The World Economy

The World Economy

Introduction • How did sliver mined by conscripted South American Indians change China’s tax system? Globalization and world economy • After 1500 sliver became the power behind the world economy! Potosi, Bolivia • Sliver allowed Europeans to buy Asian goods! • Influx of silver fueled the Chinese economy and helped keep a higher standard of living in Asia than in western Europe. New Ming tax in China: periodic tax payments of sliver • What are the consequences of explorations/ colonization by Europe, Americas, Africa, and Asia??? More than just Europe to this story

West’s 1st outreach • From about the 1100’s Europeans had started to realize the larger world from the Crusades and Islamic merchants • Islamic merchants and the Mongol Empire allowed for Asian goods to flow into Europe which many upper class had become accustomed to (spices) • Ottoman Empire cut of this trade • Europeans tried to expand into islands in the Atlantic, but didn’t have good ship technology and were scared!

Technology! • 15th century technological improvements allowed for Europeans to sail beyond their previous limits! • Developed deep-draft, round-hulled sailing ships • Compass from China • Better maps • Better defended: gunpowder from China was used for the gunnery • Made first guns and cannons

Portugal and Spain • Portugal being on the coast made sense to be interested in exploration. They were led by their prince, Henry the Navigator. He organized expeditions along the coast of Africa beginning in 1434. They rounded the Cape of Good Hope in 1488, but turned back! After hearing of Columbus’ success in the America in 1492 the Portuguese made it to India in 1498 with Vasco da Gama. • One Portuguese expedition to India was blown off course and reached Brazil which they claimed as Portugal’s • Portugal set up forts in Africa and India • 1514 Portuguese reached Indonesia and China • Spanish-searching for riches and missionary work this new country was quick for action • Christopher Columbus sailed for the Indies, but arrived in the Caribbean. The race between Portugal and Spain ended in the Treaty of Tordesillas in 1494 signed into law by the Pope! Spain got most of the Americas while Portugal got Brazil • Ferdinand Magellan first to circumnavigate the world in 1521 (of course after most of his crew died including himself and there was a civil war in the Philippines. They started with a crew of about 250 and three years later only 1 of the 5 ships and a mere 19 crew members made it back to Spain)

North European Expeditions • In the 16th century northern European states like England, Holland, and France got into the act of exploration and colonization • They too produced better technology which supported this action: lighter, faster ships than Spain and Portuguese • In 1588 England defeated the Spanish Armada which gave them even more legitimacy • The Spanish and Portuguese were busy with their colonies and while north western European states were becoming quickly more powerful • Amerigo Vespucci= New World=Americas • French explorers reached Canada in 1534. The French then went from Canada to the Great Lakes down the Mississippi. • The British started their explorations in 1497 and hoped to discover a northwest passage to India (Hudson Bay in Canada). In 17th century the British began to colonize east coast of North America. • Holland had holdings in North America(New York or New Netherlands) and Brazil • Holland came onto the scene b/c they won independence from Spain (Treaty of Utrecht 1579 from Philip II of Spain …Alba, blood council, and ______ • Netherlands, Britain, and France all chartered great trading companies like the Dutch East India Company and British East India Company. These were given government monopolies of trade!

Toward a World Economy: Columbian Exchange • Foods, diseases, and people were exchanged • Between 16th and 17th centuries at least ½ of the entire native population of the Americas died from diseases like smallpox and measles. They had no built up immunities  • This also occurred when the Europeans made contact with the Polynesians and Pacific Coast peoples • This death toll required that Europeans find a labor source elsewhere that was resistant to their diseases: Africa • Plants were also exchanged! The Americas introduced corn and potatoes! These became very important in supporting population growth around the world and were important in Africa, China, and Europe. Some Europeans were scared of the tomato and potato and thought it caused the plague or other diseases.

