CHAPTER 17.2

THE FIRST GLOBAL ECONOMIC SYSTEMS

TRADE, COLONIES, AND MERCANTILISM

• European exploration changed the world

• Dramatically increased the slave trade in Africa

• Destroyed entire cultures

• Established colonies

• Began development of a global economy

• Mercantilism: set of principles that dominated economic thought in the 1600s; held that a nation’s prosperity depends on supply of bullion (gold, silver)

• Nations acquire bullion by having more exports than imports

TRADE, COLONIES, AND MERCANTILISM

• Favorable balance of trade = greater value of exports than imports

• Governments encouraged favorable balance of trade through:

• Improving transportation– roads, bridges, canals

• Tariffs: tax on imports

WHY IS MERCANTILISM RELEVANT? HOW DID IT LEAD (IN PART) TO EUROPEAN EXPLORATION?

“This new economic system was mercantilism, and its basic tenets facilitated the voyages of discovery…The underlying principles of mercantilism included (1) the belief that the amount of wealth in the world is relatively static; (2) the belief that a country's wealth can best be judged by the amount of precious metals, or bullion, it possesses; (3) the need to encourage exports over imports as a means of obtaining a favorable balance of foreign trade that would yield such metals; (4) the value of a large population as a key to self-sufficiency and state power…”

COLUMBIAN EXCHANGE

• Columbian Exchange: immense trade network between Europe and the Americas

• Exchange of goods dramatically changed both the Old and New World

• Horses changed lives of Native Americans

• Abundant crops from the Americas (potatoes, corn) became European staples; led to global population growth

COLUMBIAN EXCHANGE

• Not all aspects of the Columbian Exchange were positive

• Disease was exchanged from EU to New World

• ~90% of New World population died from disease (influenza, bubonic plague, smallpox, malaria)

• Entire Native American communities exterminated

• Encomienda: Spanish labor system that granted colonists the “right” to enslave Native Americans

EUROPEAN RIVALS IN THE EAST

• Dutch, English, French challenge Spain and Portugal in India and China

• Dutch form Dutch East India Company (VOC) and dominate spice trade; enters golden age

• VOC = most valuable corporation ever

• England formed British East India Company (EIC) and began lucrative cotton trade in India

• Ultimately wins complete control of India

ATLANTIC SLAVE TRADE

• EU expansion increase in slave trade

• Sugarcane plantations were established in the Caribbean in the 1500s

• Growing cane sugar requires many laborers

• Natives destroyed by disease, Europeans looked to Africa to supply slave labor instead

• Middle Passage: The forced voyage of enslaved Africans across the Atlantic Ocean to the Americas

• Brutal; many died en route, others from disease upon arrival

• Slaves discouraged from having children

ATLANTIC SLAVE TRADE

Triangle trade functioned as follows:

1.European ships carried European manufactured goods (guns, cloth) to Africa

• Traded goods for slaves

2.Enslaved Africans sent to the Americas and sold

3.European merchants then bought American goods (tobacco, sugar, raw cotton) and shipped them back to Europe

EFFECTS OF THE SLAVE TRADE

• Initially, African slaves were prisoners of war from African coasts• As demand grew, African slave traders moved inland for supply

• Many African rulers grew concerned about the slave crisis

• Slave trade destroyed entire communities; took away youngest and brightest

• Europeans viewed Africans as inferior beings fit only for slave labor• Not until Quakers condemn slavery did opinions begin to change

EFFECTS OF THE SLAVE TRADE

“From us they have learned…strife, quarrelling, drunkenness, trickery, theft,…unbridled desire for what is not one’s own, misdeeds unknown to them before, and…the accursed lust for gold.”

-- Dutch slave trader

“[W]e cannot reckon how great the damage is, since the [slave traders] are taking every day our natives, sons of the land and the sons of our noblemen and vassals and our relatives,…[S]o great, Sir, is the corruption and licentiousness that our country is being completely depopulated…”

-- King Alfonso of Congo, from a letter sent to the king of Portugal