European Colonies in the Americas European Colonization Colonies in order of economic value 1. Areas with silver and gold mines Central Mexico; Peru and Bolivia 2. Trading posts in Asia 3. Cash crop regions Spices – islands in Indonesia Sugar, tobacco, indigo – tropical Americas 4. Slave ports in Africa – labor for cash crops 5. Distant fifth: everything else Canada, New England, Argentina, No. Mexico, Pacific Northwest European Colonization Example of colonial priorities: Seven Years’ War (1756-1763) Britain vs. France; war starts in N. America English colonists: “French and Indian War” France lost, must choose which to give up: Almost all of French Canada or tiny little Guadeloupe Island, in Caribbean Result: France gave up Canada, kept Guadeloupe Why? Guadeloupe’s sugar was worth more than all products from French Canada combined. European Colonization Example of colonial priorities Most valuable real estate in the Western world in the 1700’s? A: Sugar plantations in St. Domingue (Haiti) One of the highest per-capita income in the world Even with slaves included in the calculation! Industrialization, long-term colonization leads to reversal: Haiti now one of the poorest countries Chapter One: The Collision of Cultures © 2011, The McGraw-Hill Companies, Inc. All Rights Reserved. Spanish America 7 Mercantilism • Colonial economic system in Americas • Economic theory/assumptions: • Wealth is finite – can be moved, but not created • Bring in more precious metals than you spend • Manufactured goods more profitable than raw materials • NOT a free trade capitalist system • • • • Merchant class with privileges Monopolies, exclusive licenses in many sectors Colonial economy supposed to be a sealed system Protection against competition Mercantilism Mercantilism • Colonies’ role • “Primary sector” • Raw materials – metals, wood, etc. • Agricultural products • Fish, fur • Some labor, some tax revenue • Most valuable: silver and gold mines • Second most: cash crop areas, esp. sugar • Distant third: everything else • (Minor) market for goods from mother country Mercantilism • Home country (“metropole”) role • Manufactured goods, imports • Much more valuable than raw materials • Government, defense, diplomacy • Source of immigrants • Promote, defend slave trade Mercantilism • Overtly about benefitting home country first • NOT about econ. development of colonies • Discourages economic diversity in colonies • Colonists supposed to benefit indirectly • Profits largely in European hands Mercantilism • Difference between theory and practice • Hard to stop all smuggling, piracy • Smugglers pirates • Large black market • Some areas w/ little European oversight • Question of cost/benefit • Lax enforcement in N. America = “salutary neglect” • Sometimes self-government by default • Sense of independence becomes ingrained • Hard to re-establish control later Mercantilism • Many colonies operated at a loss for the gov’t • Tax revenue often less than gov’t spending High military costs: Seven Years’ War (1756-63) cost: 100 years’ worth of colonial taxes • Gov’t benefits often indirect • Hard to stop smuggling, piracy Mercantilism • Many cols operated at a loss for the imperial gov’t • Profits largely went to private interests • British N. Amer. colonists taxed LIGHTLY • 1763 – 1/26 the level people paid in England • 1765 – Stamp Act • Tax on paper in the colonies • Same tax already established in England (For the past 150 years) • Boston Tea Party (1770) a protest against corporate power in government, NOT against taxes “Primary sector” Most basic, oldest, most fundamental kinds of production • Commodities most directly from natural origin • Farming, hunting, fishing, whaling • “Extractive” industries • Mining, timber, oil drilling broad arrow mark, signifying a “King’s Tree” Historical marker (millstone) Weare, New Hampshire Site of Quimby’s Inn, site of 1772 “Pine Tree Riot”