Navigation Acts
Encyclopedia
The English Navigation Acts were a series of law
s that restricted the use of foreign shipping for trade between England (after 1707 Great Britain
) and its colonies, a process which had started in 1651. Their goal was to force colonial development into lines favorable to England, and stop direct colonial trade with the Netherlands, France and other European countries. The original ordinance of 1651 was renewed at the Restoration by Acts of 1660 and 1663, and subsequently subject to minor amendment. These Acts also formed the basis for British overseas trade for nearly 200 years.
On the whole, the Acts of Trade and Navigation were obeyed, except for the Molasses Act of 1733, which led to extensive smuggling because no effective means of enforcement was provided until the 1750s. Irritation with stricter enforcement under the Sugar Act
of 1764 became one source of resentment by merchants in the American colonies against Great Britain, helping cause the American Revolution
.
The major impetuses for the Navigation Acts were the ruinous deterioration of English trade in the aftermath of the Eighty Years' War, and the concomitant lifting of the Spanish trade-embargoes on trade between the Spanish Empire
and the Dutch Republic
. The end of the embargoes in 1647 unleashed the full power of the Amsterdam Entrepôt
and other Dutch competitive advantages in world trade. Within a few years, English merchants had practically been overwhelmed in the trade on the Iberian Peninsula, the Mediterranean and the Levant
. Even the trade with English colonies (partly still in the hands of the royalists, as the English Civil War
was in its final stages and the Commonwealth of England
had not yet imposed its authority throughout the English colonies) was "engrossed" by Dutch merchants. English direct trade was crowded out by a sudden influx of commodities from the Levant, Mediterranean and the Spanish and Portuguese empires, and the West Indies
via the Dutch Entrepôt, carried in Dutch bottoms and for Dutch account.
The obvious solution seemed to be to seal off the English and Scottish markets to these unwanted imports. The precedent was the Act the Greenland Company had obtained from Parliament in 1645 prohibiting the import of whale products into England, except in ships owned by that company. This principle was now generalized. In 1648 the Levant Company
petitioned Parliament for the prohibition of imports of Turkish goods "...from Holland and other places but directly from the places of their growth." Baltic traders added their voices to this chorus. In 1650 the Standing Council for Trade and the Council of State of the Commonwealth prepared a general policy designed to impede the flow of Mediterranean and colonial commodities via Holland and Zeeland
into England.
led by Oliver Cromwell
, reinforcing a longstanding principle of government policy that English trade should be carried in English vessels. It was reaction to the failure of an English diplomatic mission to The Hague
seeking a joining of the Commonwealth by the Republic of the Seven United Netherlands, after the States of Holland
had made some cautious overtures to Cromwell to counter the monarchal aspirations of stadtholder
William II of Orange. The stadtholder had suddenly died however and the States were now embarrassed by Cromwell taking the idea quite too seriously. The English proposed the joint conquest of all remaining Spanish and Portuguese possessions. England would take America and the Dutch Africa and Asia. As the Dutch, however, had just ended their war with Spain and already taken over most Portuguese colonies in Asia, they saw little advantage in this grandiose scheme and proposed a free trade agreement as an alternative to a full political union. This again was unacceptable to the British, who would be unable to compete on such a level playing field, and was seen by them as a deliberate affront.
Banned foreign ships from transporting goods from outside Europe
to England or its colonies and banned third party countries' ships from transporting goods from a country elsewhere in Europe to England. These rules specifically targeted the Dutch
who controlled a large section of Europe's international trade and even much of England's coastal shipping. It excluded the Dutch from essentially all trade with England, as the Dutch economy was competitive, not complementary with the English, and the two countries therefore exchanged few commodities. This Anglo-Dutch trade, however, constituted only a small fraction of total Dutch trade flows. The Act is often mentioned as a major cause of the First Anglo-Dutch War
, though it was only part of a larger British policy to engage in war after the negotiations had failed. The English naval victories in 1653 (the Battle of Portland
, the Battle of the Gabbard
and the Battle of Scheveningen
) showed the supremacy of the Commonwealth navy in home waters. However, farther afield the Dutch predominated and were able to close down English commerce in the Baltic and the Mediterranean. Both countries held each other in a stifling embrace.
