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Pre-industrial Europe  

Agricultural economies  
 producing food is the basis of all wealth (the "physiocrats")  
    feudal institutions  
    labour "bound" to land  
The challenge of commerce  
    a new source of wealth  
    "mercantilism"  
     enriching the nation through trade  

But change was under way, especially in England, due to: 
- expansion of trade 
- new sources of wealth and power 
- centralization of political authority 
- new  ideas about the nature of economic activity  

What type of institutions European countries passed on to their colonial possessions in America depended on how far they had moved away from feudal to more modern institutions at home. 

Feudalism  

Spain was still largely "feudal" and passed these arrangements on to what is now Latin America. 

France was in transition and planted a weak form of feudalism in New France. 

England was already well beyond feudalism and more in the grip of a commercial, trade oriented system when the British colonies were established in America. 

(But be careful here! These are broad generalizations which grossly over-simplify the topic.) 
  

The Physiocrats  

•    agriculture is the only "productive" activity  
•    farming taps into the "vital forces of nature"  
•    if its agriculture  prospers, so does the nation  
•    policy should favour farmers and land-owners accordingly  

The Commercial Revolution:

•    local economies opened up to broader markets  
•    overland trade to Asia  

As European trade and commerce began to expand  around the world in the 16th Century another new body of ideas was developed as thoughtful people tried to make sense of what was happening  
 

Mercantilism  

•    to enrich the nation by maximizing its wealth 
•    achieving a "favourable balance of trade" 
•    maximise exports 
•    minimize imports 
•    generate a net inflow of "specie" (read "money")  
•    to enable the central authority to unite the nation 
•    to resist foreign aggression 
•    to expand the nation's area of influence in the world  

Mercantilist thought is not a consistent, coherent body of principles, but it reflects a common view that a nation's "wealth" can be influenced by its trade with the rest of the world.  

How? By achieving what they called  " a favourable balance of trade" -- i.e. an excess of exports over imports which would generate a net flow of cash. 

They suggested this could be done by using the power of the state to influence markets: 
- taxing imports to make them more expensive 
- subsidizing producers of exported goods 
- helping domestic producers keep their costs low by regulating wages, promoting population growth… 

But here our main interest is in how this affected the colonial policies of the European powers in North America. 

The Role of Colonies  

The objective of Mercantilist colonial policy was to ensure that the country's colonies supported the economic objectives of the mother country.   

The very best colonies in this respect would be those which provided the mother country with gold and silver directly…Mexico was a classic example of such a "good" colony.  

Spanish policy was to strip the colonies of all their available stores of precious metals. 

French and British policy would have been to do the same if their American colonies had possessed any gold and silver. But they did not. 

They had to make do with using their colonies to supply whatever  cheap raw materials they could to help the mother country achieve  a favourable balance of trade with the rest of the world.  

The very worst colonies from the Mercantilist point of view would be ones which became  competitive with businesses based in the mother country.  
 

The New World in the early 18th Century  

  
By the mid 1700s the known parts of North America had been divided up among three western European powers.  

The largest part (in yellow) was claimed by Spain whose possessions included all of present day Mexico and most of what is now the southwestern US. 

A vast inland region extending inland from the Gulf of St. Lawrence along the St. Lawrence and Great Lakes waterway and then southward through the valley of the Ohio and the Mississippi to the Gulf of Mexico was claimed by the French.  

South-east of New France Britain's  "Thirteen Colonies" were scattered along the Atlantic sea coast. 

North of the French territories lay territory, Rupert's Land, granted by Britain to the Hudson's Bay Company (a claim contested by the French). 
  
 

New France  

-- quasi-feudal agriculture 

Acadia   

-- smuggling  

-- military  

-- cultural  

New France in the 18th century

 + some small settlements  in the Bay of Fundy region based on a peculiar tidewater marshland type of farming.  French interest in  the region appears to have been more in its military, strategic value than economic.  

English-language literature on the history of New France depicts it as having a rather  feeble economy compared to the British colonies to the south. This has been challenged by more recent scholarship which suggests that it compared favourably with them in many respects. (See references in the Guide to Eccles, and Altman, for examples of this reinterpretation.)  
  
 

The British Colonies  

   The "13 Colonies" established along the eastern seabord  
  
   -- havens for religious dissidents   
   -- commercial adventures   
   -- diverse regional economies

Despite the lack of mineral or other resources to support major exports of raw materials to the mother country, the British colonies on the north-eastern Atlantic coast proved to be economically and politically the most vigorous and successful European settlements in North America.  

But the diverse activities of colonial entrepreneurs their brought them into conflict with British commercial interests back home. 

The British colonies further south were able to develop activities complementary to the commercial system of the mother country:  
-tobacco 
- indigo 
- hemp 
- cotton  
  
 

Other British Colonies  

  
Britain's other North American colonies included settlements along the coast of the Island of Newfoundland and the large, sparsely occupied fur-trading region entrusted to the Hudson's Bay Company and known as Rupert's Land, defined as comprising all the lands draining into Hudson Bay.  

The Newfoundland settlements were unique because they developed despite British policy, which was designed to protect the interests of commercial fishing fleets based in Britain by discouraging permanent settlement in Newfoundland. Despite this policy, a local economy began to develop based on: 
- fishing 
- sealing 
- shipping 
- smuggling  

Settlement was also discouraged in Rupert's Land to avoid damaging the resource base of wild beaver upon which the fur trade depended.  
 

British-French Rivalry  

- ends with the collapse of French power in North America  

Treaty of Paris 1763  

In 1759 the British attacked, overwhelmed, and destroyed Quebec in a decisive military victory.

The basis of subsequent British rule was spelled out in a Royal Proclamation of 1763 which

- ganted certain land rights to native people 
- restricted expansion inland by the existing British colonies on the Atlantic coast. 
 

Quebec Act 1774  

The arrangements made by the British government in 1763 were more fully spelled out in the Quebec Act of 1774 which:

- limited the territory of Quebec to the St. Lawrence - Great Lakes  region.  
- granted the French Canadian population of the area the right to maintain the Roman Catholic religion, the French language and culture, and the French civil code as the basis of civil law in the colony.  

However,  much of the commercial life of the colony was soon taken over by English-speaking immigrants from England, Scotland, and the American colonies.   

Even more significant for the future course of development in British North America was the effect the destruction of New France as a military threat had on the relations between Britain and the older British colonies to the south.  

With the destruction of French power in the region, the American colonies no longer needed the protection of British military force to ensure their own security.  
 

Next  

The "remaining" loyal  British North American colonies   
      -- the "unwanted children of divorced parents" (A.R.M. Lower)  

The causes of the American Revolution?  

- less clear than older historians made them out to be 
- new research suggests that the economic grievances of the colonists against Britain were exaggerated 
- political resentment of British rule confined to a minority 

The outcome? 
- against all likelihood, the establishment of the superpower we know today as the USA, plus

- a group of left-over British colonies, the largest of which (Quebec) was inhabited by a conquered people with good reason to hate the British who now ruled over them. 

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