Prof. Brian Domitrovic: How Mercantilism Started the American Revolution

Summary

The video discusses mercantilism, the economic policy governing colonial America's trade under British rule. Mercantilism held that wealth was finite, leading countries to regulate trade for maximizing exports and minimizing imports. In colonial times, Britain imposed laws like the Navigation Acts to control trade and prevent competition with English manufacturers. Colonists faced taxes on goods, leading to widespread smuggling and resistance against 'no taxation without representation.' These policies fueled tensions, contributing to the American Revolution. The ideas of economic freedom promoted by Adam Smith in 1776 paralleled the political freedom sought in the Declaration of Independence.

Takeaways

• 🌍 Mercantilism was a popular 18th-century belief that wealth in the world was finite, leading nations to compete for resources.
• 📜 To maximize wealth, governments aimed to export more than they imported, often using tariffs and taxes on imports.
• 🏛️ Colonial trade was regulated by the home country to ensure that raw materials were sent there for manufacturing and returned to colonies as finished goods.
• ⛏️ In the New World, European powers used their colonies for economic purposes: the Spanish mined gold, the British grew tobacco, and the French trapped furs.
• 🚢 The British Navigation Acts (1650s-1760s) controlled American trade, ensuring that colonists traded only with English ships and specific goods passed through British ports for taxation.
• 🍬 The Molasses Act of 1733 tried to stop American merchants from buying French sugar, but smuggling was common.
• 💰 Britain's wars, including the French and Indian War, left it in heavy debt, leading to new taxes on the American colonies, like the Sugar Act and Stamp Act.
• ⚖️ Colonists opposed these taxes and customs enforcement, protesting against 'taxation without representation' and demanding their commercial rights.
• 📚 Adam Smith's 'The Wealth of Nations,' written in 1776, criticized mercantilism and advocated for free trade based on supply and demand.
• 🗽 The economic policies imposed by Britain, along with ideas of free trade and representation, contributed to the outbreak of the American Revolution and the colonies' declaration of independence.

Q & A

What is mercantilism and how was it viewed in the 18th century?

Mercantilism was the belief that there was a finite amount of wealth in the world, and nations had to compete to acquire as much of that wealth as possible. Governments aimed to export more than they imported to maximize wealth.

How did colonial trade function under mercantilism in British America?

Colonies sold raw materials like tobacco, rice, and codfish to the home country (Britain), which would then manufacture and sell finished goods back to the colonies. The colonies were prohibited from competing with British manufacturers.

What role did the Navigation Acts play in colonial trade?

The Navigation Acts, passed by the British Parliament, regulated and monopolized American trade by requiring colonists to trade only with English ships and to deal only in approved goods, preventing the creation of a colonial market for unsupplied goods.

How did Britain enforce its mercantilist policies in the American colonies?

Britain enforced its policies through a series of laws and taxes like the Sugar Act, Stamp Act, and Townshend Acts. They also sent Royal customs officials to stop smuggling and ensure taxes were collected.

What commodities did the British colonies in North America export, and what did they import in return?

The colonies exported raw materials like tobacco, rice, and codfish to Britain. In return, they imported luxury items like tea services, finer clothing, and eyeglasses.

Why did the American colonists resist British taxes and regulations in the 1760s and 1770s?

The colonists opposed the new taxes and regulations, arguing for 'no taxation without representation.' They believed their natural commercial rights were violated, leading to fierce resistance.

What was the significance of Adam Smith's *The Wealth of Nations* in the context of the American Revolution?

Adam Smith’s *The Wealth of Nations* was published in 1776, the same year as the Declaration of Independence. Smith criticized mercantilism and promoted free trade, emphasizing that markets should be guided by supply and demand rather than government regulation.

What were the consequences of Britain's wars, like the French and Indian War, on colonial taxation?

Britain's wars, especially the French and Indian War, left the country deeply in debt. To pay off this debt, Parliament imposed new taxes and tariffs on the colonies, leading to resentment and resistance among colonists.

How did the molasses act of 1733 affect New England merchants?

The Molasses Act aimed to stop New England merchants from buying French sugar for rum production by imposing tariffs, but the merchants often evaded this law by smuggling.

How did the American Revolution relate to mercantilist policies and trade restrictions?

The mercantilist policies, including taxes and trade restrictions, contributed to the American colonies’ dissatisfaction with British rule. The economic control Britain imposed played a significant role in driving the colonies to seek independence.