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Mercantilism
Definition of Mercantilism
• Mercantilism is
an economic
theory stating
that colonies
exist to benefit
the parent
country
How does mercantilism work?
• In the system of
mercantilism, the colony
provides raw materials (like
fur, lumber, mineral ores) to
the parent country
• The parent country
manufactures goods from
those raw materials and sells
the manufactured goods to
the colony.
A. Colonies provide RAW MATERIALS (like
LUMBER, FURS, ORES) that the parent country
use to produce MANUFACTURED GOODS
(like FURNITURE & TOOLS)
B. The parent country sells the
MANUFACTURED GOODS back to the
colonists. (The colonies provide a market for
the goods.)
Mercantilism is exclusive.
• The colony must trade
only with the parent
country.
• If the colony can get
goods only from another
country, the goods must
be shipped to the parent
country and then sent to
the colony.
C. Colonies are not supposed to develop
any industry/manufacturing because
they are supposed to get those
products from the PARENT country.
However, due to the distance between
England and her colonies, colonies
soon begin industries.
D. SHIPBUILDING becomes an
important NEW ENGLAND industry,
because colonial trade can be
conducted on colonial-built SHIPS
E. The parent country gets rich! It has a
monopoly on trade, so English colonies can
only trade with England. Any trade with
another country is illegal - SMUGGLING
F. For about 100 years, the English colonists do
what they want (manufacturing, trading with
other countries) because England is too far
away to police the situation.
G.
The NAVIGATION LAWS were a series
of laws regulating trade between England and
her colonies.
The government is involved.
• Under the system of
mercantilism, the
government regulates the
economy for the good of
the empire.
• The good of the individual
is not considered.
TRIANGULAR TRADE ROUTES
• TRIANGULAR
TRADE ROUTES trade routes
moving raw
materials and
manufactured
goods between
Europe, Africa and
the colonies.
• MIDDLE
PASSAGE - the
most
INHUMANE
leg of the
triangular trade
routes in which
African SLAVES
were brought to
the New World