NARRATOR: In the 17th and 18th centuries, European nations gauged their wealth by the amount of silver and gold in their treasuries. To fill its coffers, England incorporated its colonies into a system of mercantilism. Under this system, colonial ships carried raw materials to the English, who would then transform these materials into manufactured goods. English traders would then sell these goods back to the colonies and to other European nations.
Professor KAREN ORDAHL KUPPERMAN (New York University): Ideally, the colonies should provide raw materials and should consume manufactured goods. So you have this kind of closed circuit, of raw materials coming into England, feeding into English industry. Then the products of English industry coming back to the colonists, and the colonists buying them.
NARRATOR: To ensure that the money leaving English colonies flowed to the English treasury, England restricted colonial trade with foreign powers and sometimes banned it completely. Though most colonists tolerated mercantilism in the 1600s, this economic system eventually provoked smuggling and ultimately led to violent conflict between the colonies and the crown within the next century.