Commercial Revolution

Mercantilism an economic theory world only contained a fixed amount of wealth to increase a countries wealth, one country had to take some wealth from another either through having a higher import/export ratio or in actual conquest of new lands and resources.

Bullionism (gold) Bullionism was the belief that the economic health of a nation could be measured by the amount of precious metal, gold, or silver, which it possessed. Bullionism dictated a favorable balance of trade. That is, for a nation to have gold on hand at he end oft he year, it must export more than it imports. Exports were later defined to include money spent on freight, or insurance, or travel. Each nation tried to achieve economic self- sufficiency. Those who founded new industries should be rewarded by the state.

Treasures from the Americas!

Favorable Balance of Trade Regulated commerce could produce a favorable balance of trade. In general, tariffs should be high on imported manufactured goods and low on imported raw material.

What was needed to maintain mercantilism Regulation of international trade State intervention Monopoly Protection of manufacturers Strong state government

Mercantilism, Purpose of Colonies

Fleets Sea power was necessary to control foreign markets. A powerful merchant fleet would obviate the necessity of using the ships of another nation and becoming dependent on foreign assistance. In addition, a fleet in being could add to a nation's prestige and military power.

Production Thriving agriculture should be carefully encouraged. Domestic production not only precluded imports of food, but farmers also provided a base for taxation. Colonies could provide captive markets for manufactured goods and sources of raw material. A large population was needed to provide a domestic labor force to people colonies.

Need to keep wealth at home Luxury items were to be avoided because they took money out of the economy unnecessarily. State action was needed to regulate and enforce the above policies.

England

Lead to: Competition between nations Navigation and other Trade Acts Avoidance of tariffs Need for large labor force Slave Trade Conflict on the seas Larger Ships more maneuverable ships

England vs. Spain

New Colonial Rivals (slave trade) (slave trade) New Colonial Rivals (slave trade) (slave trade)

Mercantilism in History Between the 15 th and the 18 th centuries in Europe, powerful states were created and were dedicated to the pursuit of economic power and wealth. Governments organized their then-limited capabilities to increase the wealth of the country. Mercantilist governments promoted… exports over imports industrialization over agriculture the protection of domestic production against competition from imports the intervention in trade to promote domestic employment

Mercantilism in History Jean-Baptiste Colbert ( ) an advisor to Louis XIV, argued that states needed to accumulate gold and silver to guarantee power and wealth. Alexander Hamilton ( ) advocated policies to protect the growth of the state’s manufactures. Friedrich List ( ) advocated strong government intervention for economic development and government aid to technology, education and, like Hamilton, to industry.

Mercantilist Perspective Views of human nature Relationship between individuals, society, state and market Relationship between domestic and international society Humans are aggressive and have conflictual tendencies Goal is to increase state power, achieved by regulating economic life; economics is subordinate to state interests. International economy is conflictual; insecurity of anarchy breeds competition; each state defends itself.

Impact of Commercial Revolution sixteenth century change the social structure of the West absolute monarchy of the seventeenth century use of mercantilism as state-controlled economic system.