The Rise Of Mercantilism And Its Impacts

The Rise Of Mercantilism And Its Impacts

MERCHANTILISM

It refers to large scale trade or commercial trade conducted through overseas.

Mercantilism: Is the first stage of capitalism that appeared during 15th C where by trade and commerce was conducted by European countries with the continent of Africa, Asia and America through overseas trade and also silver (precious metal) were used as the coin.

Is the period during which feudalism collapsed (demised) as the result of long distance trade conducted between Western Europe countries and other continents in the 15th C.

OR

Is the first stage of capitalism where by its economic system was based on trade and commerce conducted through over seas trade during 15th C-18th C and during this trade a country attracted itself to the use of precious metals (gold and silver) in European transaction.

THE MAIN FEATURES/CHARACTERISTICS OF MERCHANTILISM

1. National Unification

Is the unifying of small states to form one strong state for expansion of internal market, removal of trade barriers and the use of raw materials and other sources available in the same nation.

Therefore during the period of merchantilism many European countries were undergoing national unification so as to become one strong state and be in position to compete with other nations. E.g. England,Wales and Scotland joined to form United Kingdom (Great Britain).

2. Bullionism

During this period there was adaptation and application of gold and silver as the medium of exchange because gold and silver were used as coins in European transaction;

Hence European merchants struggled more and more to get gold and silver from different parts of the world like Zimbabwe, Ghana. etc.

3. Protectionism

During mercantilism European countries protected trade where by each country protected her internal market and natural resources available in a country. This was done in order to protect the interest of trade by not allowing other European countries to compete with them.

E.g. United Kingdom protected internal market by acting navigation acts and impose trade barriers such as custom duties and tariff.

4. National rivalry and militarism.

During the period, mercantilism in many European countries intensified their enmity among themselves which brought constant military confrontation. E.g. Britain fought many wars with French, Spain with Portugal for economic interests.

Example Britain decided to undergo navy forces during the rule of Tudor monarchy in order to piracy the wealth of other European merchants for development of capitalism in Britain.

5. Colonialism

During this period many European countries began to look for other economic interests in other countries in different parts of the world. The Aim was to colonize countries for economic interests such as raw materials, labour, market and areas for investments. Example The Dutch at the cape of South Africa 1652 where they wanted to control and unite South Africa, Spanish and Portugal wanted to control Australia and Canada.

6. Banking sector/financial institutions

These financial institutions provided loans and credit to the European merchants in order to continue conducting overseas trade and development of science and technology especially marine technology, ship building, compass direction, compass bearing, etc. These institutions were Barclays bank and house of Lloyd s.

The Rise Of Mercantilism And Its Impacts

FACTORS/FORCES/CAUSES OF THE RISE OF MERCHANTALISM

There were various factors that led to the rise of merchantalism they are as follows;

1. Internal trade (inter trade and craft).

The Development of guilds and craftsmen during the period of collapse of European feudalism led to the rise of merchantalism because commodities produced by craftsmen and people who were involved in guilds which accelerated the internal trade example ornaments, plates, mirrors, were later on exported to other parts of the world particularly in Africa, hence the rise of mercantilism.

2. Periodic exhibition among European nations.

This promoted the existence of overseas trade among European countries, Africa, Asia and America because the new commodities which were exhibited and new technology acted as the acceleration of merchantilism because merchants and other people of different parts of the world were interested to use the commodities that were exhibited.

3. The development of marine technology with compass direction and compass bearing.

During the 15th century, Europe witnessed rapid changes in scientific curiosity and inquiry. That was a century in which the scientific revolution took firm roots. Meanwhile marine technology among the European nations enabled the merchants to sail even deep sea. The nations and merchants also constructed large ships which could carry bulky materials such as cotton, tobacco and minerals. Merchants benefited greatly from the marine technology as they could sail to various parts of the world.

3. Development of financial institutions and insurance company.

These provided loans; credit and services to European merchants in order to continue involving in trading activities; so the role played by these institutions accumulated more wealth which they used on investment of economic sector hence the rise of merchantalism.

4. The Rise of strong states and political revolution

This provided security among merchants. Example; British after the revolution which removed King Charles I & II from power gave rise of Tudor monarchy. Example The rise of King Henry the navigator facilitated the rise of merchantalism like loans and credit and in France after king Louis was removed from power, French managed to get involved in merchant trade.

5. The role played by enclosure system

This was brought by agrarian revolution, it played a great and important role towards the development of merchantalism because the large scale plantations were established and increase an output of agricultural industrial raw materials like wool, wheat flour, and these agricultural raw materials increased manufactured goods in industries which were needed by European merchants for their own use.

6. Geographical discovery of the new world by Christopher Columbus on 24.10, 1492

led to establishment of plantation and mines in America, Canada, Peru, Colombia, etc.So the establishment of these needed slave labour from Africa after the failure of the red Indians and expressiveness of European criminals and prisoners, hence this led to the establishment of merchantalism because Europeans were in need of raw materials.

