An Age of Empire and Rebellion

The conquest of the New World, coupled with advancements in shipbuilding and navigation, assisted the rise of a mercantilist economic theory that would come to dominate Early Modern Europe. Mercantilism fit hand-in-glove with European overseas empires, and England capitalized on this theory and fleshed it out to its maximum potential. England shaped her economic policies around mercantilist thought, and the British East India Company forever transformed India’s landscape with its form of trade and conquest. The Early Modern World is, in a sense, a story of rising and toppling European empires: the Portuguese Empire gave way to the Spanish Empire, and the Spanish Empire was usurped by the Dutch Empire; and the Dutch Empire would make room for the British Empire. For the most part all these empires operated on mercantilist principles.

mercantilist theory was dependent upon trade within an empire's territories

Mercantilism has been called the heartbeat of Britain’s empire, but this economic theory wasn’t given a name until Adam Smith coined one in his Wealth of Nations, published in 1776. Mercantilist theory had been on the up-and-up since the late 1500s, and it’s been called a sort of ‘naïve bullionism.’ Bullionism defined a nation’s wealth by the amount of precious metals a nation owned. Such thinking drove Spain’s colonization of South and Central America, and she succeeded; England sought gold in Virginia and failed (but once tobacco exportation began, that failure became a success). France went a different route; her bullion was copper and beaver furs in New France.

But Mercantilism took a different route than bullionism, putting the emphasis on the circulation of money through trade rather than on the packrat hoarding of gold and silver. Mercantilist thinkers advocated increasing national power and wealth by tightened governmental control over the entirety of the national economy; emphasis shifted from the accumulation of precious metals to the development of agriculture and manufacturing, the establishment of foreign trading monopolies, and building a favorable balance of trade. At the heart of mercantilist thought lies a favorable ‘balance of trade.’ When a nation’s exports exceed its imports, that nation enjoys a favorable balance of trade, or a trade surplus. If, however, imports exceed exports, that nation is rutted in an unfavorable balance of trade, or a trade deficit. Mercantilism declared that when merchants of one country had to purchase product from merchants of another, the purchasing country was weakened in relation to the selling country.

In A New Economic History America, historian Gerald Gunderson calls mercantilism ‘a philosophy of nation building, a series of economic controls intended to strengthen a country and its colonies against other antagonistic empires. A major tenet of this view was self-sufficiency: sources of supply—raw materials, agriculture, and industry—should be developed domestically, or in the colonies, to prevent interruptions by hostile foreigners. A large merchant marine was also deemed important. Cargo vessels of that era were designed to repel pirates and thus could be easily adapted to military roles during wars. Finally, the mercantilists were preoccupied with specie (gold and silver), then a universal foundation of money. Short on possessing gold mines, as Spain did, specie could be acquired with a ‘favorable’ balance of trade, that is, through earning foreign exchange by selling exports that brought in more money than as paid out by imports.’ Thus, though differing significantly from bullionism, mercantilism arose in an attempt to gratify bullionism through unconventional means.

Mercantilism put its power in the central government; such a localization of power came about largely due to the fear that if a society lacked a strong central government, the nation risked plunging into the chaos of feudal parochialism; or, in other words, another Dark Age, the memories of which remained present in social consciousness. Thus, in a sense, mercantilist thought served as a bulwark supporting the absolutism of various European empires. The interests of businesses and workers were secondary to the interests of the nation (and thus to the interests of the central government). Such thinking paved the way for how Great Britain saw the colonies not in terms of English outposts but as cash-cows to enrich the trade surplus. Great Britain, however, didn’t embrace mercantilism alone: France, Spain, and the Dutch Republic did so, too, although each in their own ways suited to their specific situations in global trade.