The Treaty of Westminster (1654)
ended the impasse. The Dutch acknowledged the Act in this peace, but it seems to have had very little influence on their trade. England the Act offered only limited solace. It could not limit the deterioration of England's overseas trading position, except in the cases where England herself was the principal consumer, like the Canaries'
wine trade and the trade in Puglian olive oil. In the trade with the West Indies the Dutch kept up a flourishing "smuggling" trade, thanks to the preference of English planters for Dutch import goods and the better deal the Dutch offered in the sugar trade. The Dutch colony of New Netherland
offered a loophole (through intercolonial trade) wide enough to drive a shipload of Virginian tobacco through.
, having been passed by 'usurping powers'. Parliament therefore passed new legislation. This is generally referred to as the "Navigation Acts", and (with some amendments) remained in force for nearly two centuries.
The Navigation Act 1660 (passed on 13 September) added a twist to Oliver Cromwell's act: ships' crews had to be three-quarters English, and "enumerated" products not produced by the mother country, such as tobacco, cotton, and sugar were to be shipped from the colonies only to England or other English colonies. Ship captains were required to post a bond
to ensure compliance and could recoup the funds upon arrival.
The Navigation Act 1663 (also called the Act for the Encouragement of Trade, passed on 27 July) required all European goods bound for America (or other colonies) to be shipped through England first. In England, the goods would be unloaded, inspected, paid duties, and reloaded. The trade had to be carried in English bottoms (i.e. vessels), which included those of its colonies. Furthermore, imports of 'enumerated commodities' (such as sugar, rice, and tobacco) had to be landed and pay tax before going on to other countries. This increased the cost to the colonies, and increased the shipping time. "England" here includes Wales, though it was little involved in trade to distant parts. After the Act of Union 1707, Scotland enjoyed the same privileges.
This Act entitled colonial shipping and seamen to enjoy the full benefits of the exclusive provisions. There was no bar put in the way of colonists who might wish to trade in their own shipping with foreign plantations or European countries other than England, provided they did not violate the enumerated commodity clause.
"English bottoms" included vessels built in English plantations (i.e. colonies), for example in America.
Further Navigation Acts were passed in 1673 and 1696 to close a loophole and to strengthen enforcement, respectively.
The Acts were in full force for a short time only. After the Second Anglo-Dutch War
, which ended disastrously for England, the Dutch obtained the right to ship commodities produced in their German hinterland
to England as if these were Dutch goods. Even more importantly, England conceded the principle of "free ship, free good" which provided freedom of molestation by the Royal Navy
of Dutch shipping on the high seas, even in wars in which the Dutch Republic was neutral. This more or less gave the Dutch freedom to conduct their "smuggling" unhindered as long as they were not caught red-handed in territorial waters controlled by England. These provisions were reconfirmed in the Treaty of Westminster (1674)
after the Third Anglo-Dutch War
.
to the American colonies, forcing the colonists to buy the more expensive sugar from the British West Indies
instead. The law was widely flouted, but efforts by the British to prevent smuggling created hostility and contributed to the American Revolution
. The Molasses Act was the first of the Sugar Acts. The act was set to expire in 1763, and in 1764 was renewed as the Sugar Act
, which caused unrest with the colonists.
philosophy. The Navigation Acts were passed under the economic theory of mercantilism
under which wealth was to be increased by restricting trade to colonies rather than with free trade
. By 1849 "a central part of British capital's import strategy was to reduce the cost of food through cheap foreign imports and in this way to reduce the cost of maintaining labour power"(van Houten). Repealing the Navigation Acts along with the Corn Laws
served this purpose, but also led to the breakup of the formal British Empire.
cities. The maintenance of a certain level of merchant shipping and of trade generally also facilitated a rapid increase in the size and quality of the Royal Navy
, which eventually (after the Anglo-Dutch Alliance of 1689 limited the Dutch navy to three-fifths of the size of the English one) led to Britain becoming a global superpower
until the mid 20th Century. That naval might, however, never was sufficient to limit Dutch trading power. The reason was that the Dutch trading system rested on such a degree of leverage over overseas markets and shipping resources, combined with a financial power that was only overtaken by Great Britain during the 18th century (after the Glorious Revolution
), that it enabled the Dutch to put sufficient pressure on the English to prevent them from sustaining naval campaigns of sufficient length to wrest maritime concessions from the Dutch.
