Do Now Grab notebook from front.

What do we know about Mercantilism? Discuss the following question with your table group: What defines mercantilism?

Basic Tenants of Mercantilism: Acquire Wealth: high amounts of money/precious metals should be kept in the treasury to improve national power. Finite Wealth: only so much to go around. Positive trade balance: more money goes in than goes out. Protectionism: use tariffs or prohibitions to keep foreign imports out.

British Mercantile Policy: 1600-1800

How the British did it Britain buys raw materials from colonies. Britain turns raw materials into finished products (ex. cotton into shirts) Britain sells finished products back to colonies. Huge tariffs prevent colonies from trading with places other than Britain.

Answer in Notebooks: How does this system provide a positive trade balance for Britain? 3 minutes to answer.

British Mercantile Policy: 1600-1800

Consequences of Mercantilism Britain fights trade war with Spain from 1585-1604 Britain fights a series of wars with France from 1689-1815 Britain alienates its American colonies. British government becomes very wealthy.

Adam Smith Wrote a book called “the Wealth of Nations,” one of the most influential ever. Founder of Capitalism. Viewed Mercantilism as a stagnating force.

Assignment: Capitalism vs Mercantilism Read the handout Summarize the beliefs and practices of capitalism. Compare who is driven by profit in each system. Find differences between the two systems.