Mercantilism in England fleshed itself out in laws enacted by the English crown and Parliament: high tariffs (trade taxes) on manufactured goods, constructing networks of overseas colonies, and refusing to allow her colonies to trade with other nations. Such policies strengthened national wealth at the expense of the colonies, and so these policies fostered colonial resentment and, in time, helped fuel a passion for independence. Mercantilism declared that the interests of any colony were to be wholly subordinate to those of the mother country. The crown and Parliament saw the colonies as weapons in the continual ‘trade warfare’ between the other world powers. As such, the colonies were to serve as export markets and as suppliers of raw materials to England. Tariffs were placed on imports; bounties (monetary gifts) were put on exports. What this meant in practice is that the colonists had to pay taxes for imports, and English merchants were given money from the government for exporting goods. The export of some raw materials were banned, and the Navigation Acts restricted England’s domestic trade to her and her colonies, cutting out foreign nations. The colonies were denied the right to manufacture; raw goods were sent across the Atlantic for manufacture in England, and then England shipped the goods back across the Atlantic to the colonies where the colonists had to pay taxes on the imports.

It’s important to note that most of the exchanged wealth didn’t go to the crown but to the merchants involved in the trade. Mercantilism fostered a partnership between the central government and the nation’s merchants; in doing so, private power and private wealth blossomed, and the government received a pretty penny through duties and taxes. The government protected its merchants’ interests through trade barriers, subsidies to domestic industries to maximize exports and to minimize imports, and through policies of regulation. This setup built up trade surpluses so that bullion would flow into England, and much of the wealth claimed by the central government went straight to the undying build-up of its Royal Navy, which in turn protected the colonies (because of their trade value) as well as protecting the merchants ferrying goods back and forth across the Atlantic. Such protection was required as the Atlantic became a battleground between warring empires; the early- to mid-1700s witnessed a series of imperial wrestling matches that disrupted trade and brought warfare to the British colonies long before any English-Americans starting whispering about independence.

"The First British Empire," mid-18th century

England acquired its first overseas possession in Newfoundland in 1583, and from the early 1600s on, France and England competed in seizing territories in North America and the Caribbean. These two empires, classic foes from the Middle Ages, would become entangled in a series of wars that were fought both in Europe and in the New World; these Intercolonial Wars would scar the peoples of North America—not just the European settlers, mind you, but to an even greater degree the native populations—from 1688 to 1763. Before these conflicts erupted, however, France’s North American acquisitions in modern-day Canada experienced one of the bloodiest conflicts in North American history. The ‘Beaver Wars’, which lasted from the mid-1600s until early in the 18th century, were fought between France, her native American allies, and other native Americans to determine who would control the profitable fur trade. It wasn’t long after the dust settled that France and England wrangled in North America. These intercolonial wars were theaters of European-centered wars, and they have their own names that are subsumed within the larger European conflicts. King William’s War, fought in the colonies, was part of the European Nine Years War that lasted from 1688 to 1697. The second intercolonial war, Queen Anne’s War, was an extension of the War of the Spanish Succession, which lasted from 1702 to 1713. France and Spain went to war in 1739 in the War of Jenkins Ear, but this war would become enfolded within the 1744-1748 War of the Austrian Succession (known as King George’s War in North America). The last of these conflicts, The French and Indian War, part of the Seven Years War in Europe, lasted from 1754 to 1763 and saw France ousted from the North American continent. England had come out on top, but New France, due north of the English colonies, had served as a threat that could keep colonial mischief in check; its loss would be a catalyst for the burgeoning American Revolution.

the French and Indian wars were damned brutal

The American Revolution, which lasted from 1775 to 1783, can be viewed as a fifth intercolonial war between France and Britain. France, hoping to get back at her rival in the wake of the Seven Years War, aimed to undermine England and reclaim New France, now in British hands. While French support was vital in the Americans winning the revolution, that support didn’t bring about a reclaimed New France and only served to drain France’s coffers. France came out of this fifth intercolonial war victorious, but in doing so she had put her head on the chopping block (a metaphor that would morph into something quite ghastly). France was on the verge of bankruptcy, unrest was rife, and the French commoners were starting to voice their opinions, and loudly. The revolution France supported would aid revolution in France, and it would come at the cost of just under one and a half million lives. This makes the American Revolution, which cost about forty thousand lives (including lives lost to disease), seem almost bloodless.

Britain’s loss of the Thirteen Colonies marks the end of the First British Empire, but Britain would rebuild. Lord Cornwallis, famous in American history for surrendering his army to George Washington at Yorktown in 1781, was named Governor-General of British Indian possessions, and his reforms would shape British India for over a century to come.