Protectionist Navigation Acts

An “Act for increase of Shipping, and Encouragement of the Navigation of this Nation” was passed on 9 October 1651 by Oliver Cromwell’s Rump Parliament. It was mercantilism in spades, the start of a series of laws to regulate international trade to the advantage of British ships and British goods. Those Navigation Acts also regulated English fisheries and sought to prevent the access of foreign vessels to colonial trade. This was protectionism writ large, the desire to accumulate ‘wealth’ to Britain by selling more overseas than it bought. It was the start of a series of regulatory Navigation Acts, with an Act of 1660 that was developed and tightened by the Navigation Acts of 1663, 1673, and 1696

The acts sought to shut out foreign ships from England’s colonial trade, banning their ships, and insisting that British ships should be manned by three-quarters of their crews being British or colonial, and this included East India Company ships. Colonies were banned from exporting a detailed list of specific goods to non-British countries and colonies, and it was made compulsory for imports into them to be sourced through Britain.

The thinking was that the colonies would be forced to export raw materials only to Britain, and would be forced to buy only British manufactured goods in return. This would mean that Britain accumulated the wealth of trade, bringing in more gold and silver than it had to pay out to other countries. The acts were designed to keep Britain and its colonies as a self-contained trading bloc, insulated from the rest of the world.

That the Navigation Acts created tensions would be an understatement. They created friction in international relations, and were an endless source of disputes and discontents, occasionally playing a key factor in instigating armed conflicts. This was particularly true of the America colonies that chafed under their yoke and wanted to pursue more lucrative trades outside of their scope. They contributed substantially to the American War of Independence.

Their protectionist nature meant that both the British and their colonies had to pay more for imports than would otherwise have been the case. And the colonies were isolated by law from markets they could profitably have exploited.

The Navigation Acts were not to last. An industrializing Britain of the Industrial Revolution sought wider trade, and manufacturers wanted food to be cheaper for their workers, to relieve upward pressure on wages. Free trade was in the air in the middle of the Nineteenth Century, and the Navigation Acts were repealed in 1849, shortly after the protectionist Corn Laws went the same way. Under free trade, Britain prospered as never before.

Now protectionism has reared its head again, with the folly of trying to secure domestic jobs at the cost of higher prices for imports, and more expensive raw materials for manufacturing that make exports less competitive. It’s a beggar-my-neighbour approach that beggars the instigators more than it beggars their neighbours. The Navigation Acts were acts of folly, and were swept away when the realization came that free trade creates the wealth that protectionism inhibits. It’s a pity the lesson has to be learned again.