West’s Commercial Outreach • Muslims did still remain active in Africa, India, and Asia trade, but started to take a backseat to Europe • Spain under Philip II defeated the Ottoman Turks in the naval battle of Lepanto in 1571 effectively ending the Muslim Turks’ hope for advancement into Europe • With no Muslim force to check the routes European trade grew into large international routes. Soon Europeans were establishing ports and harbors along the coasts to facilitate trade • In some areas with powerful governments European merchants were granted special legal rights which allowed them to trade (Constantinople, Russia, Japan). The international trade (run now by Europeans) supported their local regional economies and thus Europeans won special rights of access

Imbalances in World Trade • Competition in world trade was essentially between western European states (Spain briefly) England, Holland, and France • They would import raw materials from colonies and make luxury goods to be sold around the world at various markets • Mercantilism –nations not import goods from outside of its empire, but strive to sell their exported goods as widely as possible became the new world system. If one state was doing better then it was at the expense of other states. There was an idea that their was only a fixed amount of wealth in the world. This was supported by various political policies like tariffs. • Some economies became dependent on larger market for supporting low cost goods like cash crops. Slaves were required to keep costs down. Slaves came from Africa. The trade patterns within Africa shift towards the Atlantic and sub-Saharan Africa became the main supplier of slaves.

International Inequality • The new world economic relationships proved to be very durable and many areas that carried burdens then still do today • Much of Asia and Africa were not core-dependent areas • Dependent areas were Latin America and slave-supplying parts of Africa not all were impoverished! African slave trades and princes who taxed the slave trade grew rich! Many local farmers were still subsistence farmers too and were not involved in a market economy. • Many African and Latin American merchants didn’t fully control the terms of trade. Their wealth was used to import luxury goods of Europe and not for supporting local manufacturing • Coercive labor systems spread due to the need of cheap costs to produce raw goods. The plantation systems of the Americas required huge amounts of cheap labor. In the Indies peasants became like serfs and couldn’t leave the lands they were forced to work

World in the World Economy • Not everywhere was involved in trade and some places technologically and trade wise lagged behind Europe • China: avoided trying to keep up with European developments while avoiding European subservience. Much sliver still went to China to get manufactured Chinese items, especially porcelain. • Korea and Japan were not deeply effected by the world economy b/c they were isolated. The Japanese government forbid them from trade and travel. The Japanese learned the art of gun and cannon making and then were done with European influences including Christians • Mughal Empire of 16th century India encourage world trade, but was invested in internal trade and developments. • Ottoman and Safavid empires of the Middle East were also concentrated on internal trade • Russia was large agricultural society with trade with nomads • Africa, largely untouched by the world trade patterns outside of the west African slave trading areas

Expansionist Trend • World economy expanded and gained new lands over time • 16th century dependencies: South America, west Africa, West Indies, and North America • Expanded into southeast Asia • 17th century expanded into: India and the Mughal Empire. Trade companies expanded and more tariffs passed to protect mother country’s industries (mercantilism) • Eastern Europe started to produce grains for export (serfdom supported )

Colonial Expansion: Americas • Spain first to colonize several West Indian islands (Hispaniola, Cuba, Jamaica, and Puerto Rico). 1509 started to colonize the mainland in search for gold. They were able to establish colonies b/c of guns, horses, and iron. • First mainland colony established by Vasco de Balboa in Panama. Expeditions fanned out from there into Aztec lands that were conquered by Cortes in 1521 and later to the Incas where Pizarro conquered in 1531. Pizarro joined Balboa and got a cattle farm. He heard rumors of the wealth of Peru and joined with an illiterate soldier, a priest, and lead to failed expeditions. In 1528 he gained the king’s permission to attack the Inca empire (for which he would be the governor) and with a force of 180 men attacked the empire. He captured Emperor Atahuallpa and accepted a huge ransom for him only then to strangle him! He loosely ruled the lands and there were several revolts under his rule. Pizarro was assassinated by a group of Inca rebels in 1541, but ennobled by the Spanish king! • France set up a colony in Canada at Quebec and in the Mississippi River Basin down by New Orleans. England and Holland also set up colonies along the east coast of North America. All also established colonies in West Indian islands!

