Question

new ideas challenge mercantilism
as the 18th century continued, some people began to reject or challenge the principles of mercantilism. europeans living in the colonies, called colonists felt stifled by the heavy tariffs, laws, and trade restrictions. colonists, such as those in great britain’s 13 colonies in north america were particularly angerd by what they saw as unfair laws and taxation.
in 1776 scottish economist adam smith right published a written work called “an inquiry into the nature and causes of the wealth of nations” which is just often shortened to “the wealth of nations”. this book challenged the ideas of mercantilism and strict government control over the economy. adam smith argued that tariffs, trade restrictions, and even the guild system of artisans all restricted competition, and therefore industry and the economy as a whole. instead, adam smith proposed the idea of an open market economy through free trade and increased competition. in the wealth of nations smith argued for a free market and a lesser role of the government in economic decisions. adam smith argued that natural laws determined economic relationships, chief among these were the laws of supply and demand. the ideas of this book would eventually lay the foundation for the principles of capitalism and open market economies, which is an economic system that supports the idea of free trade and choice as a way of achieving prosperity. his ideas would eventually lead to less government interference and control of business and european economies, especially in smith’s home country of great britain. this new laissez faire, or “hands off” approach to the economy in turn would allow capitalism to prosper and coupled with new technologies contributed to the industrial revolution in great britain. open markets, and industrial productions would eventually make great britain the largest and most powerful empire in the world for nearly 100 years.
directions: complete the following questions after having learned about mercantilism.

1. according to the reading, what five european nations competed in intense economic and exploration based rivalries? 1
2. explain how competition for land (or colonies) in the new world was an economic competition between the european nations? 2
3. write a definition for mercantilism in your own words. 1
4. draw a diagram in the space below that shows how mercantilism worked. 1

Explanation:

1. The text does not explicitly list five European nations that competed in economic and exploration - based rivalries. However, during the era of mercantilism, common nations involved in such rivalries were England, France, Spain, Portugal, and the Netherlands.
2. The competition for land (colonies) in the New World was an economic competition because colonies provided raw materials for the mother - countries' industries. They also served as markets for the finished goods produced in Europe. This allowed the European nations to accumulate wealth, which was a key aspect of mercantilist policies.
3. Mercantilism is an economic system where a nation aims to increase its wealth and power by maximizing exports and minimizing imports. It often involves government intervention through tariffs, trade restrictions, and the acquisition of colonies to secure resources and markets.
4. A simple diagram for mercantilism could have three main parts: The mother - country at the top. Arrows pointing from the colonies to the mother - country represent the flow of raw materials (like gold, silver, timber, etc.). Arrows pointing from the mother - country to the colonies represent the flow of finished goods. There could also be a box labeled "Government Regulations" with arrows pointing to both the mother - country's trade and the colonies' trade, indicating government control over trade.

Answer:

1. England, France, Spain, Portugal, Netherlands
2. Colonies provided raw materials and markets for European nations, enabling wealth - accumulation.
3. An economic system aiming to increase national wealth by maximizing exports and minimizing imports, with government intervention.
4. Diagram with mother - country, colonies, flow of raw materials and finished goods, and government regulations.