By Patrick Davidson, Class of 2020

How Economics were Integrated into Political Relationships:

The Consequences of Mercantilism

Capitalism did not become the global economic system overnight, and the complex relationships nations and individuals have today were not predestined to form. Throughout the majority of world history, people interacted with each other one-dimensionally. Up until the end of feudalism in the 1500s, a person earned high social status solely through his physical coercion of others. Currency was used rarely, and the possession of money was certainly not linked to one’s position in the social hierarchy. Gradually, people began to view the world with an economic mindset. Their shift in thinking resulted from a specific set of events over hundreds of years. In the 1600s-1800s, the European economic system evolved from stagnant feudalism to modern capitalism. Seventeenth-century economists propelled this transition through the popularization of mercantilism, a method of thinking about international trade in this time period. In the time of mercantilism, European countries competed to make as much money, measured in gold and silver, as possible. A country would prosper if it could create trade policies that benefited its economy while harming the economies of other nations. For the first time in history, Europeans began to conquer land and enslave people as means for generating profit, and competition for potential colonies integrated an economic aspect into political relationships.

In the time of mercantilism, European countries generated profit most efficiently through the colonization of overseas lands. Edward Misselden, a seventeenth-century author and mercantilist, explained the most basic measurement of a country’s success in the time period: “If the native commodities exported do weight down and exceed in value the foreign commodities imported, it is a rule that never fails that then the kingdom grows rich and prospers in estate and stock…” (Document 3). Essentially, Misselden argued that a country would prosper if it exported more goods than it imported. European countries created colonies because overseas lands were equipped with plentiful raw resources and farmable land: the two components necessary to cultivate crops. To achieve a favorable balance of trade for their motherlands, colonists harvested crops in their conquered land and then sold these crops for more money than they spent to produce them. In addition, when European nations colonized land, they could create trade policies that would help them generate profit. For example, in England’s passage of the Navigation Act of 1660, it was stated that:

...no goods or commodities whatsoever shall be imported into or exported out of any lands, islands, plantations or territories to his Majesty belonging or in his possession...but in such ships or vessels as do truly and without fraud belong only to the people of England or Ireland…(Document 9: Navigation Act of 1660).

The English Government prevented foreign ships from importing goods into or exporting goods out of its territories, and in doing so, England created exclusive access to more markets for itself. When a nation colonized land, it could force the inhabitants of this land to only purchase goods from the motherland. Through the enforcement of this policy, a nation increased its exports, and it also eliminated potential markets from competing countries. Because of the value of colonies, European countries demanded them highly and competed for them.

The scarcity of potential colonies provoked European countries to fight wars over them, and victorious countries used their increased economic power to reinforce their political power. Nations competed for overseas land because colonies generated profit far more efficiently than any other means to produce wealth in the time of mercantilism. Therefore, countries primarily achieved success through creating colonies. For years, the Dutch and the English fiercely competed for the conquest of the Caribbean: a potential sugar colony. A Dutch representative described his government’s aggressive mentality: “...our Lords at the Hague have sat close and resolved on the new placard which is augmented and absolutely to set up a West India Company, for taking of the Caribs’ Islands...Great swelling words abound, so that the scene is altered and nothing thought of but domineering over England…” (Document 8). The Dutch desired potential profits in the Caribbean so much so that they became political rivals with England. In this time period, a country gained political power through the possession of the strongest, most equipped military. European nations like the Netherlands and England aggressively competed for colonies and economic power because the profits they made from their colonies funded their national militaries. A wealthy European country could spend its money on weapons, materials for ships, and rations for soldiers in order to build the most forceful military in the world. This same country could then use its powerful military to conquer more overseas land and create more colonies, and it would continue to repeat this process until it created as many exclusive markets in the world as it could.

Europeans could not generate profit in their colonies if they did not enslave millions of Africans and physically force them to do labor as efficiently as possible. Colonists typically produced commodities related to agriculture, and they needed human labor to farm the land where they cultivated crops. The colonists could not make much profit on their plantations if they employed paid farmers or indentured servants because they would need to spend money on transportation and salaries for these workers. In contrast, European merchants did not need to pay nearly as much money to obtain slaves. George Downing, an English mercantilist in the 1600s, traveled to Barbados and observed: “I believe they have brought this year no less than a thousand Negroes, and the more they buy, the better able they are to buy, for in a year and half they will earn...as much as they cost” (Document 7). The obsession for money in the time of mercantilism provoked Europeans to treat others ruthlessly. Nations fought economically motivated wars, but they also enslaved people in order to generate profit. Blinded by their pursuits of prosperity, Europeans simply viewed slaves as machinery to produce profit as opposed to human beings. Slave owners forced as much work out of their slaves as possible in extreme climates to be efficient. Europeans erased the Africans that they enslaved from the social hierarchy through their harsh treatment of them. The slaves possessed close to no human rights, in contrast with the freedom that they held in their native lands prior to the emergence of mercantilism.

International relations between countries and the current social dynamic of the world would be much different if it were not for the consequences of mercantilism. Examining the effects of mercantilism proves the extent to which thought provokes action. Some of the biggest wars in world history were motivated by economics, and they may not have been fought if it were not for the popularization of mercantilist views. The demand for and use of slave labor from the 1600s-1800s caused the development of racism towards people of African descent. The roots of political and social interactions in the present can be traced back to the ideology of merchants in the seventeenth century and beyond.