Navigation Acts
Why Nations Fail: The Origins of Power, Prosperity, and PovertyThe Navigation Acts were English laws designed to channel international trade through English shipping and commerce. First passed in 1651 and maintained, with alterations, for roughly two centuries, they aimed to strengthen England’s position in trade with Europe and its colonies. Their defining feature was that the monopoly they sought to create was not primarily a state monopoly: it was an advantage for private English traders and manufacturers.
Purpose and Rules
The laws established the principle that English trade should be carried in English ships. Foreign vessels could not transport goods from outside Europe to England or its colonies, and ships from third-party countries could not carry goods from one European country to England. By restricting which ships could move goods and through which commercial channels, the acts limited foreign competitors’ access to English markets and colonial trade.
Parliament, Trade, and Private Advantage
The Navigation Acts formed part of a broader effort by Parliament to tilt international competition in England’s favor after 1688. The book contrasts this outward-looking protection of English commerce with the emergence of a more level playing field domestically: Parliament used trade restrictions to privilege English merchants abroad, while the commercial monopoly it promoted was held by the private sector rather than the state. The resulting arrangement could increase the profits of English traders and manufacturers and may have encouraged innovation in new, lucrative activities.
Place in a Wider Commercial Expansion
The acts operated amid a major expansion of Atlantic and global trade. English colonization of North America began at Roanoke in 1585; the English East India Company was formed in 1600; and Jamestown was founded by the Virginia Company in 1607. As overseas commerce expanded, English traders became a growing economic force, and Parliament’s shipping rules helped protect their share of that activity. In the book’s account, the acts were one part of a larger institutional setting that, alongside improved property rights, infrastructure, fiscal arrangements, and access to finance, helped create conditions favorable to economic change.