What is mercantilism and what did it have to do with the European colonization of North America?

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Mercantilism is the economic theory that posited that European nations should amass as much gold and silver as possible. In addition, European governments believed that they should control their own nation's economy and import raw materials while exporting finished goods. As part of this economic philosophy, nations believed that the...

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Mercantilism is the economic theory that posited that European nations should amass as much gold and silver as possible. In addition, European governments believed that they should control their own nation's economy and import raw materials while exporting finished goods. As part of this economic philosophy, nations believed that the world economy was a zero-sum game—in other words, that there was only a fixed amount of profits to be made, so nations had to beat out other nations in the race to be the most prosperous and powerful nation.

The theory of mercantilism fueled the European colonization of the New World, as European nations wanted to control the importation of raw materials (such as sugar and timber) from the New World. They needed these materials to make finished goods, and they also wanted to control markets to which they could export finished goods. Some nations, such as Spain, were also eager to import as much gold as possible into their coffers as an extension of mercantilism. Eventually, mercantilism was largely replaced by the economic system of capitalism, which fostered a freer market in which individuals, not just governments, could control enterprise.

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Mercantilism is the use of trade and government regulation to make a country wealthy. Countries aim to earn more selling goods to other countries or territories than they spend buying such goods. The profit can then be used to make the country in question more powerful.

Mercantilism drove global trade during the eighteenth century. It spurred exploration as different nations looked for more efficient trade routes, as well as raw materials and new markets. It led European nations, especially Great Britain and France, to want to establish colonies in North America to rival the colonies the Spanish and Portuguese had established in South and Central America.

Colonies were perceived as a good idea because they provided a steady source of raw materials, such as lumber, metals, and furs, that could be sold at a profit by the mother country. They also provided a second significant advantage: they were a captive market for goods sold by their country of origin. Most North American colonies were set up so that they could only sell their goods to their mother country and only buy from the mother country. This was clearly a profitable arrangement for the European nations who established colonies—who could then buy low and sell high. It was also profitable for the colonists because of the abundance of raw materials available to sell back to Europe.

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Mercantilism, also called "commercialism," is the idea that the best way to improve a nation or state is by profiting off of goods and trade. During the colonial period (15th-19th century in North America) the most desired goods in Europe were exotics- silk from China, tea from India, chocolate from South America, sugar from the Caribbean, spices from Thailand, and so on. Expansion into North America and claiming new land for one's own country held the promise of profit, even if it meant stealing or engaging in genocide. One could rest assured that whatever resources they found on the land claimed for their mother country would be profitable simply because they were exotic to the Europeans. 

Explorers and merchants traveling to and from the New World not only hoped to bring exotics into their country, they hoped that the sale of these goods would bring more gold and silver in the form of coinage. Colonies which specialized in exporting particular goods- such as sugar, tobacco, or furs- could expect to not only sell these in their home country but to merchants from much farther away. These merchants from nations which did not have a colony producing that particular good might be willing to pay even more and then profit off of the sale in their home country.

In an attempt to sustain the high demands of mercantile economic philosophy, a number of colonizing nations imported slaves and employed religious and cultural conversion as a means of ensuring free or cheap labor.

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