Trade
Link between Empire and Trade
- Growth in empire enables a country to grow + develop crucial trade links
- Development of trade links = more investment
- Success of trade-> further colonization encouragement
- Relationships between trade growth + empire is symbiotic
- Growth + development of trade= motivating factor for Britain
- Trade became lifeblood of empire
How Important was government policy in shaping changes to patterns of trade in
years of 1763-1914?
Initial Background: 7 Years War
- 1756-63
- GB + France in open conflict over colonial tension
- Fought on land, sea, Europe
- Britains victory positioned her to become dominant power in world
- Impact
o Gov debt was 157% of GDP in 1763
o Rose to 260% in 1821 due to US war of Independence
o Funding GB navy + paying for European armies was effective but expensive
o Income generated by trade crucial in keeping country afloat
Initial Government policy towards trade
- Protectionism
o Taxes/prohibitions on imports + exports designed to protect domestic producers
o By reducing sale of foreign goods, gov provide advantage to own producers
o No competition -> high prices, high taxes = revolution
- Mercantilism
o Policy to ensure value of exports is more than imports value
o Acquire gold or silver bullion through positive trade balance
- Designed to obtain advantageous trading relationships with colonies whilst protecting GB producers
from competition
- Caused tension + unrest in colonies -> major factor to US war of independence
Shift to Free trade
- Alternative system where import and export taxes minimized to allow merchants to compete across
borders
- Favour merchants who can produce cheapest goods
- Led to GB trade dominance in China, South America etc. , Soon adopted by others
- Led the Scramble for Africa as nations saw countries as potential markets for trade + natural resources
The Adoption of Free Trade
Mercantilism
- Government policy designed to ensure a positive balance of trade (export inc, import decrease)
, - Taxing + tariffs
Protectionism
- Introduction of taxes and tariffs to protect domestic products
Free Trade
- No restrictions so that competition can occur between countries
- No taxes, tariffs => competition => decreasing price => better for people
- Producers sell for more => colonies become wealthy => want to buy more from Britain
Tariff
- Tax imposed on importing goods
Tory
- More traditional fraction within Houses of Parliament, who favored mercantilism and protectionism
Whig
- More progressive faction who Favour electoral reform, abolition of slavery + free trade
Mercantilism Free Trade
- Focus on the best outcome for the - Allows for more competition between each
government other + between nations = strong market
- Only for the government and producers - More wealth for all, universal benefit
benefit, the rich benefit
- Higher prices for goods -> less can afford - Lower prices -> more can buy -> increased
- Quality goods affluence
Ireland
- Due to English landowner pressure = heavy tariffs + regulation on export from Ireland
o Can’t trade silk, glass
o Only give certain goods to GB
o Wool and cloth to anywhere not GB
- Dublin= 2nd largest trading city in Empire
- Ireland getting richer
o - £1.9m exports, £1.5m imports in 1750;
o £4.9m exports, £3.8m imports in 1790 – but tariffs meant this only benefitted the wealthiest
landowners.
- However, armed bands protested for free trades in 1770s
o Lined armed cannons by port to create panic and to threaten ship sinking
- Adam Smith advises gov ‘to protect a very slender interest of our own manufacturers’ the Irish cannot
export glass or silk, woold or cloth to anywhere but GB
- 1779, Ireland granted free trade
- Thriving economy + market
The Protectionist strikes back
- Tories in power from 1783-1830
- After Napoleonic Wars ended in 1815, Tory landowners in parliament passed Corn Laws
o These laws excluded foreign grain from GB markets (mercantilist-step backward)
o Protect GB landowner -> reduce competition -> decrease quality -> soaring prices
Great Reform Act 1832
- Whigs have considerable influence
- Until 1832, parliamentary constituencies had not been changed since Middle Ages
2
Link between Empire and Trade
- Growth in empire enables a country to grow + develop crucial trade links
- Development of trade links = more investment
- Success of trade-> further colonization encouragement
- Relationships between trade growth + empire is symbiotic
- Growth + development of trade= motivating factor for Britain
- Trade became lifeblood of empire
How Important was government policy in shaping changes to patterns of trade in
years of 1763-1914?
Initial Background: 7 Years War
- 1756-63
- GB + France in open conflict over colonial tension
- Fought on land, sea, Europe
- Britains victory positioned her to become dominant power in world
- Impact
o Gov debt was 157% of GDP in 1763
o Rose to 260% in 1821 due to US war of Independence
o Funding GB navy + paying for European armies was effective but expensive
o Income generated by trade crucial in keeping country afloat
Initial Government policy towards trade
- Protectionism
o Taxes/prohibitions on imports + exports designed to protect domestic producers
o By reducing sale of foreign goods, gov provide advantage to own producers
o No competition -> high prices, high taxes = revolution
- Mercantilism
o Policy to ensure value of exports is more than imports value
o Acquire gold or silver bullion through positive trade balance
- Designed to obtain advantageous trading relationships with colonies whilst protecting GB producers
from competition
- Caused tension + unrest in colonies -> major factor to US war of independence
Shift to Free trade
- Alternative system where import and export taxes minimized to allow merchants to compete across
borders
- Favour merchants who can produce cheapest goods
- Led to GB trade dominance in China, South America etc. , Soon adopted by others
- Led the Scramble for Africa as nations saw countries as potential markets for trade + natural resources
The Adoption of Free Trade
Mercantilism
- Government policy designed to ensure a positive balance of trade (export inc, import decrease)
, - Taxing + tariffs
Protectionism
- Introduction of taxes and tariffs to protect domestic products
Free Trade
- No restrictions so that competition can occur between countries
- No taxes, tariffs => competition => decreasing price => better for people
- Producers sell for more => colonies become wealthy => want to buy more from Britain
Tariff
- Tax imposed on importing goods
Tory
- More traditional fraction within Houses of Parliament, who favored mercantilism and protectionism
Whig
- More progressive faction who Favour electoral reform, abolition of slavery + free trade
Mercantilism Free Trade
- Focus on the best outcome for the - Allows for more competition between each
government other + between nations = strong market
- Only for the government and producers - More wealth for all, universal benefit
benefit, the rich benefit
- Higher prices for goods -> less can afford - Lower prices -> more can buy -> increased
- Quality goods affluence
Ireland
- Due to English landowner pressure = heavy tariffs + regulation on export from Ireland
o Can’t trade silk, glass
o Only give certain goods to GB
o Wool and cloth to anywhere not GB
- Dublin= 2nd largest trading city in Empire
- Ireland getting richer
o - £1.9m exports, £1.5m imports in 1750;
o £4.9m exports, £3.8m imports in 1790 – but tariffs meant this only benefitted the wealthiest
landowners.
- However, armed bands protested for free trades in 1770s
o Lined armed cannons by port to create panic and to threaten ship sinking
- Adam Smith advises gov ‘to protect a very slender interest of our own manufacturers’ the Irish cannot
export glass or silk, woold or cloth to anywhere but GB
- 1779, Ireland granted free trade
- Thriving economy + market
The Protectionist strikes back
- Tories in power from 1783-1830
- After Napoleonic Wars ended in 1815, Tory landowners in parliament passed Corn Laws
o These laws excluded foreign grain from GB markets (mercantilist-step backward)
o Protect GB landowner -> reduce competition -> decrease quality -> soaring prices
Great Reform Act 1832
- Whigs have considerable influence
- Until 1832, parliamentary constituencies had not been changed since Middle Ages
2
