Changes Within Changes Within Europe: Government Europe: Government

and Economicsand Economics

Changes Within Changes Within Europe: Government Europe: Government

and Economicsand Economics

ECONOMICSECONOMICSECONOMICSECONOMICS

MercantilismMercantilismMercantilismMercantilism

Characteristics of MercantilismCharacteristics of MercantilismCharacteristics of MercantilismCharacteristics of Mercantilism

1.1. Power = wealth [gold or silver Power = wealth [gold or silver bullion]bullion]

•Export more than you import Export more than you import [a trade surplus]. [a trade surplus].

2. Needs = A strong state to control 2. Needs = A strong state to control economicseconomics

3. Sea power = control foreign 3. Sea power = control foreign markets.markets.

Characteristics of MercantilismCharacteristics of MercantilismCharacteristics of MercantilismCharacteristics of Mercantilism4. Colonies = provide markets for 4. Colonies = provide markets for

manufactured goods & a supply manufactured goods & a supply of raw materials.of raw materials.

5. Trade is a 5. Trade is a “zero-sum” game.“zero-sum” game.

Manufactured goods

Raw materials

MotherCountr

y

MotherCountr

y Colony

Colony

Cheap labor

Capitalism:Capitalism:a.k.a. Laissez Faire a.k.a. Laissez Faire

EconomicsEconomics

Capitalism:Capitalism:a.k.a. Laissez Faire a.k.a. Laissez Faire

EconomicsEconomics

Adam Smith Adam Smith (1723-1790)(1723-1790)Adam Smith Adam Smith (1723-1790)(1723-1790)

£ 1776 1776 wrote wrote

The Wealth of Nations The Wealth of Nations

The Wealth of NationsThe Wealth of NationsThe Wealth of NationsThe Wealth of Nations

1.1. Individuals driven by self-interest Individuals driven by self-interest

2.2. The The “Invisible Hand” (consumer’s “Invisible Hand” (consumer’s choices)choices) the economy is self-regulating!the economy is self-regulating!

Basic Capitalist PrinciplesBasic Capitalist PrinciplesBasic Capitalist PrinciplesBasic Capitalist Principles

3. The 3. The Law of Supply and DemandLaw of Supply and Demand Individuals free to pursue Individuals free to pursue

self-interest will produce goods and self-interest will produce goods and services that others want, at prices others services that others want, at prices others will be will be willing to pay.willing to pay.

Basic Capitalist PrinciplesBasic Capitalist PrinciplesBasic Capitalist PrinciplesBasic Capitalist Principles

Basic Capitalist PrinciplesBasic Capitalist PrinciplesBasic Capitalist PrinciplesBasic Capitalist Principles

4. 4. Law of CompetitionLaw of Competition Ensures production of Ensures production of

needed goodsneeded goods

5. Government interference = 5. Government interference = lowlow Laissez faireLaissez faire [“Leave things [“Leave things

alone.”]alone.”]

GovernmentGovernmentGovernmentGovernment

Absolute MonarchyAbsolute MonarchyAbsolute MonarchyAbsolute Monarchy

£ Absolute MonarchyAbsolute Monarchy = = A ruler with total powerA ruler with total power Ruler backed by “Ruler backed by “divine rightdivine right” ”

(God-given right to rule)(God-given right to rule) Tried to create trained bureaucracies, Tried to create trained bureaucracies,

usually using the new middle class usually using the new middle class (bourgeoisie)(bourgeoisie)

Louis XIVLouis XIVLouis XIVLouis XIV

£ Best example of an Best example of an absolute monarchabsolute monarch

£ ""L'État, c'est moiL'État, c'est moi" (I " (I am the State)am the State)

£ Called “The Sun Called “The Sun King.” (b/c he gave King.” (b/c he gave light and life to his light and life to his subjects).subjects).

£ Often shown as the Often shown as the Sun God ApolloSun God Apollo

Châteaux de VersaillesChâteaux de VersaillesChâteaux de VersaillesChâteaux de Versailles£ King’s King’s

residence and residence and center of center of government.government.

£ Nobles Nobles required to required to live therelive there

£ Able to keep Able to keep an eye on an eye on nobles…& nobles…& therefore, therefore, powerpower

Henry VIII of EnglandHenry VIII of EnglandHenry VIII of EnglandHenry VIII of England£ Broke with the Broke with the

Catholic Church b/c Catholic Church b/c Pope wouldn’t grant Pope wouldn’t grant him a divorce from him a divorce from his first wife – he his first wife – he wanted a male heirwanted a male heir

£ Founds and makes Founds and makes himself head of the himself head of the Anglican Church Anglican Church (Church of England)(Church of England)

£ Example of a Example of a monarch exerting monarch exerting personal powerpersonal power

Constitutional MonarchiesConstitutional MonarchiesConstitutional MonarchiesConstitutional Monarchies£ Some European nations developed Some European nations developed

Constitutional Monarchies, instead of Constitutional Monarchies, instead of Absolute MonarchiesAbsolute Monarchies

£ England is the best exampleEngland is the best example£ English Civil War English Civil War – 1640s – fought – 1640s – fought

over who would hold more power, the over who would hold more power, the King or the ParliamentKing or the Parliament

£ Parliament wins out (and chops off Parliament wins out (and chops off Charles I’s head)- - they would rule Charles I’s head)- - they would rule TOGETHERTOGETHER

Boo Hoo.

My heads are ALL gone.

Balance of PowerBalance of PowerBalance of PowerBalance of Power

Idea that Europe would remain more Idea that Europe would remain more stable if no one family/nation had too stable if no one family/nation had too much powermuch power Nations had quickly shifting alliances to Nations had quickly shifting alliances to

prevent too much gainprevent too much gain European nation-states’ boundaries and European nation-states’ boundaries and

identities being built at this timeidentities being built at this time