Navigation Acts

The first two rules were introduced by the revolutionary parliament of Oliver Cromwell. This first Navigation Act of 1651 imposed two rules:

• only English ships could transport goods from outside Europe
• that goods from inside Europe could only be shipped by English ships and ships from the originating country.

These rules specifically targeted the Dutch who controlled a large section of Europe's international trade and even much of Britain's coastal shipping. It excluded the Dutch from essentially all trade with Britain, since the Netherlands produced very few goods itself.

After the restoration of Charles II in 1660 these rules were restored and expanded to cover exports as well. The British parliament also imposed severe restrictions on the colonial trade. All foreign shipping was banned from this trade and the colonies themselves were forbidden from directly exporting their products to non-English consumers.

The Navigation Acts continued in effect until 1849 by which point Britain's utter domination of world shipping allowed them to pursue a more laissez faire philosophy.

The Navigation Act was passed under the economic theory of mercantilism under which wealth was to be increased by restricting trade to colonies rather than with free trade. Many scholars, including Adam Smith have viewed the Navigation Acts as a very beneficial example of state intervention. The introduction of the legislation allowed Britain's shipping industry to develop in isolation and become the best in the world. The increase in merchant shipping also lead to a rapid increase in the size and quality of the British Navy, which lead to Britain becoming a global superpower.

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