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Definition: Mercantilism is the idea that colonies existed for the benefit of the Mother Country. In other words, the American colonists could be compared to tenants who 'paid rent' by providing materials for export to Britain. According to the beliefs at the time, the wealth of th world was fixed. In order to increase a country's wealth, they needed to either explore and expand or conquer wealth through conquest. Colonizing America meant that Britain greatly increased its base of wealth. To keep the profits, Britain tried to keep a greater number of exports than imports. The most important thing for Britain to do was keep its money and not trade with other countries to get necessary items. The colonists role was to provide many of these items to the British. This idea of a fixed amount of wealth was the target of Adam Smith's Wealth of Nations(1776). Smith's work had a profound effect on the American founding fathers and the nation's economic system.

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