Colonial Economics

In Review - Topic 1 and 2 Pangaea – the emergence and evolution of two ecologically different continents Human Migration – the movement of people throughout the world Civilization – complex societies developed throughout the world, some areas faster than others. Age of Enlightenment – as populations grew so did the ability to critically think Age of Exploration – Europeans started to venture out in search of new discoveries Columbian Exchange – the movement of plants, animals and diseases between Europe and America Globalization – one world, integrated economies, the reemergence of Pangaea Clash of the Cultures – Europe, Africa and America

Government – Cooperative rules were established in order to survive. The Establishment of the English 13 Colonies Colonization – People ventured away from Europe where were certain colonies successful and some were not. Government – Cooperative rules were established in order to survive. Religion – Religion was a factor that still influences who we as a country are today. The Land – The concept of land ownership and the location of land had a tremendous impact. All of this will lead us to Topic 3, The French and Indian War

Again - Four Main Points to Consider Last part of Topic 2 - The Colonies Develop Again - Four Main Points to Consider Financial Implications– How did money impact the development of the colonies? Development of Slave Industry– Why did the slave industry develop differently in the colonies? Growth of Cities– What was the impact of urban growth in the colonies? Immigration– How did the migration of the various European people in the colonies impact the culture? For today we will just briefly look at the financial implications and colonial economics

What does economics mean and where did it come from? Economic issues have concerned human beings for millennia, ever since the early primitive hunters considered how to distribute the meat from the day's kill among the members of the tribe. Although trade and markets existed in ancient societies, this idea of a “community economy” did not emerge until the Middle Ages. An even then, this idea of how money was used by the community as a whole was a philosophical one and not necessarily analyzed and practiced. Economics is the social science that analyzes the production distribution and consumption of goods and services.

The English colonies were created to make money! As we move through time it is crucial to understand how the colonies were understood by Parliament The English colonies were created to make money! A financial practice known as Mercantilism was implemented to make this happen. Mercantilists sought to increase England’s wealth through the use of government policies to export goods and restrict imports. How then did Mercantilism work?

Therefore England passed laws that stated the colonists were required to send all the raw materials to them. England then would produce the final manufactured product. These finished products were then sold that were sold on the European markets at a high price Around 1650, the British government introduced a financial policy called Mercantilism. Mercantilism states that in order to build economic strength, a nation must export more goods than it imports. In order to export manufactured goods, there was a need for raw materials. There was also a need to control who would produce a reliable source of raw materials.

Colonies only supplied the natural resources! In addition, financial breaks were given to the English ships and merchants which kept other countries from sharing in the wealth. Colonies only supplied the natural resources! They were not allowed to compete with Britain in terms of manufacturing.

It led to the Triangular trade! Trade routes linked the American Colonies, West Indies, Africa, and England. Each port provided shippers with a payoff and a new cargo. New England rum was shipped to Africa and traded for slaves, which were brought to the West Indies and traded for sugar and molasses, which went back to New England. Other raw goods were shipped from the colonies to England, where they were swapped for a cargo of manufactured goods. England controlled all aspects of the profits. So, did Mercantilism lead to the Columbian Exchange? It led to the Triangular trade!

As this financial practice increased in the colonies so did smuggling As this financial practice increased in the colonies so did smuggling. Also, other European countries tried to become more involved. Therefore, between 1651 and 1673, the English Parliament passed four controversial Navigation Acts that severely restricted colonial trade, to the benefit of England. These Navigation Acts declared : Only the English or colonial ships could carry cargo between imperial ports. Certain goods, including tobacco, rice, and furs, could not be shipped to foreign nations except through England or Scotland. The English Parliament would pay “bounties” to Americans who produced certain raw goods, while raising protectionist tariffs on the same goods produced in other nations. Americans could not compete with English manufacturers in large-scale manufacturing. Navigation Acts

How did this impact the colonists? The Navigation Acts were intended to make the colonies fully dependent on England. The colonies were required to supply the raw materials only and even then purchase these finished goods at high prices. They were not allowed to produce finished goods themselves or sell anything directly to other countries that would lead to a profit for themselves. The Navigation Acts marked the beginning of American resentment. How did this impact the colonists?

English practice known as This is the beginning of the end of English practice known as Salutary Neglect