Question

How did mercantilism and trade policies under Great Britain affect economic growth and development in the American colonies? Answer with 500 words or more.

Answer 1

England is small compared to the United States, and has few natural resources. Mercantilism, an economic policy intended to increase the wealth of a nation through exports, flourished in Great Britain between the 16th and 18th centuries. Great Britain enjoyed the greatest benefits of mercantilism from 1640-1660. During this time, the prevailing economic wisdom suggested that the colonies of the empire might supply the mother country with raw materials and resources, and then be used as export markets for finished products

It was assumed that the resulting favorable trade balance would raise national wealth. In this line of thought Great Britain was not alone. The French, Spanish, and Portuguese competed for colonies with the British; it was thought that without colonial wealth no large nation could survive and be self-sufficient. Great Britain imposed restrictions on how its colonies could spend their money or allocate properties, because of this heavy reliance on its colonies.

Under the doctrine of mercantilism, the most important thing for Britain to do was to retain its money and not trade with other countries in order to obtain the necessary items. The job of the colonists was to provide the British with many of those items. Mercantilism, however, was not the only concept of how nations created wealth at the time of the struggle for freedom of the American colonies, and most importantly because they pursued stable and equal economic foundations for the new American state.

The Navigation Acts and the Sugar Act were two of the laws enacted to regulate colonial trade. Acts such as these led to colonial revolt and corruption. Colonists, especially in New England, rebelled against these actions by smuggling illegal goods in and out of the colonies. Ships from the colonies often filled their holds from the French, Dutch and Spanish West Indies with illegal goods. The smugglers would pay bribes to British customs officials who had been employed to control colonial trade. Such officials often received the British a modest salary, and they benefitted from all sides.

The French War and the Indian War checked this delicate deal. The British claimed that colonists should help pay for it, because the war was costly. They claimed they had defended the colonists from attacks from the French and Indians. As a consequence, the British imposed new taxes which terrified the colonists. Between the taxes which they levied and the measures taken by the British Navy to apprehend smugglers, colonists became increasingly angry. American shippers have been increasingly defiant against limits on the trade with other countries. All these acts acted as steps to the Revolution.