Mercantilism is an economic philosophy that suggests that the amount of trade possible among countries of the world is a fixed quantity and a single country's ability to participate in that trade governs how well it fares. Whether a country has capital to invest or the necessary cash and other resources to participate determine their trade balance (or imbalance) thus determining their level of benefit from the world wide trade.
It could certainly spur economic growth as a country works to participate more fully and more to its advantage on the international stage. Capital may be more efficiently invested or moved and various internal movements to encourage a positive trade balance may also encourage growth.
It may cause conflict as one nation finds itself unable to efficiently or peacefully take advantage of the global trade and strikes out against another nation in order to increase their share or take control of a portion of that trade.
During 16th to 18th century Great Britain practiced an economic philosophy called Mercantilism in international trade. Great Britain, the mother country was the largest empire in history and, for over a century, was the foremost global power. Colonizing America and pursuing a policy of mercantilism greatly increased their power.Mercantilism is the idea that colonies existed for the benefit of the Mother Country and it states that nation becomes stronger by keeping strict control over its trade. Britain sought to increase its power by obtaining large amount of silver and gold and by establishing favorable trade with its thirteen colonies. Based on these ideas, Great Britain, the mother country made decisions that were more advantageous to themselves than they were to the colonies. There were many regulations that were passed to support this theory; Navigation Act of 1651, Act of 1660, and many laws as well. This definitely angered the colonists, but this didn’t really play a role in prompting Americans to rebel in 1776. There were far more other reasons for the Americans to rebel in 1776. Therefore, Mercantilism plays a small role in sparking the rebellion.
To begin with, the theory of Mercantilism represents the colonists as Britain’s tenants providing “rent” by supplying raw materials to England. In return, colonists had to buy the finished products back from Great Britain. To have to export more than you import is not beneficial. But to Britain it was more than beneficial. Britain wanted to accumulate as much hard money as possible, since colonial money was worthless in England. Hard money was the source of prosperity, prestige, and the strength for a nation.
Furthermore, Mercantilist economy is a managed economy, managed by the larger and stronger power. The mother country, Great Britain wanted to be self-sufficient, but for this to be successful, it needed laws and regulations to protect wealthy British merchants and industrialists at the expense of the colonists. The regulations that supported mercantilism was the Navigation Act of 1651 which stated that all imports or exports had to be carried in Great Britain ships. Act of 1660 required that European nations must sell products to the colonies by first stopping at English ports where they would have to pay a custom duty, taxes, which is a way for Britain gain more money. Exports from the colonies could only be shipped in British or colonial ships and had to be sent to England first. After that, the products would be taxed and was allowed to be sent to other countries in European nation. Colonial products could not be shipped directly to any foreign nation. These laws and regulations supported the theory of Mercantilism.
In addition, Mercantilism doesn’t play much of a factor in prompting Americans to rebel in 1776. As suppliers of raw goods only, the colonies could not compete with Britain in manufacturing. In fact English ships were favored. It’s being said that the relationship between Britain and the colonies in the mid-1700s were good. The colonies joined Britain to fight the French in the seven years’ war. During this time the British had to deal with the wars in Europe and really didn't enforce the Navigation Acts, due to their focus with the war. Colonists began to prosper on its own by trading with non-British colonies in the Caribbean. Britain once again tried to enforce these laws after the French and Indian War, but the colonists objected. Moreover, Britain had a lot of debt from the war and thought that the colonies in America should pay much of the debt so Britain imposed several acts such as the Stamp and Townsend act. Because of this, their relationship deteriorated, prompting Americans to rebel in 1776
In conclusion, Mercantilism is a theory that basically stated that the colonists existed for the benefit of the mother country. Many regulations were passed to support this theory. But, once the French and Indian War began the theory became a little loose since Britain’s main focus was the war. Britain didn’t really get to enforce the Navigation acts. Mercantilism didn’t really play a big role in prompting the rebellion of 1776, but the events that did play big role would be after the seven years of war.