It is useful to recall that until the beginning of the American Revolution (and even for a time after) many or most Americans were loyal subjects of their royal majesties, the kings and queens listed below. One of the great paradoxes of western history is that while these British monarchs were not always everything their subjects wished them to be, they ruled reasonably well, and their subjects were among the freest and best governed in the world. Thus it is interesting that the first modern revolution of any size took place in the least likely country on Earth.

The System of Government

Virginia led the way in the establishment of a governance system that eventually applied to all the North American colonies. Charles I formally granted the Virginia colony the right to have an assembly in 1639, though one had been functioning off and on since 1619. The court system developed more slowly, and it was not really until the U.S. Supreme Court was created by the Constitution that the governmental triad (executive, legislature, courts) moved toward the co-equal circumstances which we now take for granted. All the colonies eventually developed the political apparatus Shown below:

Governor

• Governors were appointed by King, but were dependent upon the goodwill of colonists for pay, support, friendship, etc.
• Most were sensitive to the needs of the colonists—they had great power, but were in the middle and their authority tended to be undermined from both sides: responsibility to the king could clash with loyalty to the colonists.
• Power over various judicial officers, sheriffs, etc., all royal agents who tended to support the crown.
• Although some governed well, in all the colonial governors were not an impressive lot. They were subject to the will of the Crown, but had few resources with which to enforce the mandates they received.

Colonial Legislatures

• Colonial assemblies could pass laws, which had to be signed by the governor and sent to the King for approval. It could be a time-consuming process, and colonists learned how to take advantage of loopholes in the system.
• As a result, the colonists got in the habit of doing things their own way—often as a result of royal neglect; many members served for a long time, and the process of selecting assemblymen men was not always very democratic.
• The monarchs overturned about 5% of colonial legislation—not much, but it was a constant irritant. Often vetoed laws would be immediately re-passed in slightly different form, and the whole process would begin again.
• Theoretically the legislatures did not have much power, but they dominated nearly every colony. The were not "local parliaments," but the colonists began to see them as such. As we get closer to the revolution, tension between the colonies and Parliament will grow.

The English Side: The Royal "Privy Council" and the Board of Trade

• Until 1696 the principal body that dealt with colonial affairs was the royal "Privy Council," private advisors to the King. They reviewed legislation and acted as a court of appeal.
• The Privy Council evolved into the "Lords of Trade" under William III, who were responsible for formulating colonial policy (ad hoc).
• The Navigation Act of 1696 provided for the Lords of Trade and Plantations, which became known as the "Board of Trade."

Since the colonial assemblies were quasi democratic (in the colonies most white males could vote) officials could not act without reference to public opinion. The assemblies held the purse strings of the government, and the governor could not rule without reference to their wishes.

Note: England never developed an effective, centralized government system for colonies.

The British Imperial Economic System: Mercantilism—or "State Capitalism"

(Note: The term "state capitalism" may in other areas of economic theory have a meaning different from what is described here: all that is implied for this portion of this course is that Mercantilism was essentially a capitalist system in which the mechanisms of trade were heavily controlled by the state rather than by market forces. Adam Smith's The Wealth of Nations," published in 1776—a very interesting date in this context—was an argument against Mercantilism and in favor of free-market capitalism.)

Mercantilism was a system by which the government deliberately controlled the economic affairs of the state in order to accumulate national wealth. The ultimate purpose of mercantile policy was to enhance national strength, provide self-sufficiency, and pay for military power. Mercantile theory came to include the notion that no nation could be great without colonies as sources of markets and raw materials. The British became especially dependent upon their colonial empire.

International economics were seen as a zero sum game—at any given moment only a finite amount of wealth exists in the world; therefore, the only way for a nation to increase its wealth is to fight for bigger share. If one pictures all the wealth in the world or within a group of nations as a large pie chart, and acknowledges that while the whole pie may get larger, thereby increasing everyone's wealth, those changes are likely to be at best only incremental, at least in the short term. To rapidly increase one's wealth in the immediate future, one must accumulate new wealth at the expense of someone else.

Principles of Mercantilism

• "A favorable Balance of Trade" is the major goal—more exports than imports to bring wealth to the home nation.
• Nations should concentrate on producing marketable goods—cash products. (Adam Smith advocates national specialization in "The Wealth of Nations.")
• Nations should limit the importation of goods and services as much as possible so as to prevent the exporting of gold.
• It is necessary to accumulate silver and gold as bulwarks of national wealth and power.
• All the major nations were mercantilist; each European nation practiced some form of Mercantilism. Spain tried to control metals, France regulated internal trade, the Dutch controlled external trade, etc.

Great Britain had four major aims in its mercantile policy:

• Encourage growth of a native merchant marine fleet (which would include colonial ships.)
• Protect English manufacturers from foreign competition.
• Protect English agriculture, especially grain farmers.
• Accumulate as much hard money as possible. (Americans had to pay for everything with hard currency, which drained gold from America. Colonial paper was not legal tender in England.)

NOTE: The American colonies were a small part of a worldwide system. While the American occasionally chafed under the restrictions placed upon them, they rarely doubted that they benefited from being part of the Empire, with all its protections.

THE NAVIGATION ACTS:

Note: The Colonists had no objection to the Navigation Acts in theory, as they were not directed against colonies, but against Britain's competitors, and seen not so much as taxation as regulation. Still, the American's avoided paying duties whenever they could get away with it, which in fact was most of the time. It was too expensive for the British to try to collect duties in lightly populated America.

Although the colonists did not object in theory to these acts, they went out of their way to avoid the consequences of them by refusing to pay duties, smuggling, etc. Colonial governors could enforce these acts only with difficulty, and even though various levels of authority were granted to naval officers, enforcement was expensive and in the end impractical. Although the seed of revolution do no begin to take hold firmly until the 1760s, tension grows between colonies and mother country throughout this period.

The English considered that their mercantile policies would benefit the Empire and necessarily all its many parts—(a rising tide lifts all boats)—and leaders were willing to sacrifice local interests for the broader market. This policy was not unreasonable in the main, and the Colonists generally prospered under British Mercantilism, though they sometimes failed to understand that restrictions were aimed at others, not at them. Bottom line: when acts were passed that aided the mother country at the expense of the colonies, the Colonists tended to take in personally. On the other hand, Mercantilism was practically impossible to enforce, especially in the thinly populated colonies. The volume of trade so small that aggressive enforcement of duties, etc., would not pay. Smuggling became a "respectable" profession in the colonies and paid off.