Nature's Evil

In the era of mercenary armies, it was probably true that gold would help in the event of a war or other crisis. Even though wars were financed by loans rather than by the Treasury, the interest did depend on the gold reserves. In order to accumulate gold, the Treasury needed a positive trade balance, with exports exceeding imports. Every single exchange was a transaction between private individuals, but a highly placed regulator – in England, it was Parliament – could control the balance of trade by restraining internal consumption, checking imports and incentivising exports. Colonies should not compete with the mother country but benefit her by providing raw materials, absorbing her excess population and buying her goods. The volume of world trade was considered finite: what went to one competitor left another empty-handed. As the turnover in these exchanges increased, the tax base of the empire also increased. More gold ended up in the Treasury.

External partners were unreliable: trade with them was at risk from wars, diplomatic failures and arbitrary tariffs. The more England depended on its own colonies and the less it relied on trade with other empires, the better. Under mercantilist law, all exchanges with the colonies had to go through the mother country; English colonies were discouraged or banned from exchange among themselves. All this was connected with a growing faith in the power of the state. A private merchant was like a sailor steering a sailing ship, but only the sovereign, the captain of the ship, could determine the course of this gigantic machine. The Navigation Acts, which were passed by Parliament in 1651 and remained in force for nearly 200 years, banned foreign ships from carrying commodities from English colonies and permitted the colonies to trade their raw materials exclusively via English ports. Creating a transport cartel, the Navigation Acts caused the prices of colonial commodities to rise. As a result, sugar from the French colonies was much cheaper than British sugar, which enabled the French to capture most of the European market. British industry suffered from the Navigation Acts, but the merchant fleet and shipowners benefited from them, prompting Adam Smith to write that power over the world belonged not to the producers of commodities but to their carriers.

The historian Klaus Knorr outlined the arguments in support of the colonies expressed in Parliament and in the press: they were needed for the conversion of savages; without colonies sailors wouldn’t get training; the empire needed deposits of gold and silver; the metropole needed to get rid of its surplus population; and, finally, colonies increased the state’s revenue. 1 The most frequent argument in favour of colonies was that their raw materials were vital for the British economy. British imports during this period included four categories: ships’ rigging and other ‘marine supplies’ and potash from Russia and the Baltic lands; salt, wine, dried fruits, silk, sugar and tobacco from Southern Europe; spices, cloth and dyes from the Far East; and dried or pickled fish from the Atlantic. Some of these goods were luxury items, and these imports could be stopped if necessary. Others were vital for England, though attempts were made to find substitutes from British colonies. Around 1700, Parliament was constantly discussing the fact that England’s enemies controlled the supply of vitally important raw materials. In case of war, such dependence could have fatal consequences. For example, Sir Gilbert Heathcote said in the House of Lords in 1721: ‘while we fetch’d our naval Stores from Russia, it was in the Power of the Czar, not only to set what Price he pleas’d upon them, but even to prevent our having them at all.’ 2 The politicians hoped that extracting raw materials from the colonies would solve this problem. America was thought of by analogy with India: the English needed to establish trading stations there, and the ‘Red Indians’ would supply pelts, hemp, fish, timber and other necessities in exchange for the products of British industry.