Mercantilism and Colonial
Economics: Was it all
bad?
(Get out your
clickers! Ch 48)
Our Goals (SWBAT):
• Describe/Define basic economic
concepts
• Describe British Mercantilism
• Analyze/Evaluate Impact of
Mercantilism on British Colonies
in North America
Clicker Discussion:
I am afraid of economics?
1 = YES
2 = NO
Key Terms:
•
•
•
•
Import
Export
Trade Balance
Trade Deficit (Surplus)
What is Mercantilism?
• Theory of economic
organization
• Way to organize a nation’s
economy
• Goal: make Mother Country
wealthy
• Today? Capitalism, Communism
Basic Ideas of Mercantilism
• Establish colonies
• Control/regulate trade
• Export raw materials & resources
from colony to Mother Country
• Export finished products from
MC to colony
• Favorable Trade Balance for MC
Basic Ideas of Mercantilism
• Navigation Acts (1650s
and 1660s)
 Attempts by Britain to
control trade
• Salutary Neglect
 Britain’s “hands off”
approach helped
colonies
 Until 1760s
Clicker Discussion:
Was Mercantilism GOOD
for Colonies?
1 = YES
2 = NO
Mercantilism: GOOD
• Guaranteed markets
• Protection from competition
• Especially helpful when
colonies young to limit risk
• Raised prices for smugglers 
Why was Mercantilism
BAD for Colonies?
Mercantilism: BAD
• Limited opportunities to trade
• Industrial development
restricted
 Certain UK industries protected
• A bigger problem toward end of
colonial period
 Colonies wealthier
 Colonial economies more diverse
Mercantilism: BAD
• Economics seen as “Zero Sum
Game”
• England $↑, Colonies $↓
• Colonies have trade deficit
• Colonies lack species/money
• Certain Industries in England
protected
For over 150 years,
colonists OK with
mercantilism
What went wrong?
What went wrong?
• French & Indian War
• Grenville’s Policies
• Monopoly given to British East
India Co. (Tea)
• Fear of more restrictions, taxes
Clicker Discussion:
Was Mercantilism GOOD
for Colonies?
1 = YES
2 = NO
DBQ/FRQ Question
To what extent was
mercantilism bad for
England’s colonies in
America?
How Did We Do?
Our Goals (SWBAT):
• Describe/Define basic economic
concepts
• Describe British Mercantilism
• Analyze/Evaluate Impact of
Mercantilism on British Colonies in
North America
1 -------------------------------5
Not so good
Excellent!