it to issue evermore notes. By this, the government bank could stimulate the economy and appear to increase prosperity by creating a banking boom.

The problem with the theory was that it inevitably relied on Britain's trading partners having an unfavorable balance of trade -- the outlying regions (including the colonies) were expected to arrest their own economic growth for the benefit of the mother country. Initially, American colonials accepted the idea that Parliament had the power to regulate "interstate" commerce (trade amongst the empire's members). But, eventually, at least some Americans (Thomas Jefferson among them) came to realize that they were being played for suckers. This induced them to question Parliament's power, the abuse of which was added to American grievances. Jefferson in particular wrote of the inequity of requiring American producers to, e.g., catch the beaver, then send the pelt to England so that an English firm could turn it into a hat. Why, Jefferson wanted to know, could there not be an American hat company in America which would not have to incur the expense of double shipping?

Of course, once Americans started thinking in terms of local control of what was essentially a local economy, there was one less reason for maintaining the closest of ties with England. The general perception that Parliament, if allowed to legislate universally, always would vote to shift costs outside of England while voting to bring all the benefits there was fatal to maintaining the old political ties. Although most Americans still believed that Parliament had the power to legislate over trade, when those abuses were added to the far more inflammatory issue of local taxation, it only aroused colonial outrage over the tax issue all the more. Here was Parliament using its power over trade to impose costs on colonials so it could vote benefits to England, and now it wanted to use systems of direct taxation to accomplish the same end to an even greater degree. This convinced Americans that continuing to support the Crown eventually would strip them of everything they owned and had worked for. At that point, it was time to form a new country.

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.

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.

The Navigation Acts implemented Britain's mercantilist policy through providing structure. The items were watched more closely so they could be taxed.

Principles of mercantilism are that the government must encourage exports that will bring in more gold or silver and discourage imports. Also, manufacturers should be the choice for exports because increased value from labor and monopoly will occur.

To provide raw materials