Aim: What was the economic policy of Mercantilism?

•Do Now: Define and give the significance of the term, "mercantilism".

– What does it mean to you?

– Why was it created?

– What impacts, consequences, or “mark” did this economic theory leave behind?

All are asked to use the blank “Mercantilism” chart to help assist in gaining a better understanding of the term. Please fill in the blanks.

–

Firstly, what is it?• An economic system• Goals: bullion (precious metals) and be self-

sufficient• Nation tries to maximize exports, minimize

imports (but why?) to achieve a favorable balance of trade (a surplus)

• Maintained through tariffs (taxes on foreign imports)

• A Mother Country might rely on colonies to supply raw materials often through slave labor in exchange for finished goods

• Inhabitants of colonies would receive protection from mother country in return for exclusive trading rights.

What was mercantilism?

MERCANTILISMEconomic theory of how a nation

can become wealthy

Goal: Build up as much wealth [bullion] as you can!!!

In the words of Malcolm X: “By any means necessary.”

How did a nation follow mercantilism?

The theory of Mercantilism offered a step by step plan for a government to

follow

What was step one of mercantilism?

How To Make A Rich and Powerful NationStep #1

EXPORT more than IMPORT

What you sell to other countries

What you buy from other countries

Goal: Have more money coming in than going out = favorable BALANCE OF TRADE

What was step two of mercantilism?

How To Make A Rich and Powerful NationStep #2

Build Colonies

Colonies provide:

Easy access to cash crops

Places to sell items made in your country

Global Hist. & Geo. – June ’07 [16]

Document 4

The Mercantilist Argument for Colonial Expansion

Source: Philip Dorf, Our Early Heritage: Ancient and Medieval History,Oxford Book Company (adapted)

4 According to this cartoon by Philip Dorf, what is one characteristic of mercantilism from the perspective ofthe mother country? [1]

_____________________________________________________________________________________

_____________________________________________________________________________________

Score

What was step three of mercantilism?

How To Make A Rich and Powerful NationStep #3

High TARIFFS Taxes on outside goods

Problem: people are buying goods from other countries

Solution: Charge them more money to buy foreign goods

What was step four of mercantilism?

How To Make A Rich and Powerful NationStep #4

Increase exports

Don't’ let your colonies trade with other countries

They either buy an item from you or they don’t buy it at all!

TIMBER

FISH

IRON

INDIGO

RICE COTTON

RESOURCES

RESOURCES

MANUFACTURED GOODS

Essential Question

What was goal of mercantilism?

MERCANTILISM

BALANCE OF TRADE

HIGH TARIFFS TRADE w/ COLONIES

BUILD COLONIES