Mercantilism and Colonies

Topics: International trade, Mercantilism, Export Pages: 4 (574 words) Published: January 23, 2013
Mercantilism: Colonies provide primary material and mother countries transform them.

France imports more than it exports, so it makes a lot of profit.

Goal: Expand colonies and enrich the mother country.

The army is there to prevent other countries to trade with some mother countries’ colony. -In the 18th century, it doesn’t work anymore because of contraband. -Because of that Spain will try to fix its economy.

Colonies enrich mother countries through:
-Great-Britain is the best at these two.

Stimulus for domestic production in colonies is favored.
Trade surplus is used to enhance infrastructures of the state, army, etc... -This is also favored.

The Spanish empire was under the Hapsburg control
-Loose way of control.
-Made them fall back behind.

Spain was depending on silver and gold extraction.
Spain was very rural and agricultural.
-Never industrialized
-It didn’t invest the capital it gained
-It remained underdeveloped.

Because they focused only on gold and silver, they experienced a TRADE DEFICIT. -TRADE DEFICIT  EXPORT > IMPORT

Expansion of the population of France and Great-Britain increased demand.

Pirates attacked Spanish convoys since they had silver and gold. -Losing material  decrease import in Spain

Dynamic Economy  Great-Britain..
Lagging Economy  Spain.

Spain borrowed money internationally since it was experiencing a deficient economy.

Hapsburg did something to fix trade deficiency (LOOKUP)

War of Succession gave power to the Bourbons in the 18th century. Positions in the government were sold to people to increase governmental revenues. -Corruption occurs. Locals of colonies corrupt those people that are owning those offices. -This corruption is due to the sharing of power.

Creoles  People of European origin born in colonies.

Audiencia  Powerful bodies
-Legislative that work hand-to-hand with the Viceroy.
-These positions are sold.
-The Creoles...
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