This pushed the colonists to buy only British goods, instead of goods from other European countries. Prohibition of colonial purchases of French molasses, though decreed, went largely unenforced, and New England, home of most of the carrying trade, continued prosperous. Smith’s Inquiry Into the Nature and Causes of the Wealth of Nations (1776), appearing just as Britain was about to lose much of its older empire, established the basis of new economic thought—classical economics. François Quesnay, a physician at the court of Louis XV of France, led this school of thought, fundamentally advocating an agricultural economy and holding that productive land was the only genuine wealth, with trade and industry existing for the transfer of agricultural products. During this period, the prevailing economic wisdom suggested that the empire's colonies could supply raw materials and resources to the mother country and subsequently be used as export markets for the finished products. In other words, the British saw the American colonists as tenants who 'paid rent' by providing materials for Britain to use. This fostered the development of the slave trade in many colonies, including America. He regarded what few overseas possessions France then had as ultimate sources of liquid wealth, which they were poorly situated to furnish because they lacked such supplies of bullion as Spain controlled in Mexico and Peru. By then colonial American maritime competition with England had grown so severe that laws of 1663 required colonial ships carrying European goods to America to route them through English ports, where a duty had to be paid, but from lack of enforcement these soon became inoperative. During this time, there were many clear transgressions and human rights violations that were committed by imperial European empires on their colonies in Africa, Asia, and the Americas; although, not all of these were directly rationalized by mercantilism. The British had an empire to run. Between the taxes they imposed and the measures the British Navy took to arrest smugglers, colonists were becoming increasingly angry. document.write(curyear); The way that they kept their economy healthy was through a system called mercantilism. The distance from Britain and the size of the British Empire was an advantage for the colonies. This seemed proven by the fact that Spain’s most powerful years had occurred when it was first reaping a bullion harvest from its overseas possessions. Mismanagement of printed currency resulted in periods of inflation. The French, Spanish, and Portuguese competed with the British for colonies; it was thought that no great nation could exist and be self-sufficient without colonial resources. Compared to the United States, England is small and contains few natural resources. The colonies provided rum, cotton, and other products heavily demanded by imperialists in Africa. A trade war arises when one country retaliates against another by raising import tariffs or placing other restrictions on the other country's imports. Why were the Navigation Acts so important to the British and why did they generally alienate the colonists? In exchange for the land on which they lived, they "paid rent" to Britain by sending almost all of their manufactured goods back to Britain. Mercantilism was the primary economic system of trade between the 16th and the 18th centuries with theorists believing that the amount of wealth in the world was static. Under mercantilism the American colonists were essentially tenants of Britain. What does your poster say? Laisser-faire et laisser-aller (“to let it alone and let it flow”) became the slogan of this British economic school. Colbert, who dominated French policy for 20 years, strictly regulated the economy. More Resources | Mercantilism started in the Middle Ages in Europe with the rise of towns and guilds. The mercantile theory held that colonies exist for the economic benefit of the mother country and are useless unless they help to Western colonialism - Western colonialism - Mercantilism: By the time the term mercantile system was coined in 1776 by the Scottish philosopher Adam Smith, European states had been trying for two centuries to put mercantile theory into practice.