. The Navigation Acts required all of a colony's imports to be either bought from England or resold by English merchants in England, no matter what price could be obtained elsewhere.
Historian Robert Thomas (1965) argues that the impact of the acts on the economies of the 13 American colonies
was minimal; the cost was about ₤4 per ₤1000 of income per year. The average personal income was about ₤100 per year. However Ransom (1968) says that the magnitude of the net burden imposed by the Acts was small, yet their overall impact on the shape and growth rate economy was significant. That was because the Acts differentially affected different groups, helping some and hurting others. Walton concludes that the political friction caused by the Acts was more serious than the negative economic impact, especially since the merchants most affected were politically most active. Sawers (1992) points out that the political issue is what would have been the future impact of the Acts after 1776 as the colonial economy matured and was blocked by the Acts from serious competition with British manufacturers.
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
s that restricted the use of foreign shipping for trade between England (after 1707 Great Britain
Kingdom of Great Britain
The former Kingdom of Great Britain, sometimes described as the 'United Kingdom of Great Britain', That the Two Kingdoms of Scotland and England, shall upon the 1st May next ensuing the date hereof, and forever after, be United into One Kingdom by the Name of GREAT BRITAIN. was a sovereign...
) and its colonies, a process which had started in 1651. Their goal was to force colonial development into lines favorable to England, and stop direct colonial trade with the Netherlands, France and other European countries. The original ordinance of 1651 was renewed at the Restoration by Acts of 1660 and 1663, and subsequently subject to minor amendment. These Acts also formed the basis for British overseas trade for nearly 200 years.
On the whole, the Acts of Trade and Navigation were obeyed, except for the Molasses Act of 1733, which led to extensive smuggling because no effective means of enforcement was provided until the 1750s. Irritation with stricter enforcement under the Sugar Act
Sugar Act
The Sugar Act, also known as the American Revenue Act or the American Duties Act, was a revenue-raising act passed by the Parliament of Great Britain on April 5, 1764. The preamble to the act stated: "it is expedient that new provisions and regulations should be established for improving the...
of 1764 became one source of resentment by merchants in the American colonies against Great Britain, helping cause the American Revolution
American Revolution
The American Revolution was the political upheaval during the last half of the 18th century in which thirteen colonies in North America joined together to break free from the British Empire, combining to become the United States of America...
.
The major impetuses for the Navigation Acts were the ruinous deterioration of English trade in the aftermath of the Eighty Years' War, and the concomitant lifting of the Spanish trade-embargoes on trade between the Spanish Empire
Spanish Empire
The Spanish Empire comprised territories and colonies administered directly by Spain in Europe, in America, Africa, Asia and Oceania. It originated during the Age of Exploration and was therefore one of the first global empires. At the time of Habsburgs, Spain reached the peak of its world power....
and the Dutch Republic
Dutch Republic
The Dutch Republic — officially known as the Republic of the Seven United Netherlands , the Republic of the United Netherlands, or the Republic of the Seven United Provinces — was a republic in Europe existing from 1581 to 1795, preceding the Batavian Republic and ultimately...
. The end of the embargoes in 1647 unleashed the full power of the Amsterdam Entrepôt
Amsterdam Entrepôt
The Amsterdam Entrepôt is the short-hand term that English-language economic historiographers use to refer to the trade system that helped the Dutch Republic achieve primacy in world trade during the 17th century.-The entrepôt system:...
and other Dutch competitive advantages in world trade. Within a few years, English merchants had practically been overwhelmed in the trade on the Iberian Peninsula, the Mediterranean and the Levant
Levant
The Levant or ) is the geographic region and culture zone of the "eastern Mediterranean littoral between Anatolia and Egypt" . The Levant includes most of modern Lebanon, Syria, Jordan, Israel, the Palestinian territories, and sometimes parts of Turkey and Iraq, and corresponds roughly to the...
