How Mercantilism Works

Mother Country

The Mother Country refers to the country that receives the raw materials from their colonies and turns those materials into finished products they then sell for a profit. These are typically the European countries like England, France, Spain, and the Netherlands that had vast colonial empires in the Americas, Africa, and Asia.

Colony A refers to ONE colony belonging to the mother country. Colonies were typically located in the Americas, Africa, or Asia. This colony would supply raw materials for the mother country to turn into manufactured goods. For example, a colony may produce cotton that will then be manufactured into textiles in the mother country

Colony A

Colony belonging to mother country

Colony B, like Colony A will produce raw materias for the mother country as well. The Mother country will restrict trade between Colony A and Colony B in order to make sure both colonies continue to rely on the mother country. For example, imagine the mother country is Spain, Colony A is Cuba, and Colony B is Peru. Cuba is a sugar producer and Peru produces silver. Cuba can send sugar to Spain but not to Peru, and Peru can send silver to Spain but not to Cuba.

Colony B

Colony B belongs to the mother country