During the Ancient Regime, economy was based on agriculture.
However, manufacturing and trade played a more important role from the 17th century. Land transport and roads were not very efficient in Europe at the beginning of the 18th century so domestic trade was not very important, although commerce with the colonies increased its influence in economy.
European countries supported mercantilism, an economic theory which bases the wealth of a county on the amount of gold and silver it has. Then there was a complex system to promote exports and to limit imports. High taxes (tariffs ) were set to reduce imports while subsides were offered to promote local manufactures.
Trade became the most important economic activity in the 18th century. Colonial commerce was based on the triangular trade between Europe , Africa and the colonies. Four stages could be distingushed in the triangular trade:
- Europe produces guns and cloth which are exported from Euorpe to the colonies and to Africa.
- In Africa, Europeans Exchange finished products (clothes and guns) for slaves from the local tries.
- Slaves were taken to the colonies in the Americas to work in the farms and mines. This stage is known as the middle passage..
- Slaves are sold and exchanged for sugar, coffee, tobacco, cotton and precious metals . In general raw materials were sent to Europe and then the cycle is completed.
Great Britain controlled the slaves trade as they had a monopoly for their colonies and got the Spanish monopoly or asiento as a consequence of the Treaty of Utecht. British and Dutch port were very important