. Even the trade with English colonies (partly still in the hands of the royalists, as the English Civil War
English Civil War
The English Civil War was a series of armed conflicts and political machinations between Parliamentarians and Royalists...
was in its final stages and the Commonwealth of England
Commonwealth of England
The Commonwealth of England was the republic which ruled first England, and then Ireland and Scotland from 1649 to 1660. Between 1653–1659 it was known as the Commonwealth of England, Scotland and Ireland...
had not yet imposed its authority throughout the English colonies) was "engrossed" by Dutch merchants. English direct trade was crowded out by a sudden influx of commodities from the Levant, Mediterranean and the Spanish and Portuguese empires, and the West Indies
British West Indies
The British West Indies was a term used to describe the islands in and around the Caribbean that were part of the British Empire The term was sometimes used to include British Honduras and British Guiana, even though these territories are not geographically part of the Caribbean...
via the Dutch Entrepôt, carried in Dutch bottoms and for Dutch account.
The obvious solution seemed to be to seal off the English and Scottish markets to these unwanted imports. The precedent was the Act the Greenland Company had obtained from Parliament in 1645 prohibiting the import of whale products into England, except in ships owned by that company. This principle was now generalized. In 1648 the Levant Company
Levant Company
The Levant Company, or Turkey Company, was an English chartered company formed in 1581, to regulate English trade with Turkey and the Levant...
petitioned Parliament for the prohibition of imports of Turkish goods "...from Holland and other places but directly from the places of their growth." Baltic traders added their voices to this chorus. In 1650 the Standing Council for Trade and the Council of State of the Commonwealth prepared a general policy designed to impede the flow of Mediterranean and colonial commodities via Holland and Zeeland
Zeeland
Zeeland , also called Zealand in English, is the westernmost province of the Netherlands. The province, located in the south-west of the country, consists of a number of islands and a strip bordering Belgium. Its capital is Middelburg. With a population of about 380,000, its area is about...
into England.
Navigation Ordinance 1651
The Navigation Act bill was passed in October 1651 by the Parliament of the Commonwealth of EnglandCommonwealth of England
The Commonwealth of England was the republic which ruled first England, and then Ireland and Scotland from 1649 to 1660. Between 1653–1659 it was known as the Commonwealth of England, Scotland and Ireland...
led by Oliver Cromwell
Oliver Cromwell
Oliver Cromwell was an English military and political leader who overthrew the English monarchy and temporarily turned England into a republican Commonwealth, and served as Lord Protector of England, Scotland, and Ireland....
, reinforcing a longstanding principle of government policy that English trade should be carried in English vessels. It was reaction to the failure of an English diplomatic mission to The Hague
The Hague
The Hague is the capital city of the province of South Holland in the Netherlands. With a population of 500,000 inhabitants , it is the third largest city of the Netherlands, after Amsterdam and Rotterdam...
seeking a joining of the Commonwealth by the Republic of the Seven United Netherlands, after the States of Holland
States of Holland
The States of Holland and West Frisia were the representation of the two Estates to the court of the Count of Holland...
had made some cautious overtures to Cromwell to counter the monarchal aspirations of stadtholder
Stadtholder
A Stadtholder A Stadtholder A Stadtholder (Dutch: stadhouder [], "steward" or "lieutenant", literally place holder, holding someones place, possibly a calque of German Statthalter, French lieutenant, or Middle Latin locum tenens...
William II of Orange. The stadtholder had suddenly died however and the States were now embarrassed by Cromwell taking the idea quite too seriously. The English proposed the joint conquest of all remaining Spanish and Portuguese possessions. England would take America and the Dutch Africa and Asia. As the Dutch, however, had just ended their war with Spain and already taken over most Portuguese colonies in Asia, they saw little advantage in this grandiose scheme and proposed a free trade agreement as an alternative to a full political union. This again was unacceptable to the British, who would be unable to compete on such a level playing field, and was seen by them as a deliberate affront.
