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Mercantilism is the economic theory that a nation's prosperity depends on its supply of gold and silver; that the total volume of trade is unchangeable.

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Mercantilism is the economic theory that a nation's prosperity depends on its supply of gold and silver; that the total volume of trade is unchangeable. This theory suggests that the government should play an active role in the economy by encouraging exports and discouraging imports, especially through the use of tariffs. Spain and England used the mercantile system to benefit the mother countries. The mercantile system had special regulations, which usually extracted some sort of reaction from the colonies. If necessary, the policies would be changed to better suit the mother country. The favorable balance of trade was upheld through certain regulations. No foreign trade was allowed for the colony unless it passed through the mother country first and it moved on mother country ships. Furthermore, no foreign settlers were allowed in the colony. No colonial industry was allowed. The colony had to remain dependent on the mother country for industrial necessities, it was not allowed to become competition for foreign markets, and migrations restrictions limited availability of skilled artisans. ...read more.


Under the provisions of this legislation, trade with the colonies was to be conducted only in English or colonial ships. Certain "enumerated" items (such as sugar, tobacco and indigo) were to be shipped only within the empire. Trade destined for nations outside the empire had to go first to England. Some of the legislation was designed to protect colonial interests. For example, tobacco production in England was prohibited, leaving the colonies as the sole source of this lucrative product. The American colonists were never fully comfortable with these acts, but became ardently opposed with the passage of the Sugar Act of 1773. Some of the regulations and restrictions placed on the colonies, however, extracted a negative reaction from the colonies. The Navigation Acts, more properly called the British Acts of Trade, angered the colonies and created certain resentment between the colonies (American colonies) and the mother country. The acts were an outgrowth of mercantilism, and followed principles laid down by Tudor and early Stuart trade regulations. The rise of the Dutch carrying trade, which threatened to drive English shipping from the seas, was the immediate cause for the Navigation Act of 1651, and it in turn was a major cause of the First Dutch War. ...read more.


Depending on whether or not negative reactions were derived from the mercantile regulations and restrictions, some change might've occurred. In Spain, all colonial trade was channeled through a single port, first Seville and then Cadiz. After 1765, this policy was relaxed to allow trade by other in illicit trade. During the eighteenth century, the Spanish relaxed their colonial restrictions somewhat, but only because they realized that the old system was by then outmoded and unenforceable. In England, vigorous attempts to prevent smuggling in the American colonies after 1765 led to arbitrary seizures of ships and aroused hostility. The legislation had an unfavorable effect on the Channel Islands, Scotland (before the Act of Union of 1707), and especially Ireland, by excluding them from a preferential position within the system. Shaken by the American Revolution, the system, along with mercantilism, fell into decline. The acts were finally repealed in 1849. Mercantilism was widely used in many different superpowers in the 18th century. Depending on what superpower used it, the colonies under the superpowers were restricted from doing certain things, and had to follow certain mercantile regulations. The mercantile systems most likely ended up with the colonies undergoing revolutions (America and England) which resulted in the end of mercantilism. ...read more.

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