7. Profitability of unequal exchange

During this period, European got more wealth by using illegal ways like piracy, kidnapping etc. but also they used to sell in Africa commodities of low value and things, which were unsellable in Europe, things such as mirror, while they obtained things of high value from African continent like Ivory. So this led to the rise and development of merchantalism.

8. Crusade war

This was a religious war between European (Christians) vs. Arabs (Muslims) in the Middle East near Turkey to control trade and capture the whole city. This made the way to become insecure for European traders but also Arabs controlled the trade routes whereby they increased tariffs to European traders. This forced Europeans to the alternative way to reach India (Asia) and Africa for conducting trade. Hence development and the rise of merchantilism.

IMPACTS OF MERCHANTALISM IN EUROPE AND AFRICA

Western Europe and Africa had a relationship which ensured the transfer of wealth from Africa to Europe. According to W. Rodney on his book “How Europe under-developed Africa” 1972 argued that; over that period Africa helped to develop Western Europe and at the same time Europe under-developed Africa.

Trade helped Europe to get numerous developments also the North America benefited from this mercantilism while Africa did not benefit.

IMPACTS OF MERCHANTALISM IN EUROPE

1. Gold and silver accumulated during this period played a very important role in expanding capitalist capital in the economy of Western Europe because it was gold and silver that determined the value of capitalist to develop in terms of money.

2. These trades speed up the European technological development. Example the Trade helped the Europeans in the development of ship building from the 15 th C-19 th C where by sea going vessels of different sizes were designed for slave trade and carrying raw materials from America to Europe and later carry commodities to other parts of the world where markets were available.

3. Merchantalism led to the rise of Sea ports town like Liverpool, Bristol, etc. in these sea ports towns there was a development of manufacturing centers like Ian Cashing which depended on the growth of the port of river.

4. Speed up the development of industrial sector; industries such as textile industries, flour milling, ship industry etc. With development of industries in Europe, it helped European countries to develop as far as capitalism was concerned.

5. The Capital derived from merchantalism helped to a great deal to strengthen transitional links within Western European economy. Example sugar from Caribbean islands was exported from England to France and other parts of the European continent.

6. Merchantalism continued to be source for capital accumulation by European merchants whereby the capital was to be invested in investments such as banks, industries, transport and communication for European development hence capital accumulation was possible due to much exploitation of African resources during merchantalism.

IMPACTS OF MERCHANTALISM IN AFRICA

Africa at large extent was in a negative during this oversea trade because the trade made Africa to be underdeveloped and stagnant all the time, hence the following are the impacts:-

1. Mercantilism led to the rise and fall of some African states. These states grew strong during Trans- Saharan trade like Songhai, Mali, Ghana, Benin but they collapsed because its wealth was destroyed after the establishment of triangular slave trade, but some other states grew strongly after the establishment of mercantilism because its wealth depended on this trade. Example; Dahomey state.

2. Mercantilism led to the rise of state of fear and insecurity among Africans especially in West Africa This was because during mercantilism African leaders were helping the European merchants to capture their fellow Africans and sell to the Europeans, these people were taken as slaves and shipped to the mines and plantations in America. Also the introduction of guns brought political instability among Africans who were fighting among themselves for European interests.

3. Mercantilism led the destruction of African trade which was established among Africans for their own interests by mercantilism. Example, Long Distance Trade conducted from one region to another region, Trans-Saharan trade which was conducted between West Africa and North Africa. This was due to European merchants who changed the outlook of the trade from not benefiting Africans to benefiting Europeans.

4. Mercantilism led to introduction of unequal exchange which was unequal trade whereby during the trade between Africa and European merchants; Europeans benefited due to the value of commodities and raw materials taken from Africa like rhinoceros horns, tortoise shell, coconut oil, ivory, slaves while in exchange Europeans brought to Africa things which were used and could not be sold in Europe. Things such as daggers, empty bottles, ornament, cigarettes, Portuguese wine.etc.

5. Mercantilism led to stagnation of African science and technology especially African local industries and productive forces but also the action of taking Africans as slaves killed science and technology.

6. Mercantilism led to the decline of African agricultural production because in most cases Africans were in state of fear and insecurity and political instability, hence they could not settle together to involve in agricultural production, in Africa led to famine and hunger.

7. Mercantilism led to introduction of slave trade which led to depopulation of African continent because many African young men and energetic were taken as a slaves to offer their labour power in mines and plantations in America.

8. Mercantilism led to the destruction of African culture because during this period Europeans introduced their culture like eating style, dancing style, marriage etc. which all of them meant to kill African culture because Africans ignored their own culture and started to follow European culture.

