TheColumbianExchange

GoodorBad?

WhatYouWillKnow…• DifferencebetweenTriangularTradeandColumbianExchange• TheeffectsoftheColumbianExchange(howdidthenew

foods,animalsimpactsociety?)• Theemergenceofcapitalism&itseffectsonEuropean

economy• Purposeofjoint-stockcompanies• Mercantilistsystem– goalsofacountry• ImportanceofcoloniestoEuropeannations• EffectsofMercantilism

TriangularTrade/TransatlanticTrade• Europe à Africa à N. and S. America• 3 legs of the journey

– 2nd leg = slaves from Africa to Americas = MIDDLE PASSAGE!

TheMiddlePassage• Crowded,unsanitary• Diseasespread• 20%diedonvoyage

SlaverywithinAfrica

• Notbasedonrace• Notlife-long• Notbornintoslavery• Treatedmorehumanely• Couldearnfreedom

SlaveryunderEuropeans• Life-long• Hereditaryà ifparentwas

slave,youwereslave• Notlikelytoearnfreedom• Treatedlikeproperty

(chattel)• Basedonrace

EffectsonAfrica• Lossofpopulation• Lossoftraditionswithin

Africa• ConflictsamongAfrican

groups• INTRODUCTIONOFGUNS

– TradedtoAfricansinexchangeforslaves

The “Columbian Exchange”v Squash v Avocado v Peppers v Sweet Potatoesv Turkey v Pumpkin v Tobacco v Quininev Cocoa v Pineapple v Cassava v POTATOv Peanut v TOMATO v Vanilla v MAIZE

v Syphilis

v Olive v COFFEE BEAN v Banana v Ricev Onion v Turnip v Honeybee v Barleyv Grape v Peach v SUGAR CANE v Oats

v Citrus Fruits v Pear v Wheat v HORSEv Cattle v Sheep v Pigs v Smallpoxv Flu v Typhus v Measles v Malariav Diptheria v Whooping Cough

v Trinketsv Liquorv GUNS

Increasing trade between Europe and colonies created new business and trade practices during the 1500s and 1600s. These practices would have a great impact on the economies of European nations.

• During this time, capitalism expanded

• In capitalism, most economic activity carried on by private individuals, organizations in order to seek profit

Capitalism Emerges

• Individuals amassed great trade fortunes

• Merchants supplied colonists with European goods

• Returned products, raw materials

Overseas Trade

• Overseas trade made many merchants rich

• Wealth enabled them to invest in more business ventures

• Business activity in Europe increased greatly

Increased Business Activity

The Rise of Capitalism

Money Supply• Increase of money supply another factor in higher prices

• Shiploads of gold, silver flowed into Europe from Americas to be made into new coins

• Over time, increase of money in circulation pushed prices for goods still higher

Rising Prices• Investors took risks of investing in overseas trade because of inflation

• Inflation, steady increase in prices

• Demand for goods increased due to growing population, scarcity of goods; rising demand drove prices higher

New Ventures• Overseas business ventures

often too expensive for individual investors

• Investors began pooling money in joint-stock companies

Shares• Profit, loss based on number of

shares owned• If company failed, investors lost

only amount invested

Joint-Stock Companies• Investors bought shares of stock

in company• If company made profit, each

shareholder received portion

Financing Colonies• British East India Company, one

of first joint-stock companies • 1600, imported spices from Asia• Others formed to bear cost of

establishing colonies

A New Business Organization

• Wealth measured by amount of gold, silver possessed by nation

• Mercantilists believed there was fixed amount of wealth in world

• For one nation to become wealthier, more powerful—had to take wealth, power away from another nation

• Mercantilism led to intense competition between nations

Intense Competition• Founding of colonies, new

goods in Europe led to significant changes

• 1500s, Europeans developed new economic policy, mercantilism à Nation’s strength depended on its wealth

