A Commercial* A Commercial* RevolutionRevolution

Changes in the economy of the world

*Commercial=engaged in the buying and selling of goods

Columbian ExchangeColumbian Exchange Made New Riches

• Goods went from Europe to the New World—as people migrated

• New, unknown goods were sent to the old world from the new

• “Gotta have it” attitude developed

The Transfer of goods made a difference

New World• Populations

affected by disease, genocide.

• Natives became slaves

• New cultures arose from the mixtures of the new people

Old World• People migrated

to the new world for a better chance

• New foods made better diets and longer lives

EconomicsEconomicsImportant Ideas and terms in

how money is made and exchanged

In the beginningIn the beginning

• People hunted, gathered and made what they needed.

• Then, people began to trade things—2 onions for a rabbit

• or services—building for planting.This is called

BARTERINGBARTERING

Early BusinessEarly Business

• People began to specialize in certain work—they were ArtisansArtisans..

• MerchantsMerchants took goods and sold them for profit

• Trade FairsTrade Fairs——where artisans assembled to sell their goods--increased—thus more money exchanged hands!!

• Merchant GuildsMerchant Guilds (associations) were established to regulate prices and production cotton guilds,

glass blowers guilds, violin makers, furniture makers ship builders guild, etc)

A New Social Class was born—the Middle ClassMiddle Class

Merchants +Traders+Artisans

=the Middle Class

By Mid-1500s By Mid-1500s (After Columbus)(After Columbus)

Prices were rising

SHARPLY because

there was more money and demand. This is called

INFLATIONINFLATION

$$$$Capitalism $$$$

With so much money to be made, individualsindividuals began to own the

businesses that were getting rich—not just the kings or the churches.

This system is CAPITALISMCAPITALISM

The people who believe in individual ownership are Capitalists.Capitalists.

““Entrepreneurs”Entrepreneurs”

• Came up with the ideas• Put up the money• Took the financial risk• Organized the $$-making

ventures:managed, hired, paid for raw materials

and transport, built the infrastructure and covered all the costs of running the business

Many Entrepreneurs got RICH!!!!!

People began to be dedicated to

MAKING $$$$$$MAKING $$$$$$These entrepreneursentrepreneurs and

capitalists capitalists would make a new social class AND

They would change the look of the world.

New Business Methods

• Book KeepingBook Keeping• Lending MoneyLending Money• Joint Stock CompaniesJoint Stock Companies

several would pool money so if things failed, you only lost what you put in

The Cottage IndustryCottage Industry

To by-pass the guilds—who controlled mfg ($$$) —companies would contract individuals to produce goods.

A person would “make gloves” at their home, sell them to the companies and the companies sell them for more profit by skipping “the middle man.”

Mercantilism*Mercantilism*

*The economic system based on countries gaining more gold and silver—thus being

richer….

Mercantilists believedMercantilists believed

• A country’s wealth was in the gold and silver (money) it had.

• To accomplish this—you had to export more than you imported.

• The “New World” was a “super market” of raw materials.

Mercantilists believedMercantilists believed

• The colonies existed for the MMother CCountry’s profit

• The Colonies should be strictly regulated

They could have no “home” industries could not buy goods on own (from other

countries)only MC ships could trade in and outHigh tariffs (taxes) were charged on on

imported goods

Countries began to Countries began to become rich by:become rich by:

• ExploitationExploitation of natural resources in the new world

• Building trade infrastructureRoads, ships, industries

• Issuing monopoliesmonopoliesDefinition: Complete control of a

product by an individual or companyThis would limit who could get rich and

would promote loyalty

A New World in EuropeA New World in Europe

On the positive side

• Merchants were the rich, upper class

• Skilled workers thrived

• Middle Class had comfortable lives

On the not-so-positive

• Hired laborers, servants did not enjoy same comfort

• Peasants still suffered the whim of mother nature.

Cottage Industry led to

GuildsEntrepreneurs

Cottage Industry

So because of the Changing Economics…

Who got rich and why?

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Who’s life got better and why?

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Who got it stuck to them and why?

Was this better for the World or not?

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