1. Money is Power, and Power is Everything
Mercantilism:
Money is Power, and Power is Everything

2. WHAT IS MERCANTILISM?
An idea formed by Europeans in the 17th and 18th centuries (1800s-1900s)

3. What is mercantilism
Mercantilism – Idea that a nation’s existence depended on power, and power depended on wealth
Wealth – money and assets (things worth money)

4. Get rich or die trying?
To gain wealth, a country would capture colonies
Colony – a territory that is controlled by a “parent” country

5. Money = Power =

6. colonies
Raw Materials - An unprocessed natural product used to Manufacture Goods
Manufactured Goods – a “final product” made from raw materials

7. Colonies
Colonies were used to gather Raw Materials for the “parent country”
Then, the “Parent Country” used these raw materials to make manufactured goods

8. Colonies
The “parent country” then sold these manufactured goods back to the colonies
The money made from the sale of manufactured goods went back to the “parent country”

9. For Example…
Colonists in America may chop down trees and ship the lumber back to Britain
In England, craftsman make “manufactured goods” (Wooden Furniture)
The Manufactured Goods are then sent back to America to be sold to the colonists

11. Who did the colony benefit?
Answer: The “Parent Country”

12. Balance of Trade
Import – to bring goods into a country from another country
Export – To sell goods from one country into another

13. Balance of Trade Buying goods and selling goods is like a see-saw
Countries want to export more than they import (sell more than they buy)

14. Balance of trade
Using the colonies for raw materials and then selling them goods helped England have a favorable trade balance
This helped them gain great wealth
EXPORTS IMPORTS

15. How does a country increase their wealth?
Answer: Export more than it Imports

16. Balance of trade
Mercantilism was seen as the only way to build economic (and military) power

17. Stacking the odds Achieving an uneven balance of trade is difficult
Britain passed several laws to help them gain an unfair advantage in the world market

18. Stacking the odds
The British created laws to prevent the colonies from trading directly with any other countries

19. Stacking the Odds
For example, if France wanted to buy tobacco from America, the colony would have to send the tobacco to Britain first, and then the British would sell it to the French

21. This is what really happened…

22. Who makes the most money in this deal?
Great Britain!
Why?