1. Colonialism, Mercantilism, & Labor Systems
Lesson 5

2. Main Ideas:
Each country establishes colonies for unique reasons, but colonies serve standard purposes
New systems of labor are developed to accommodate colonial goals
A new economic system is developed based on colonialism and a new global trade market

3. Colonialism Political control for economic benefits
Colonies are established for three reasons:
Provide raw materials for the mother country
Serve as a market for manufactures
Provide an outlet for excess population

4. Colonial Policy The “Mother Country”: National variations:
Maintains colonies as long as they supply resources
MUST keep colonies dependent (politically & economically)
National variations:
SPAIN--all decisions made by king
FRANCE--colonies paid astronomical taxes
ENGLAND—salutary neglect

5. Coercive Labor Practices
Spanish mita system, slave trade
Encomienda System (ESP): landlords granted haciendas; rights to land, resources, & labor of inhabitants
Variations in Slavery:
Caribbean/Brazil: rapid turnover—more cost effective to “buy new ones”
North America: est. much later—end of slave trade forces maintenance

6. Mercantilism
Economic philosophy that promotes commercialism using colonial raw materials & European manufacturing
Necessary factors:
Colonial possessions
Ability to manufacture goods
Currency based on gold & silver

7. Mercantilist Policies
Wealth based on bullion (gold & silver)

8. Mercantilist Policies
Favorable Balance of Trade: sell to other countries (for gold), but don’t buy from them

9. Mercantilist Policies
Become self-sufficient--colonies help this by providing raw materials without foreign trade & a market to sell goods
The Trans-Atlantic Trade System (Triangular Trade)

10. Trans-Atlantic Trade, 1492-1800

11. Problems Depends on raw materials from colonies
Encourages limiting trade
MOST IMPORTANT!--hoarding gold causes terrible inflation (prices in Spain rose 120% in 1500’s)

12. Conclusions
Mercantilism drives quest for colonies (interaction, but negative)
Colonial policies gradually alienate colonies from mother countries
Development of new cultures based on syncretism