Final answer:
Mercantilism was an economic theory that drove England to exploit its American colonies for raw materials and markets for manufactured goods through laws like the Navigation Acts. This led to a favorable balance of trade for England but eventual discontent and conflict with the colonies.
Step-by-step explanation:
Theory of Mercantilism and its Application to England and America
Mercantilism is an economic theory that was popular in the 16th to 18th centuries which posits that a country's power is directly related to its wealth, particularly in the form of gold and silver. Under this theory, colonies were seen as sources of raw materials and markets for manufactured goods, leading to policies designed to ensure that the colonies were beneficial to the economy of the mother country. In the case of England and its American colonies, this led to the implementation of various laws and policies, such as the Navigation Laws of the 1660s, which mandated that trade with the colonies was to be conducted only with British ships, aiming to eliminate competition from other European nations and to ensure a favorable balance of trade for England.
Raw materials like tobacco, lumber, and foodstuffs were acquired from the colonies at low cost and were used to manufacture goods in England. These goods were then sold back to the colonies at higher prices. Certain products, including beaver hats and wool, were part of this mercantilist trade. The English government closely monitored and controlled this trade relationship through entities like the Privy Council and the Navigation Acts, which were part of a larger regulatory framework to enforce mercantilist policies.
Due to the mercantilist system, the colonies were not allowed to sell their products, such as tobacco or beaver hats, to anyone but England or its other colonies, often at prices less favorable than they could have obtained on the international market. This led to tension and eventual conflict, sowing the seeds of economic discontent which contributed to the American Revolution.