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Mercantilism:

Mercantilism:. Money is Power, and Power is Everything. WHAT IS MERCANTILISM?. An idea formed by Europeans in the 17 th and 18 th centuries (1800s-1900s). What is mercantilism. Mercantilism – Idea that a nation’s existence depended on power, and power depended on wealth

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Mercantilism:

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  1. Mercantilism: Money is Power, and Power is Everything

  2. WHAT IS MERCANTILISM? • An idea formed by Europeans in the 17th and 18th centuries (1800s-1900s)

  3. What is mercantilism • Mercantilism – Idea that a nation’s existence depended on power, and power depended on wealth • Wealth – money and assets (things worth money)

  4. Get rich or die trying? • To gain wealth, a country would capture colonies • Colony – a territory that is controlled by a “parent” country

  5. Money = Power =

  6. colonies • Raw Materials - An unprocessed natural product used to Manufacture Goods • Manufactured Goods – a “final product” made from raw materials

  7. Colonies • Colonies were used to gather Raw Materials for the “parent country” • Then, the “Parent Country” used these raw materials to make manufactured goods

  8. Colonies • The “parent country” then sold these manufactured goods back to the colonies • The money made from the sale of manufactured goods went back to the “parent country”

  9. For Example… • Colonists in America may chop down trees and ship the lumber back to Britain • In England, craftsman make “manufactured goods” (Wooden Furniture) • The Manufactured Goods are then sent back to America to be sold to the colonists

  10. Who did the colony benefit? Answer: The “Parent Country”

  11. Balance of Trade • Import – to bring goods into a country from another country • Export – To sell goods from one country into another

  12. Balance of Trade • Buying goods and selling goods is like a see-saw • Countries want to export more than they import (sell more than they buy)

  13. Balance of trade • Using the colonies for raw materials and then selling them goods helped England have a favorable trade balance • This helped them gain great wealth EXPORTS IMPORTS

  14. How does a country increase their wealth? Answer: Export more than it Imports

  15. Balance of trade • Mercantilism was seen as the only way to build economic (and military) power

  16. Stacking the odds • Achieving an uneven balance of trade is difficult • Britain passed several laws to help them gain an unfair advantage in the world market

  17. Stacking the odds • The British created laws to prevent the colonies from trading directly with any other countries

  18. Stacking the Odds • For example, if France wanted to buy tobacco from America, the colony would have to send the tobacco to Britain first, and then the British would sell it to the French

  19. This is what really happened…

  20. Who makes the most money in this deal? Great Britain! Why?

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