• Wealthy nation had power for military and expanded influence

New Economic Policy

Mercantilism

Building colonial empires essential to mercantilist system

• European powers wanted to establish colonies

– To control sources of raw materials

– To provide new markets for manufactured goods

• To a mercantilist, colonies existed only to benefit home country

Colonies • Monarchs restricted economic

activities in colonies

• Colonists could not sell raw materials to other countries

• Could not buy manufactured goods from other nations

• Strict laws forbade colonies from manufacturing goods

• Forced to buy only from home country

Strict Laws

Colonies

• Mercantilists built wealth two ways—extract gold, silver from mines at home, in colonies; sell more goods than it bought from foreign countries, creating favorable balance of trade

• With favorable balance of trade, country received more gold, silver from other nations than it paid to them

• Increased its power; weakened foreign competitors

• To achieve favorable balance of trade, could reduce amount of imports by placing tariffs on goods

• Importer paid tariff, added cost to price of good

• Imported goods more expensive, discouraged people from buying

Imports • Encourage exports that could sell

for higher prices than raw materials• Countries encouraged

manufacturing and export of manufactured goods

• Governments provided subsidies to help start new industries

Exports

Balance of Trade

Controlling SourcesThirdapproachforfavorablebalanceoftrade,controllingsources

• Nationthatcontrolledownsourceswouldnotneedtoimportfromcompetingnations

• Whyimportant– Countrydidnotneedtospendownmoneytoobtainrawmaterials– Foreigncountriesconsideredrivals,mightbecomeactiveenemy,cut

offsupplyofrawmaterials

• Europeannationsworkedtobecomemoreself-sufficient

• Nationsbegantoestablishcolonies

EffectsofEconomicRevolution

• Growthoftowns• Riseofwealthymerchantclass• Increasedwealthofnations

HOWEVER…• MostofEurope’spopulationremainedpoor• Mainlyrural

INCREASEINMONARCH’SPOWERà ABSOLUTISM!

WhatYouShouldKnow…• TheeffectsoftheColumbianExchange(howdidthenew

foods,animalsimpactsociety?)• Theemergenceofcapitalism&itseffectsonEuropean

economy• Purposeofjoint-stockcompanies• Mercantilistsystem– goalsofacountry• ImportanceofcoloniestoEuropeannations• EffectsofMercantilism

EffectsofEconomicRevolution

• Growthoftowns• Riseofwealthymerchantclass• Increasedwealthofnations

HOWEVER…• MostofEurope’spopulationremainedpoor• Mainlyrural

INCREASEINMONARCH’SPOWERà ABSOLUTISM!

WhatYouShouldKnow…• TheeffectsoftheColumbianExchange(howdidthenew

foods,animalsimpactsociety?)• Theemergenceofcapitalism&itseffectsonEuropean

economy• Purposeofjoint-stockcompanies• Mercantilistsystem– goalsofacountry• ImportanceofcoloniestoEuropeannations• EffectsofMercantilism

EffectsonAfricans

• Introductionofguns• Conflictsamongtribes• Lossofpopulationduetoenslavement

– Mostlymenlost– lackoffood,defense

• PoortreatmentinMiddlePassage,slavery

EffectsonNativesinNewWorld• Introductionofguns• Introductionofhorses,pigs,cattle• Forcedtolearnnewculture(especiallySpanishcolonies)

• MissionariesspreadChristianity• Diseasekilledlargepartofpopulation• Lossofterritory/becamecolonies

– Exploitedforrawmaterials• Encomienda systemmistreatednatives

EffectsonEuropeans• Merchantsgainedwealth&powerfromincreasedtrade• Capitalismledtoindividualwealth

– BUTmostEuropeansremainedpoor–WHY?

• Inflation!!!• Mercantilismledcountriestobecomewealthy

– Increasedcontrolovercolonies– Prideinone’scountryà Nationalism– Increasedpowerofmonarch=Absolutism!