Banned foreign ships from transporting goods from outside Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
to England or its colonies and banned third party countries' ships from transporting goods from a country elsewhere in Europe to England. These rules specifically targeted the Dutch
Dutch Republic
The Dutch Republic — officially known as the Republic of the Seven United Netherlands , the Republic of the United Netherlands, or the Republic of the Seven United Provinces — was a republic in Europe existing from 1581 to 1795, preceding the Batavian Republic and ultimately...
who controlled a large section of Europe's international trade and even much of England's coastal shipping. It excluded the Dutch from essentially all trade with England, as the Dutch economy was competitive, not complementary with the English, and the two countries therefore exchanged few commodities. This Anglo-Dutch trade, however, constituted only a small fraction of total Dutch trade flows. The Act is often mentioned as a major cause of the First Anglo-Dutch War
First Anglo-Dutch War
The First Anglo–Dutch War was the first of the four Anglo–Dutch Wars. It was fought entirely at sea between the navies of the Commonwealth of England and the United Provinces of the Netherlands. Caused by disputes over trade, the war began with English attacks on Dutch merchant shipping, but...
, though it was only part of a larger British policy to engage in war after the negotiations had failed. The English naval victories in 1653 (the Battle of Portland
Battle of Portland
The naval Battle of Portland, or Three Days' Battle took place during 28 February-2 March 1653 , during the First Anglo-Dutch War, when the fleet of the Commonwealth of England under General at Sea Robert Blake was attacked by a fleet of the Dutch Republic under Lieutenant-Admiral Maarten Tromp...
, the Battle of the Gabbard
Battle of the Gabbard
The naval Battle of the Gabbard, also known as the Battle of Gabbard Bank, the Battle of the North Foreland or the second Battle of Nieuwpoort took place on 2–3 June 1653 according to the Old Style of Julian calendar then used in England during the First Anglo-Dutch War near the Gabbard...
and the Battle of Scheveningen
Battle of Scheveningen
The Battle of Scheveningen was the final naval battle of the First Anglo-Dutch War...
) showed the supremacy of the Commonwealth navy in home waters. However, farther afield the Dutch predominated and were able to close down English commerce in the Baltic and the Mediterranean. Both countries held each other in a stifling embrace.
The Treaty of Westminster (1654)
Treaty of Westminster (1654)
The Treaty of Westminster was signed on 8 May 1654, which ended the First Anglo-Dutch War . Based on the terms of the accord, the United Provinces recognized Oliver Cromwell's Navigation Acts, which required that imports to the Commonwealth of England must be carried in English ships, or ships from...
ended the impasse. The Dutch acknowledged the Act in this peace, but it seems to have had very little influence on their trade. England the Act offered only limited solace. It could not limit the deterioration of England's overseas trading position, except in the cases where England herself was the principal consumer, like the Canaries'
Canary Islands
The Canary Islands , also known as the Canaries , is a Spanish archipelago located just off the northwest coast of mainland Africa, 100 km west of the border between Morocco and the Western Sahara. The Canaries are a Spanish autonomous community and an outermost region of the European Union...
wine trade and the trade in Puglian olive oil. In the trade with the West Indies the Dutch kept up a flourishing "smuggling" trade, thanks to the preference of English planters for Dutch import goods and the better deal the Dutch offered in the sugar trade. The Dutch colony of New Netherland
New Netherland
New Netherland, or Nieuw-Nederland in Dutch, was the 17th-century colonial province of the Republic of the Seven United Netherlands on the East Coast of North America. The claimed territories were the lands from the Delmarva Peninsula to extreme southwestern Cape Cod...
offered a loophole (through intercolonial trade) wide enough to drive a shipload of Virginian tobacco through.
The Navigation Acts
The 1651 Act (like other legislation of the Commonwealth period) was declared void on The Restoration of Charles IICharles II of England
Charles II was monarch of the three kingdoms of England, Scotland, and Ireland.Charles II's father, King Charles I, was executed at Whitehall on 30 January 1649, at the climax of the English Civil War...
, having been passed by 'usurping powers'. Parliament therefore passed new legislation. This is generally referred to as the "Navigation Acts", and (with some amendments) remained in force for nearly two centuries.
The Navigation Act 1660 (passed on 13 September) added a twist to Oliver Cromwell's act: ships' crews had to be three-quarters English, and "enumerated" products not produced by the mother country, such as tobacco, cotton, and sugar were to be shipped from the colonies only to England or other English colonies. Ship captains were required to post a bond
Performance bond
A performance bond is a surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor.A job requiring a payment & performance bond will usually require a bid bond, to bid the job...
to ensure compliance and could recoup the funds upon arrival.
