Tuesday, January 20, 2015

How did the navigation acts help the colonies?

There is some debate about how beneficial the Navigation Acts were for the colonies. A modern example is the American trade war with China. Depending on your view—restrictive free trade or unrestricted free trade—provide context on the benefits of the Navigation Acts.
The Navigation Acts required all goods carried to the colonies be transported on British ships. The British were attempting to limit trade with the colonies to England. The hidden agenda of the British was to develop a substantial commercial fleet of ships that could be converted in wartime to military use. While trying to maintain a competitive advantage was the primary justification for the Navigation Acts the underlying effort to develop a commercial fleet for conversion to military use was a large part of the thinking.
In the beginning, the enforcement of the Navigation Acts was somewhat lax. As long as the American colonies were profitable, as long as the merchant investors were happy, the colonists and the investors looked the other way if British goods were shipped via ships other than the British. And, as is always the case, people will find a way to circumvent a law that is not beneficial to their interests. The ties between America and British trade was steady. Pricing was an issue, but neither party wanted to interrupt the flow of goods and capital investment. In this way, the colonists benefited by the near exclusive commercial relationship with Britain. There was a guarantee of a buyer for both the raw materials shipped by the colonists and the finished products manufactured by the British.
The act itself targeted the Dutch. The Dutch at that time had the best commercial fleet of ships in the world. By restricting goods carried to the colonies on British ships, the price of goods rose. The lack of competition and the near monopoly of shipping allowed the British to charge above market rates for shipping. In this way, the colonists were charged higher prices for goods and in a sense subsidized the British mercantile fleet. The tensions led the colonists to protest, and some historians regard the Navigation Acts as one of the provocations for the American Revolution and call for independence from Britain. In this way, the increased costs and not having access to other markets for American raw materials was not beneficial to the American colonists.
As with many things dealing with issues of trade, some will benefit immensely from the relationship while others will be shut out of the market or subsidize market decisions by paying a higher price due to the lack of competition. The Navigation Act created this kind of trade situation.
http://www.digitalhistory.uh.edu/disp_textbook.cfm?smtID=3&psid=4102

https://www.britannica.com/event/Navigation-Acts

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