ILRLE 3440 Lecture Notes - Lecture 9: Navigation Acts, Mercantilism, Corn Laws
8 May 2018
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27 February 2018
ECON 3300 - Lecture 09!
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Navigation Acts (1660 - 1663)!
Ensure that British colonies only trade with Britain!•
All trade between colonies needs to be carried on British or colonial ships!•
All commodities produced in the colonies have to be exported to Britain. Any European goods demanded by •
colonies would need to go through Britain and be tax in Britain before being shipped to the colonies.!
Export bounties were provided for some colonial goods#•
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Domestic Policies!
Mercantilists did not believe that society would grow rich by allowing people to do what they wanted. They •
thought free rain would actually make a nation poorer. Passed the following laws:!
Laws regulating consumption!◦
Laws regulating labor markets!◦
Mercantilists believed that low wages are required for economic growth. This means that countries will ‣
need poor people to grow rich. Why did they believe this?!
Cheap labor means cheaper goods which are easier to export!•
Mercantilists believed that high wages led workers to work fewer hours. Thinking is that workers •
have a target wage level and once they meet that target level they stop working. A rise in wages
allows workers to meet their target wage level with less work. !
Regulation of the quality of manufactured goods#◦
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Tax and regulate consumption goods (i.e. Corn Laws 1660 - 1846)!
Corn Laws raise the price of food, forcing workers to increase the number of hours they worked#•
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Sumptuary Laws!
Dictates what clothing one can wear. For example, on Sunday males above 6 years old must wear British woolen •
caps.#
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Direct regulation of labor markets: Statute of Artificers (1563) Maximum Wage Laws!
Regulates wages by giving local Justice of the Peace the ability to set wage rates and minimum working hours!•
Masters paying more than the fixed wage rate were subject to large penalties. Similarly, workers accepting more •
than the fixed wage rate are subject to jail.!
No punishment for paying or accepting less than the wage rate.#•
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Direct regulation through mandatory apprenticeships!
Required 7 year apprenticeships for all manufacturing trades. In towns, the teachers own children could be •
apprentices and other people’s children who met minimum property qualifications.!
Reduces the flow of labor across occupations!◦
Maybe intended to restrict movement of labor out of agriculture#◦
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Regulation of production (mostly French)!
Regulate to ensure high quality product. Think is that if foreign nations are confident in the quality of French •
products it will be easier for France to export its products.#
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Critics of Mercantilism!
David Hume (1711 - 1776) 1752 essay “of balance of trade” introduces the Specie-Flow mechanism in which •
Hume says sustained balance of trade surplus is impossible.!
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Document Summary
Ensure that british colonies only trade with britain. All trade between colonies needs to be carried on british or colonial ships. All commodities produced in the colonies have to be exported to britain. Any european goods demanded by colonies would need to go through britain and be tax in britain before being shipped to the colonies. Export bounties were provided for some colonial goods. Mercantilists did not believe that society would grow rich by allowing people to do what they wanted. They thought free rain would actually make a nation poorer. Mercantilists believed that low wages are required for economic growth. This means that countries will need poor people to grow rich. Cheap labor means cheaper goods which are easier to export. Mercantilists believed that high wages led workers to work fewer hours. Thinking is that workers have a target wage level and once they meet that target level they stop working.
