They would grant subsidies as a cash payment in order to encourage someone to make a certain product. They would also give certain companies an exclusive right to promote a product, creating a monopoly on it. This would take away all the competition for that product within the country. The government also imposed protective tariffs, or a tax on imports. This allowed for English companies to raise their prices on things and still have their prices be lower than the competition from other countries, since the tax added so much onto the price. All of these incentives decreased risk and competition within the economy of a country. Mercantilism is not about individualism, but the whole country working as a team to produce what is needed in order for the country to be self-sufficient.
The insurance of sea power was also very important to be self-sufficient. Shipping was a very important industry. Shipyards were important so that a country could build it’s own ships to export their goods. Sea power was essential to control foreign markets. A great merchant fleet would remove the need for borrowing the ships of another country. This is just one more aspect that is important for a country to be …show more content…
A capital market is a market in which the consumers have a very limited number of suppliers. The colonies are expected to trade exclusively with the mother country. This allows for the mother country to be able to raise prices, since there is no competition.
The English created a trade system where Americans provided raw goods to Britain and Britain used those goods to produce manufactured goods that were sold in European markets, and then back to the colonies. As suppliers of the raw goods, American could not compete with the British in manufacturing. English ships and merchants were always favored, excluding other countries from being able to share in the British Empire’s wealth. The English Parliament passed the Navigation Acts that severely limited the colonies’ trade options. The Navigation Acts permitted only British ships to carry American