The Role of the Colonies in the British Mercantilist System - Essay Example

The Role of the Colonies in the British Mercantilist System In the early 17th century, England was a second rate producer, merchant and naval force. By the end of the century, it pushed out its first class competitors, such as the Dutch and the French, through its military prowess and economic ingenuity (Henretta & Brody 93). King James II, a firm believer in the divine right of a ruler, solidified the colonial rule (Henretta & Brody 70). Though his successors, who would loosen the grip on the power over colonies, the British Empire was based on commerce and thus its protection through military prowess. British Empire expanded using its colonies as a source of economic progress and status symbol among other countries. With King James II, British colonies turned into a source of profit and power for the British Empire. King James II attempted to create a centrally managed Atlantic Empire (Henretta & Brody 93). Though the Glorious Revolution weakened royal grip on power, King James II put forth the foundations of mercantilism, such as the need to expand economically in order to be a glorious empire. British colonies thus served to improve British economic status among other monarchies and independent states and towns in Europe. Mercantilism was a policy promoting self sufficiency among countries of the day (Nettels 105). According to Nettels, “[t]he policy aimed to gain for the nation a high degree of security or self-sufficiency, especially as regards food supply, raw materials needed for essential industries, and the sinews of war” (105). With this goal in mind, the British aristocracy pursued colonies which could produce sugar, tobacco and other food products. In exchange, they were required to buy English manufactured goods, or use the English merchants as intermediaries (Henretta & Brody 69). This practice was prescribed by the Staple Act of 1663, according to which colonial planters bought most of the needed manufactured goods from England (Nettels 109). England prohibited trade with other European countries, as it could not impose favorable terms of trade (Nettels 105). English government designed laws that would keep colonies dependent upon English economy: “Slaves must be bought from English slave traders. The area must depend upon English sources for capital and credit, and the planters could not avail themselves of legal devices in order to ease their burdens of debt” (Nettels 109). Industrial development overwhelmingly took place in England. English policies were to encourage industrial development by any means possible, such as “tariffs, bounties and other forms of state aid” (Nettels 113). Unlike the English manufacturers, colonial manufacturers received no such subsidies (Nettels 113). English government ensured the policy was followed by forbidding colonial governments to assist colonies with any help whatsoever in the field of manufacturing (Nettels 113). The British aristocracy encouraged conquest of new colonies, and imposed itself as a naval power (Nettels 106). Mercantilists viewed it a government’s duty to guard favorable terms of trade and to store an adequate amount of gold and silver (Nettels 106). Therefore, according to the Navigation Act of 1661, the mercantilist government prohibited its citizens all trade with foreign merchants and vessels (Nettels 109). Its military ensured the law was obeyed and they even imposed it on the Dutch and the French. However, the mercantilist government did not create activities in the colonies. According to Nettels, economic activities sprang up from colonists, who decided which economic activity was necessary for their survival in new lands (108). As a result, the government only controlled a certain economic activity once it had proven itself to be profitable. The British government retarded the economic growth of plantations. The mercantilist system in England did not aim to promote economic development in its colonies. Mercantilism aimed to extract wealth from the colonies for the benefit of English aristocracy. However, central government’s policies inadvertently spurred growth of new industries. Shipbuilding and rise of American merchants grew out of the 1661 Navigation Act, as American merchants found a loophole in this act and took over the trade with England (Nettels 110). The English navy drove out the Dutch and the French, thus unwillingly creating space for American merchants. Shipbuilding enabled northerners to violate English laws and trade with West Indies. The Molasses Act of 1733 was an act attempting to reduce trade and communication among colonies (Nettels 112). However, this policy was not enforced. Moreover, New England benefitted from mercantilist policies as England rejected American meat, thus giving New England the liberty to find foreign markets for their produce (Nettels 111). Though the British mercantilist system catalyzed the creation of a strong British Empire, loopholes in it strengthened colonies. Though the colonies were not allowed to trade with the Dutch or the French, the ones in northern America continued to do so, earning additional profits, which did not contribute to the economic growth in England, as colonial families became independent of their ancestral country of origin (Henretta & Brody 69). After 1763, English government increased the harshness of its policies in the colonies. The period of 1689 – 1763 was ridden with wars, which helped colonists obtain funds needed to import manufactured goods from England (Nettels 113). Once wars were finished, colonies were left only with their own products, which did not provide them with high enough profits to afford manufactured goods. As McCusker argues, mercantilism was the guiding principle of the European elites in the 17th and 18th centuries (337). Mercantilism promoted and solidified nation – states, such as the British Empire, by extracting resources from colonies (McCusker 337). However, mercantilism also inadvertently promoted colonial economies, harming English power. Works Cited Henretta, James and David Brody. America: A Concise History Volume I: To 1877. Bedford: St. Martins, 2009. Print. McCusker, John. “British Mercantilist Policies and the American Colonies.” The Cambridge Economic History of the United States, Volume 1. Ed. Engerman, Stanley and Robert Gallman. New York: Cambridge University Press, 1996. Print. Nettels, Curtis. “British Mercantilism and the Economic Development of the Thirteen Colonies.” The Journal of Economic History 12.2 (1952):105-114. Web. 17 Sep. 2012. Read More