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England developed through mercantilism, and took up freer markets as the 19th century began. Colonialism isn't an economic system, though it became a part of mercantilism.
We're dealing with an actual economic issue here, but not explicitly.
The argument I think you're advancing is the infant industries justification for protectionism. The line of reasoning goes that a country should subsidize its industries until a certain level of productivity or cost of production is reached. Economically, this makes some sense. Market entry, say, into the production of iron ore requires that the producer is able to produce iron ore at a certain cost. In a perfectly competitive market (like a commodity market), the prices are fixed, and producers who can't produce below price don't produce any profit.
On the flipside, there's no guarantee that the industry will lower costs enough to compete. There's no certainty that current prices will hold in the future. They might go down. Political actors aren't adept at managing specific industries. They aren't interested in protecting only until the industry is competitive. Rather, they are interested in protecting domestic jobs for political reasons. In short, protective measures done under the auspices of protecting an "infant industry" are usually just regular anti-market protectionism.
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