Mercantile System | Free Essay Example

Mercantile System

Words: 1393
Topic: History
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Introduction

Mercantilism is a system that allows countries to control others. In this case, governments partner with the merchant from their country to suppress the foreign countries. This ensured that the countries maintained their military power. Also, it ensured that the country had a favorable balance of trade over the colonized country. The system revolved around the business of monetary metal. It took a simple form of bullion around the world.

This system had dominated and controlled the economy of Europe countries from the 16th to the 18th century. Therefore, the mercantile system was used as a business enterprise. It was the main pillar of the European economic and trade policy. As a result, European countries experienced disability and frequent war (Bradbum, 2011). The wars resulted due to the resistance of the colonized countries.

Background

There were various countries that used the concept of the mercantile system in their colonies. These include France, Great Britain, and Russia among other countries. This paper will focus on the mercantile system of Britain in the world. Particularly, the paper will consider the mercantile system in North America (Billings, Selby & Tate, 1986).

In this case, it will explore the use of the mercantile system in North America as a business enterprise. Therefore, the paper will seek to understand how the British government used their merchant to propel the business in North America.

Colonies

Great Britain had captured various parts of North America between the 16th and 18th century. Some of the main colonies included Roanoke, Cuttyhunk, Virginia Company, Plymouth, Maine province, and New Hampshire among others. During colonization, the British government improvised business policies and strategies in these colonies.

The policies aimed at developing the economy of Great Britain. Therefore, the policies were oppressive and biased economically.

Business policies

Partnership

One of the essential business enterprise strategies was a partnership. The British government partnered with business merchants in North America for economic gains. In this case, the government would help the merchants to colonize various areas.

Therefore, they entered into an immediate business partnership. As a result, the taxes would go to the government while the merchants took the other revenue. In this light, the colonies were the subject of this partnership. Their resources and services were used as drivers of this business enterprise.

Trade Restrictions

Another crucial business strategy that the British Government implemented was trade restrictions. In this strategy, the North American colonies were not allowed to trade with other countries except Britain. The restrictions were enforced by the royal army ensuring that defaulters were controlled.

This ensured that all the gold and silver from North America landed to Britain. As a result, Britain could control the surplus and gain a lot of revenue for the country. In this light, the taxes went to the Government while the revenues would go to the British merchants.

Wage limitation

The North American colonies were used as a source of human labor. In this case, the Royal Army could facilitate suppression and forced labor. As a result, the Britain Government could limit wages and payments. This ensured that they incurred the low cost and received a lot of revenue.

In a business enterprise, lowering the cost of production and increasing the revenue leads to the increment of the returns. This phenomenon allowed the Britons to enjoy economies of scale (Breen, 1985). Therefore, it is true that North America was used as a business enterprise.

Monopolization

Monopoly is a phenomenon in which the market has a single supplier of a certain good or service. As a result, the supplier is capable of controlling the prices. In this light, business enterprises use the concept of monopoly to dominate the market and earn much revenue. Similarly, Great Britain used monopoly to dominate the market in North America. In this case, they ensured that they were the only suppliers of good.

Therefore, the Britain merchants and Government would raise the price to suit their economic demands and needs. For example, Britain had used staple rights to monopolize the supply of good.

In this case, it had allowed merchants to sell goods in the port monopolistically. These merchants originated from Britain and paid tribute to the Britain Government. In this light, businessmen from other countries were not allowed to sell commodities along the sea shores (Hemphill, 1985).

Export of Metals

The British government banned the export of metals to other countries. In this case, the British government ensured that all the metal resources were exported to Britain. As a result, Great Britain used the metals for business with the outside world. Therefore, they used the colonies as a factor of business enterprise in North America. As a result, their economy enjoyed solvency by using the resources from these colonies.

Maximizing Domestic Resources

During colonization, the colonies did not have any authority over their resources. This enabled the Britain Government to utilize its resources perfectly. In this case, the Britons could not import the resources of production from other countries. Instead, they utilized the domestic resources to the maximum ensuring that all useful factors of production were used. The final products were sold to other countries at a high price.

Also, a part of these products was exported back to Great Britain. Therefore, the final products were available to the Britons at a low price. As a result, the British Government could provide goods to citizens at low cost.

Restricting Domestic Consumption

In business enterprises, domestic consumption is regulated. This ensures that some resources are used to earn income from the external parties. Similarly, the British Government restricted and regulated the consumption of resources domestically. In this light, the Britons restricted the use of natural resources. The natives did not have any rights to use their national resources during colonialism.

For example, the land belonged to the Briton merchants and businessmen. In this case, the Americans could not own land. However, they were allowed to work on the land for the government. The workers could be compensated with little wages. This ensured that the colony acted as a capital business enterprise.

Exportation of Subsidies

A business enterprise aims at capturing subsidies and uses them for business production. The subsidies ensure that the enterprise reduces the cost of production. As a result, the enterprise increases revenue and raises the returns. Similarly, the Britain government used this concept during the colonization period. They exported the subsidies that existed in North American colonies.

This ensured that the subsidies were available to their country for production. These subsidies allowed the country to make significant profits in its original country. Also, the merchants accumulated a lot of wealth from the subsidies. Therefore, the colonies acted as business enterprises.

Networking

A business enterprise works through networks of business that connects them. In this light, the interconnection ensures that the business parts rely on one another for efficient supply and delivery of services or goods. As a result, they enable the businessmen to reduce the cost of operation. Therefore, the cost of doing business decreases hence allowing for high returns and profits. Similarly, the British Government had built a network of colonies in North America.

The colonies were interconnected in various ways that allowed communication. First, they had built roads that interconnected the colonies in North America. This ensured that the goods and services would move from one colony into another. Secondly, each colony had a merchant who was in charge of business activities. This ensured that the Government of Britain controlled the businesses indirectly.

Also, this network helped the merchants to share the various resources that were available. This ensured interdependence between the colonies and fair distribution of the available resources in the colonies. As a result, the colonies did not import any resources outside the colonies. This helped the government and the merchants to enjoy high profits and solvency.

Conclusion

The aim of this paper was to show how the Britons used their colonies in North America as business enterprises. In this light, it has focused on the business activities that the Britons had implemented to ensure that they maintained their economic strength and superiority.

These include the trade restrictions, networks, subsidies, domestic consumption, and partnership among others. In this light, these activities are used in business enterprises in a similar manner. This implies that the Britons used their colonies as business enterprises. Therefore, this paper is all-inclusive.

Works Cited

Billings, Warren M., John E. Selby, and Thad W. Tate. Colonial Virginia: a history. White Plains, N.Y.: KTO Press, 1986. Print.

Bradbum, Douglas. “The Visible Fast; The Chesapeake Tobacco Trade in War and the purpose of Empire.” The William and Mary Quarterly 68.3 (2011): 361-386. Print.

Breen, T. H. Tobacco culture: the mentality of the great Tidewater planters on the eve of Revolution. Princeton, N.J.: Princeton University Press, 1985. Print.

Hemphill, John. Virginia and the English commercial system, 1689-1733: studies in the development and fluctuations of a colonial economy under imperial control. New York: Garland Pub., 1985. Print.