Role of the Colonies in the British Mercantilist System

¶ … mechanics of the mercantilist doctrine from the incipit of the early modern period in Europe, with special focus on the role of the North American colonies in the British mercantilist endeavors.

Mercantilism was the leading economical belief system to support the attempts of regimes and great European powers of the 17th century to organize their economic existence. The reasons standing behind mercantilism originated from the need to provide a solid structure for the financial foundation of "the nation-state -- the emerging post-medieval governmental mode that rapidly replaced feudal localism in northern and Western Europe after the mid-fifteenth century" (McCusker, 1996, p. 337), in order to ensure the survival and prosperity of the state. Specifically, nationalism held the promise of political stability and better living prospects for everyone, bringing considerable improvement to the prior era's imbalance.

The majority of early modern Europe countries, starting with Spain, Portugal, and Great Britain, adopted the mercantilist system to various extents. For the United Kingdom, it became "the unchallenged assumption that . . . government had the right and responsibility to regulate economic activities in the interest of the common good" (McCusker, 1996, p. 337). Therefore, mercantilist policies were also supposed to employ economic means to achieve other political and social aims, and they were endorsed because they appeared to work. Indeed, compared to earlier times, there was more peace and greater prosperity for the supporting nations.

Based on these precepts, it can be asserted that the general mercantilist mindset lead to the establishment of British colonies in the New World, and the mercantilist directives dictated the expectations that Great Britain formed for those colonies. Along with the expansion of the British nation-state and its economic monopoly over American colonies, the formalization of the relationship between the two correlative sides became increasingly more structured (McCusker, 1996, p. 341).

According to the implementation of the mercantilist system, the annexed New World colonies were expected to help Great Britain achieve a profitable balance of trade, together with increasing specie inflow, attempting to reach a higher level of economic self-sufficiency by minimizing imports and maximizing exports. Moreover, the colonies were supposed to supply the mother country with raw material that would otherwise require obtaining by costly imports from external sources.

In addition, the colonies constituted a solid generator of exports by ensuring the production and sale of highly demanded manufactured products on European markets and, at a lower cost, back to the colonies that lacked the means to transform raw materials into manufactured products, which ultimately benefited the welfare of the mother country. In exchange for these economic advantages, Great Britain would grant colonies their military and naval protection. However unilateral the benefits of colonial-mother country relationship were, Great Britain attempted to concede special trading favors to the colonies because they were aware of the problematic French presence in the New World, and needed to make sure that the colonists would hold the British side in the case of an open conflict (McCusker, 1996, p. 352).

The regulation of these new policy developments for New World colonies was done through the enactment of a set of laws entitled the Navigation Acts, which were first instated in 1651 and suffered various alterations in the course of almost a century, yet reaching a comprehensive shape in 1696 (Feldmeth, 2004). The Navigational Acts are sometimes held responsible for beginning the gradual alienation of the North American colonies from the United Kingdom, due their blatant disregard for colonial well-being.

In general, this legislation limited all naval transport trade pertaining to the British Empire to English and colonial vessels, stipulating that imports from other European countries occur in either the ships of the originating country, or the British ones. Furthermore, the Acts required that all exports from Europe to the colonies be shipped exclusively by means of British ships, and specified a list of goods that were forbidden from commercialization in other European ports besides those of Great Britain. The embargoed products on the list include sugar, cotton, tobacco, indigo, wool, naval stores, rice, furs, and copper (Feldmeth, 2004).