The Navigation Act 1663 (also called the Act for the Encouragement of Trade, passed on 27 July) required all European goods bound for America (or other colonies) to be shipped through England first. In England, the goods would be unloaded, inspected, paid duties, and reloaded. The trade had to be carried in English bottoms (i.e. vessels), which included those of its colonies. Furthermore, imports of 'enumerated commodities' (such as sugar, rice, and tobacco) had to be landed and pay tax before going on to other countries. This increased the cost to the colonies, and increased the shipping time. "England" here includes Wales, though it was little involved in trade to distant parts. After the Act of Union 1707, Scotland enjoyed the same privileges.
This Act entitled colonial shipping and seamen to enjoy the full benefits of the exclusive provisions. There was no bar put in the way of colonists who might wish to trade in their own shipping with foreign plantations or European countries other than England, provided they did not violate the enumerated commodity clause.
"English bottoms" included vessels built in English plantations (i.e. colonies), for example in America.
Further Navigation Acts were passed in 1673 and 1696 to close a loophole and to strengthen enforcement, respectively.
The Acts were in full force for a short time only. After the Second Anglo-Dutch War
Second Anglo-Dutch War
The Second Anglo–Dutch War was part of a series of four Anglo–Dutch Wars fought between the English and the Dutch in the 17th and 18th centuries for control over the seas and trade routes....
, which ended disastrously for England, the Dutch obtained the right to ship commodities produced in their German hinterland
Hinterland
The hinterland is the land or district behind a coast or the shoreline of a river. Specifically, by the doctrine of the hinterland, the word is applied to the inland region lying behind a port, claimed by the state that owns the coast. The area from which products are delivered to a port for...
to England as if these were Dutch goods. Even more importantly, England conceded the principle of "free ship, free good" which provided freedom of molestation by the Royal Navy
Royal Navy
The Royal Navy is the naval warfare service branch of the British Armed Forces. Founded in the 16th century, it is the oldest service branch and is known as the Senior Service...
of Dutch shipping on the high seas, even in wars in which the Dutch Republic was neutral. This more or less gave the Dutch freedom to conduct their "smuggling" unhindered as long as they were not caught red-handed in territorial waters controlled by England. These provisions were reconfirmed in the Treaty of Westminster (1674)
Treaty of Westminster (1674)
The Treaty of Westminster of 1674 was the peace treaty that ended the Third Anglo-Dutch War. Signed by the Netherlands and England, it provided for the return of the colony of New Netherland to England and renewed the Treaty of Breda of 1667...
after the Third Anglo-Dutch War
Third Anglo-Dutch War
The Third Anglo–Dutch War or Third Dutch War was a military conflict between England and the Dutch Republic lasting from 1672 to 1674. It was part of the larger Franco-Dutch War...
.
Molasses Act 1733
The 1733 Molasses Act levied heavy duties on the trade of sugar from the French West IndiesFrench West Indies
The term French West Indies or French Antilles refers to the seven territories currently under French sovereignty in the Antilles islands of the Caribbean: the two overseas departments of Guadeloupe and Martinique, the two overseas collectivities of Saint Martin and Saint Barthélemy, plus...
to the American colonies, forcing the colonists to buy the more expensive sugar from the British West Indies
British West Indies
The British West Indies was a term used to describe the islands in and around the Caribbean that were part of the British Empire The term was sometimes used to include British Honduras and British Guiana, even though these territories are not geographically part of the Caribbean...
instead. The law was widely flouted, but efforts by the British to prevent smuggling created hostility and contributed to the American Revolution
American Revolution
The American Revolution was the political upheaval during the last half of the 18th century in which thirteen colonies in North America joined together to break free from the British Empire, combining to become the United States of America...
. The Molasses Act was the first of the Sugar Acts. The act was set to expire in 1763, and in 1764 was renewed as the Sugar Act
Sugar Act
The Sugar Act, also known as the American Revenue Act or the American Duties Act, was a revenue-raising act passed by the Parliament of Great Britain on April 5, 1764. The preamble to the act stated: "it is expedient that new provisions and regulations should be established for improving the...
