Unit 3: Revolutions and Reaction
Lesson E: The Origins and Spread of the Industrial Revolution
Activity 1: From Mercantilism to Capitalism
Not only did Enlightenment ideas transform governments, but they transformed economies as well. Politically, governments moved from centrally controlled monarchies into democracies that distributed more power to the people. Economically, the long held belief in mercantilism, which called for countries to export as much as possible and import as little as possible, would be replaced by a new theory often credited to Adam Smith- a theory known as capitalism. In 1776, Smith published a criticism of mercantilism called The Wealth of Nations. In it, he laid out a theory that the key to national wealth was to allow individuals to freely pursue their own self-interest. By allowing individuals to engage in free trade (trade not controlled by government), with no restrictions on imports or exports, countries could gain wealth. This was indeed a revolutionary idea.
Directions: View the following summaries of two economic viewpoints and then answer the questions that follow. Select the play button when you are ready to begin.
Written Activity - Notebook
In your notebook, respond to the following questions:
- Describe how people in mercantilist and capitalist systems would have differing beliefs about the following:
- placing duties on imports from other countries
- colonizing foreign countries
- allowing citizens to make their own economic decisions
- Why do you think countries such as Great Britain shifted from a mercantile system to a capitalist system?