• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

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.

Extracts from this document...

Introduction

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.

Middle

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.

Conclusion

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.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level UK, European & Global Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level UK, European & Global Economics essays

  1. Why was Britain the First Industrial Nation?

    In 1830 the world's first passenger railway, between London and Manchester was opened. The railway had immediate success, which stimulated a railway investment boom. By 1850 over 6,000 miles of track had been laid and the 'railway age', had arrived.

  2. Where does the World Trade Organisation fit in the overall scheme of international public ...

    are more active and effective participants in the WTO, eschewing old-style Special and Differential Treatment and subscribing to basic, common rules for market access. All the agreements mentioned above form part of the Single Undertaking, another Uruguay Round innovation. All WTO members have to comply with the obligations of all

  1. International Trade - I have been asked to investigate the possibility of a company ...

    Trade relations with the United States were in doubt in 1993 when the United States threatened not to renew China's "most favoured nation" (MFN) trading status unless human rights conditions in China improved. However, in May 1994 the United States renewed China's MFN designation, even though the Chinese government had made little progress towards improving its human rights record.

  2. Why did it take until 1833 for the British government to illegalise the transatlantic ...

    So, according to Turley scholars have alleged that Christians have seen the Christian Knowledge as a source of light and redemption for black Africans. This concept is one of the leading arguments put forward in the support of the transatlantic slave trade.

  1. International economic relations

    taking in exchange other goods that it cannot so easily turn out. Adam Smith Adam Smith's attack was probably the boldest one on the "mercantile system" which was already tottering both because economic changes had given some of these doctrines an antiquarian flavor and because the piecemeal invalidations of these

  2. By the mid nineteenth century, Britain had been the world's strongest economic power for ...

    The counter arguments of S.B. Saul, Charles Wilson and other 'optimistic' historians will then be examined and finally, the arguments of McCloskey, Roderick Floud and other historians relying on quantitative assessments will be discussed.

  1. This paper investigates an evidence to support the HOV model by carrying out a ...

    Therefore, trade is regarded as the international exchange of the factors embodied in those goods. Expression of the theory in this form also highlights the logic of the Heckscher-Ohlin theory in its focus on the relative availability of factors (Davis and Weinstein 2001:3).

  2. Recent Trends in Indian Foreign trade

    4).Consultancy Services: In the global market, there is a scope for getting consultancy services. The exporting company offers consultancy services by undertaking turnkey projects in foreign countries. For this purpose, it sends its consultants and exports to foreign countries who guide and direct the manufacturing activities on the spot.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work