CONTRIBUTION OF MERCHANTALISM TO THE RISE OF CAPITALISM IN EUROPE

1. Mercantilism led to the accumulation of capital among Europeans. This led to investment and re-investment in economic sectors like banks, industry, transport and communication hence the capital obtained in mercantilism Led to the rise of industrial capitalism.

2. Mercantilism led to the development of financial institutions and insurance companies. These institutions facilitated the development of capitalism especially industrial capitalism because they provided loans, credit and services to the Europeans merchants to continue involved in overseas trade, hence development of capitalism.

3. Mercantilism led to the development of towns, cities, and sea port towns notably Manchester, Leads, Liverpool, Lisbon, Paris, etc. because in these towns there was development of trade and manufacturing center which developed to industrial cities which attracted many of European population to live in those towns and a lot of town requirement were available in those towns. Example water, electricity, good houses.etc.

4. Mercantilism led to advancement and development of science and technology. Example the sea going science and technology like ship building, compass bearing, compass direction, etc. This was because during mercantilism, ships of different size were designed specifically for carrying slaves from Africa to America and used for carrying raw materials from America to Europe and later commodities were taken from Europe to other parts of the world especially Africa where market was available.

5. Mercantilism led to availability of cheap labour in European plantation, mine, and industries. African slaves were taken in a large quantity during this period to America to offer their labor power in plantations established in Canada, USA, etc. but others offered their labor power in European mines established in Peru, Colombia all these led to the development and growth of industries in Europe.

6. Mercantilism led to availability of raw materials which were needed to develop European countries because these raw materials which were produced in the new world like cotton, sugar cane, tobacco, sisal etc. was transported to Europe to be manufactured as commodities and later these commodities were sold in other parts of the world especially in Africa for European development.

7. Mercantilism led to availability of markets both internal and external market for absorbing European industrial goods. During mercantilism European goods were sold in Europe and Africa where markets were available for economic interests of European merchants. Example: European goods which were not purchased in Europe got markets in Africa and Latin America for development of capitalism in Europe.

8. Mercantilism led to Agrarian revolution during the 16 th C where by European merchants started to invest in agricultural sector by using wealth obtained during this oversea trade, especially unequal exchange. The European traders got a lot of wealth by using unequal exchange and started to invest in agricultural sector for more production of raw materials like wheat for making breads and wool for making woolen clothes.

9. Mercantilism led to the emergence of strong military states in order to defend and protect the wealth of nations, merchants and their boundaries e.g. UK during the Tudor monarchy especially the rule of King Henry VIII led Britain to undergo navy forces in order to increase the wealth of Britain after piracy and killing other European merchants who passed near Britain boundary.

10. Mercantilism led to the rise of European nationalism; where by small European nations united together to increase and expand the market for their nations, removed trade barriers among the nations joint, protected merchants and used the resources available among the small nations unified. E.g. UK (Wales, England, Scotland) to form United Kingdom.

CONDITIONS WHICH FORCED MERCHANTS TO CAPTURE SLAVES FROM AFRICA TO AMERICA AND CARRIBEANS

1. Merchantalism

This was an economic system which involved in conducting trade overseas searching for gold and silver. Merchantalism led to the rise of Trans-Atlantic slave trade which was a trading activity which involved Africa, America and Europe. During this trade millions of Africans were shipped to America to provide cheap labour in mines and plantations.

2. Booming capitalist agriculture.

During merchantalism European capitalist established different plantations of coffee, tea, sugar cane, cotton and tobacco which called for massive supply of cheap labours, thus the supply of white labour was getting difficult compared to the expanding needs of the plantations, therefore this called for importation of slaves from Africa.

3. Industrial revolution in Europe.

Due to the industrial revolution, there was need to expand home markets thus the merchants and the ruling class in Europe were afraid of under population, this prompted the campaign against the use of white labourers. The crisis called for massive importation of slaves from Africa to provide cheap labour in mines and plantations.

4. Africans slaves were cheap.

It’s on record that money paid on white labour for ten years could procure on African slaves for life. In addition a white worker was expected to acquire land at the end of the contract while on African slaves was prevented by law from owning land. These conditions necessitated the use of African origin in the new world.

5. Discovery of maritime technology.

This acted as a pushing factor for Africans to be taken as slaves. Maritime technology eased transportation and guided the merchants to locate Africa. Thus be in position to transport people of African origin to the new world.

6. Inability of the indigenous people.

Initially the Europeans were using Native Americans, Red Indians to provide cheap labour power on the plantations and mining centers but later the red Indians died in huge numbers due to plague. This called for importation of African slaves which contributed to the existence of people of African origin in the new world.

7. Discovery of the new world.

The Discovery of the new world by Christopher Columbus in 1492 contributed to the existence of people of African origin in the new world. The discovery led to the establishment of plantations and mining centers that demanded for cheap labours which called for importation of African slaves.