Explore BrainMass

Mercantilism and the American colonies

Question 1: Define the Mercantilist system and its effects on the colonies proir to 1760. Also explain the initial colonial reaction to this system

Solution Preview

The mercantilist system was in use by The British Empire before the establishment of colonial economies. The basis of this idea was that the supply of goods, and therefore the wealth from their exploitation, was limited. The Imperial economy would grow therefore, if it could "capitalize" on the availabilty of raw materials in its colonies. Raw materials should flow from the colonies to the mother country, where goods would be manufactured and sold on the colonial market. The American colonies, with their rapidly growing townships, ports and plantations, offered an array of materials not available in the British Isles, AND a considerable market for finished goods produced there.
In order to protect the Empire from competing markets in both raw materials and finished goods, legislation was passed to create a trade monopoly with the American colonies, effectively excluding the burgeoning colonies of Spain, Portugal and the Netherlands. In an ...

Solution Summary

This solution deals with the imposition of economic order in the British Empire. Specifically, the limitation and encouragement of economic activities in the American colonies is discussed, with an objective view of the effects on production, trade and general development of the burgeoning American economy.