Mercantilism The American Colonies were formed from the benefits and harms of mercantilism.

Mercantilism is an economic system in which nations seek to increase wealth and power by obtaining gold and silver, an establishing a favorable balance of trade. Mercantilism was damaging to the Colonies economy, but there were also benefits. Mercantilism limited trade, encouraged colonies to be dependant on England, but most importantly created a sturdy foundation colonist could build upon in the future. The first way mercantilism affected the American colonies was limiting trade. Trade was cut off from other countries to increase benefits for England. For the first 150 years after the initial settlement English control over the colonies was minimal and little time and energy were focused on colonial production. As the colonies grew and became more prosperous, the English realized that the colonies could increase trade, if competition could be eliminated. In 1650, England instituted a series of laws known as the Navigation Acts that limited colonial trade to the British only. After this, the trade American colonies had already established was destroyed as they had to comply with strict British laws. Second, mercantilism lead to England gaining almost complete control over the colonies economy. The small amount of international trade precluded [ruled out] the need for gold coinage(Document 1). International trade was ultimately in the hands of England. The British limited international trade so they earned as much money as possible while keeping the wealth under one nation. Many colonists were left with very little money and stricken with poverty. The selfish restrictions on trade were very harmful to American colonies. Lastly, Mercantilism left the colonies with many skills needed for a successful country to be built. Having a controlling Mother country was unfortunate, but there were some benefits in the end. England believed Inhabitants needed a wise government to harness production, to curb the greedy and destructive tendencies of competition, and to promote and channel exchange of goods through regulation(Document 4). England encouraged production of raw materials in the colonies. This was important because the colonies began to develop strategies to produce large amounts of cash crops and, later on, create a good balance of trade and negotiating to be successful in the competitive economic world. Mercantilism had a great impact on the American colonies. While Englands efforts may have been damaging to the colonies economy, it created a sturdy foundation for future trade and production in America. The colonies restricted trade led to many illegal shipments to other countries and may have had a large impact on the colonies eventually revolting against British control.