Question

Why did mercantilism lead to european nations colonizing america?

Answer 1

Mercantilism, an economic theory prioritizing the accumulation of wealth through monopolistic trade and colonization, led European nations to colonize the Americas for raw materials and market control. This resulted in the establishment of colonies like those in British North America to supply mother countries with valuable resources while serving as markets for manufactured goods, reinforcing the economic dominance of colonial powers.

Step-by-step explanation:

Mercantilism was a dominant economic theory that influenced European colonization of the Americas in the sixteenth and seventeenth centuries. As European nations like England, France, and the Netherlands embraced the tenets of mercantilism, they competed to acquire as much wealth as possible, primarily in the form of gold and silver. To achieve this, they established colonies to exploit raw materials and establish monopolistic trade systems.

The mercantilist system required colonies to provide the raw materials for the mother country's industries and also serve as exclusive markets for the finished products. This spurred the European powers to colonize areas in the New World, providing resources such as tobacco, fur, hides, and later sugar, which were hugely profitable commodities. Furthermore, legislation like the Navigation Acts ensured that colonial trade benefitted the home country exclusively, tying the colonies economically to the mother country.

As colonization increased, critics like David Hume and Adam Smith began to argue against mercantilist policies, suggesting that they led to inflation and were harmful to consumers. Smith contended that wealth was not a finite entity and promoted the idea of a free market regulated by competition. Yet, for a significant period, mercantilism dictated European colonization and commerce, with nations seeking to gain and assert power by amassing wealth through their colonies.

Answer 2

Mercantilism led European nations to colonize America in order to acquire raw materials and establish markets for their manufactured goods, increasing national wealth in precious metals. This practice fostered governmental control over trade and economic growth, enticing nations to expand their empires for dominance. Colonies like the British North America provided both resources for the home country and a market for its goods.

Step-by-step explanation:

Mercantilism was an economic theory and practice that promoted governmental regulation of a nation's economy for the purpose of augmenting state power at the expense of rival national powers. It was the economic counterpart of political absolutism. European colonization of America was driven by the mercantilist belief that colonies were crucial for economic domination. Nations like England, France, and the Netherlands believed that by possessing colonies, they could avoid importing goods from others and have ready markets for their manufactured goods, thereby enriching the nation's wealth primarily in gold and silver.

Colonies supplied raw materials necessary for domestic consumption and industrial growth, such as furs, hides, tobacco, and sugar. In turn, these materials helped the home countries to maintain a favorable balance of trade by exporting more than they imported. Tariffs, monopolies, and subsidies were often used to strengthen domestic industries and accumulate precious metals. Meanwhile, the colonists could improve their economic position and participate in a consumer revolution by purchasing goods like ceramics, cutlery, and manufactured cloth, which spurred further economic growth.

The success of Spain and Portugal in the Americas motivated other European nations to establish colonies to harness similar wealth. The imposition of trade regulations, such as the Navigation Acts, ensured that colonies would contribute to the national wealth by limiting their trade to the home country. The colonists often found these arrangements profitable and were thus incentivized to grow more raw materials, despite some regional economic differences arising from variations in land and labor availability.