chapter 16 section 3. columbia exchange mercantilism balance of trade subsidies capitalism ...
TRANSCRIPT
Chapter 16Section 3
Columbia Exchange Mercantilism Balance of trade Subsidies Capitalism Joint-stock Joint-stock companies
• Widespread exchange of plants, animals and disease between two groups
• Plants and animals to develop differently
• Europeans did not know potatoes, sweet potatoes, corn or turkeys
• People in the Americas did not know coffee, oranges, rice, wheat, sheep, or cattle
• Introduction of beasts of burden (horses)
• Only domesticated beast was a llama
• Horse was a new source of transportation and labor
Exchange of food and animals had a dramatic impact
Corn and potatoes became a staples in the European diet
Foods provided nutrition and people could live longer
Cattle ranching in Texas
Coffee growing in Brazil would not have been possible
Cows and coffee came from the old world
Imagine Italian food without tomatoes
Some thought tomatoes were poisonous
1600’s they were in Italian cookbooks
Corn in China caused population to grow
China bought a lot of U.S. silver
Corn and peanuts grow in Africa
One third of all food crops grown came from the America
Diseases brought by the Europeans
Diseases killed millions Smallpox Measles Influenza Malaria
Few diseases were introduced to Europe
1518 half the population of Santo Domingo died of smallpox
Mexico’s population decreased by 30% in 10 years
Inca’s decreased from 14 million to 2 million
1500’s new type of economy
Mercantilism – the nation’s strength depends on its wealth
Had power to build a strong military
Wealth measured y the amount of gold and silver one had
One nation got wealthier by taking away items from another
Led to intense competition between nations in the 1500’s and 1600’s
Build wealth in two ways Extract gold and
silver Sell more items
than you buy This strengthened
their country while weakening another
Favorable balance of trade was essential
Reduce the amount of goods imported
Place tariffs on goods imported (adds to the cost)
Imported goods became more expensive (discouraged people to buy)
Sell exports for high prices
Manufactured goods sold for more than raw material (woolen cloth vs. raw wool)
Subsidies-governments provide grants of money to help start a new business
Control oversee sources of goods
Foreign country were looked at as rivals
At any time they could cut off resources
European nations worked to become self sufficient
Building of colonial empires essential mercantilist system
Control sources of raw materials
Provide new markets for manufactured goods
Colonies could only sell to home country
Colonies only existed to benefit the home country
Towns and cities grew as business increased
Wealthier merchants arose
Wealthy merchants enjoyed mobility
Most people are still poor
Most economic activity is carried on by the private individual or organization for profit
Individuals not governments amass great fortunes
Merchants supply colonies with goods from Europe
Brought back raw materials and products from the Americas
Overseas trade made wealthy merchants
Business activity in Europe increases
Investors took risks and invested overseas
Demand drove up prices
Increase of money supply in Europe caused increase
Shiploads of gold and silver flowed to Europe from America
Joint-stock companies- investors began to pool their money to fund even larger businesses
Investor bought shares
If company achieved a profit they all shared
Based on number of shares
If company failed investors only lost the cost of their shares
British East India Company- first joint stock company
Founded in 1600 to import spices from Asia
Other companies formed because of the expenses of forming a new colony
The Virginia Company of London established the first successful colony in America Jamestown Virgina