Exploration and Expansion:New Patterns of Trade

Chapter 16 Sec 3 Pages 482-487

Getting StartedThe opinions of Bartolomé de Las Casas were influential in alerting Europeans to the treatment of Native Americans. What did you think?

What you will learn

The creation of colonies in the Americas and elsewhere led to the exchange of new goods, the establishment of new patterns of trade, and new economic systems in Europe.

Trade emerges in the ‘New World’

The Columbian Exchange takes place.Contact between the Native Americans and colonists have led to the widespread exchange of plants, animals, and disease.

The “Columbian Exchange”The “Columbian Exchange”The “Columbian Exchange”The “Columbian Exchange” Squash Avocado Peppers Sweet

Potatoes

Turkey Pumpkin Tobacco Quinine

Cocoa Pineapple

Cassava POTATO

Peanut TOMATO Vanilla MAIZE

Syphilis

Olive COFFEE BEAN Banana Rice

Onion Turnip Honeybee Barley

Grape Peach SUGAR CANE

Oats

Citrus Fruits Pear Wheat HORSE

Cattle Sheep Pigs Smallpox

Flu Typhus Measles Malaria

Diptheria Whooping Cough

Trinkets

Liquor

GUNS

Effects of Columbian ExchangeCrops of Americas (corn/potatoes) become staples in diets of Europeans and other parts of the worldTomatoes from Americas, become main part of Italian cuisineCorn helps China’s population growBrazilians cows and coffee would not have been possible (Europe>Americas)1/3 of the worlds food crops grown today originated in America

Questions:

1. How did exploration result in a new exchange of plants and animals?

What were the results of the Columbian Exchange?

If the Columbian Exchange had not taken place, how might the foods we eat be different?

Mercantilism = “Hands On Economy”New type of economic policy

Basic Principles1. Nation’s strength depends on its wealth

measured in silver and gold1. A wealthy nation has the power to build a strong

military to protect and influence others

2. Fixed amount of wealth in world, and nation’s compete for it1. Lead to competition among nations for wealth

3. Balance of trade is important to gaining wealth4. Countries should seek to limit imports and

maximize exports

Mercantilism Cont…

Basic Principles Cont…5. Countries should have its own source for

raw materials and precious metals to avoid dependence on others. (oil in America)

6. Colonies exist only as a way for the mother country to make profit

7. A country’s colonies should not trade with any other countries.

Questions:

What was mercantilism, and how did it push the drive to establish colonies?

How did the desire to create a favorable balance of trade help lead to the establishment of colonies?

Balance of Trade

Under Mercantilism, nations can gain wealth in two ways:

Extract gold and silver from minesIt could sell more goods than it bought • (Exports > Imports)

Balance of Trade- the difference in value between what a nation imports and exports over a period of time.

Question:

How do you discourage people from buying other countries’ goods? (a.k.a imports)

Balance of Trade Cont…

Creating favorable balances of trade1. Place tariffs (tax) on imported goods =

makes imported goods more expensive• People are discouraged from buying

2. Finished goods (exports) sell for more than raw materials.• Cloth is more expensive than raw wool.

3. Control overseas sources of raw materials (colonies)

Economic Policy is bad for coloniesMother Country gets all the benefits, but the colonies have no say in economic policy.

Leads to trouble!• Limited trade!

– Only allowed to trade with home country- Could not manufacture own Goods, only buy from home country

• Colonies dislike!

Impact on Society

Businesses increase in number due to growth of industry

Towns and cities grow

Wealthy merchant middle class growsColumbian exchange impacts foods

Questions:How did monarchs restrict economic activity in their colonies to make sure that the colonies only benefited the home country?

What was the impact of colonization on European societies?

The Rise of Capitalism

Capitalism- economic system in which most businesses are privately owned.

Merchants begin to supply the colonies with goods from Europe and bring Raw materials to produce more goods.

Rising PricesPrice Revolution occurs (1470 – 1620)

# people are growing in ColoniesDemand for goods are increasingAs demand ^ prices ^

Inflation pushes prices higher in Europe

A New Business Organization

Joint-Stock CompanyBusinesses formed by groups of people who jointly make an investment and share in the profits and losses.• Ex. British East India Company & Virginia

Company

Questions:

1. How did global trade lead to the rise of capitalism in Europe?

2. What is Capitalism?

Credits:

PowerPoint adapted by: Mr. Harrington, with modifications.