, which caused unrest with the colonists.
Repeal
The Navigation Acts were repealed in 1849 under the influence of a laissez-faireLaissez-faire
In economics, laissez-faire describes an environment in which transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies....
philosophy. The Navigation Acts were passed under the economic theory of mercantilism
Mercantilism
Mercantilism is the economic doctrine in which government control of foreign trade is of paramount importance for ensuring the prosperity and security of the state. In particular, it demands a positive balance of trade. Mercantilism dominated Western European economic policy and discourse from...
under which wealth was to be increased by restricting trade to colonies rather than with free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...
. By 1849 "a central part of British capital's import strategy was to reduce the cost of food through cheap foreign imports and in this way to reduce the cost of maintaining labour power"(van Houten). Repealing the Navigation Acts along with the Corn Laws
Corn Laws
The Corn Laws were trade barriers designed to protect cereal producers in the United Kingdom of Great Britain and Ireland against competition from less expensive foreign imports between 1815 and 1846. The barriers were introduced by the Importation Act 1815 and repealed by the Importation Act 1846...
served this purpose, but also led to the breakup of the formal British Empire.
Effects on Britain
The introduction of the legislation caused Britain's shipping industry to develop in isolation. However, it had the advantage to English shippers of severely limiting the ability of Dutch ships to participate in the carrying trade to England. The Navigation Acts, by reserving British colonial trade to British shipping, may have significantly assisted in the growth of London as a major entrepôt for American colonial wares at the expense of DutchNetherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
cities. The maintenance of a certain level of merchant shipping and of trade generally also facilitated a rapid increase in the size and quality of the Royal Navy
Royal Navy
The Royal Navy is the naval warfare service branch of the British Armed Forces. Founded in the 16th century, it is the oldest service branch and is known as the Senior Service...
, which eventually (after the Anglo-Dutch Alliance of 1689 limited the Dutch navy to three-fifths of the size of the English one) led to Britain becoming a global superpower
Superpower
A superpower is a state with a dominant position in the international system which has the ability to influence events and its own interests and project power on a worldwide scale to protect those interests...
until the mid 20th Century. That naval might, however, never was sufficient to limit Dutch trading power. The reason was that the Dutch trading system rested on such a degree of leverage over overseas markets and shipping resources, combined with a financial power that was only overtaken by Great Britain during the 18th century (after the Glorious Revolution
Glorious Revolution
The Glorious Revolution, also called the Revolution of 1688, is the overthrow of King James II of England by a union of English Parliamentarians with the Dutch stadtholder William III of Orange-Nassau...
), that it enabled the Dutch to put sufficient pressure on the English to prevent them from sustaining naval campaigns of sufficient length to wrest maritime concessions from the Dutch.
Effects on American colonies
The Navigation Acts, while enriching Britain, caused resentment in the colonies and contributed to the American RevolutionAmerican Revolution
The American Revolution was the political upheaval during the last half of the 18th century in which thirteen colonies in North America joined together to break free from the British Empire, combining to become the United States of America...
. The Navigation Acts required all of a colony's imports to be either bought from England or resold by English merchants in England, no matter what price could be obtained elsewhere.
Historian Robert Thomas (1965) argues that the impact of the acts on the economies of the 13 American colonies
Thirteen Colonies
The Thirteen Colonies were English and later British colonies established on the Atlantic coast of North America between 1607 and 1733. They declared their independence in the American Revolution and formed the United States of America...
was minimal; the cost was about ₤4 per ₤1000 of income per year. The average personal income was about ₤100 per year. However Ransom (1968) says that the magnitude of the net burden imposed by the Acts was small, yet their overall impact on the shape and growth rate economy was significant. That was because the Acts differentially affected different groups, helping some and hurting others. Walton concludes that the political friction caused by the Acts was more serious than the negative economic impact, especially since the merchants most affected were politically most active. Sawers (1992) points out that the political issue is what would have been the future impact of the Acts after 1776 as the colonial economy matured and was blocked by the Acts from serious competition with British manufacturers.