British and French: N.A. • Different types of colonies than in Latin America because some settled for religious freedoms like Calvinists • People moved from homelands to live and start new lives in North America • New Netherlands taken over by British and became New York in 1664 • France: Louis XIV urged settlement of New France. The hope was to establish large manorial estates. By 1775 New France had 55,000 settlers. • Eventually France and England waged a war against each other for world market control= 7 years War. In the US the theater of the north American war is the French and Indian War. France lost and in 1763 lost much in the Treaty of Paris that officially ended the war. The British gained Canada and the Mississippi basin from this treaty while the French kept posts in Africa and West Indian sugar islands

Prussia, Hanover, and England vs. Russia, France, and Austria Austria attacked for Silesia from Prussia Russia gained territory in Prussia, however Peter III gave back the land Signed peace and Austria was driven out of Silesia Fought in Americas and India between France and England Peter III worshipped Frederick the Great and when he became tsar quickly negotiated a peace He abandoned his allies and land gains Not long afterwards, Catherine came to the throne and he “died” 7 Years’ War1756-1763

English and French more attached to West Indian holdings than America and therefore didn’t regulate their economic actions as much. They were seen as a “backwater” compared to other landholdings • After the 1776 revolution where the colonists of northeast America split from British control. The United States of America emerged similarly to Latin America: produce cash crop (tobacco, sugar, cotton) on large estates supported by slave labor. Then the wealthy planter class would import European luxury produces and altogether possess weak formal governments • Colonies were more similar to Europe: own assemblies where they were represented, discussed ideals of the Enlightenment, John Locke, imitated European institutions of science and philosophy, they also easily displaced the natives by disease and their smaller numbers in north America and their hunting and slash and burn agriculture. Pushed them west and didn’t combine with natives to form a new culture like in Latin America • Colonies did branch out in their trade and some British colonies even traded with the Chinese. In order to pay for the expenses of the 7 Years War (a colonial war seen by many British) the British government started to impose more taxes and tariffs. They hope to make more tax revenue and guarantee markets for their goods in the colonies. This only enraged the colonists who were used to hearing the great ideas of the Enlightenment and they considered themselves British without the right of representation. Thus a civil war where in 1776 the colonists fought against England. • Over time the US, especially the southern colonies became increasingly dependent on slavery. By the 18th century 23% of the English colonies were of African origin. Something that did distinguish US from the British

Spain greatest power in Europe during mid 1500’s (navy: Spanish Armada) Philip was very responsible and paid attention to even detailed paperwork Major concerned was Ottoman advance in the Mediterranean 1571 Lepanto: Spain vs. Ottomans, Spain won ending Ottoman advances Philip viewed himself as a Christian monarch fending off the advances of the infidels: Ottomans and Protestants (Calvinism spreading) Supported St. Bartholomew’s Day massacre: sent $, advisers, and troops Married Mary I of England. When Henry VIII and Edward died she took over crown and made England a Catholic state again, which Philip supported Philip II of Spain

Mary I died and Philip attempted to marry her sister, Elizabeth, but she said no Elizabeth not only makes England a Protestant state again, but supports the Protestants in France and Dutch by sending aid (made Philip II angry) Philip II decided to invade England and sent Armada, but was defeated-it marked a huge psychological blow to the soldiers and Philip himself Revolt in the Netherlands (1500’s): Netherlands were 17 separate provinces that Philip controlled in N. Europe (rich and populated area/ regional differences) Philip II left area when he became King of Spanish Empire, which inspired local discontent. This came to the forefront over his religious policies Philip II of Spain

Philip II intended to weed out heretic (Protestants) by · Increasing the number of Catholic priest · Inviting Jesuits in the area to establish Churches and schools · Strengthen the power of Inquisition and enforcing the Council of Trent Protestant sought protection from local nobility-who opposed Philip regardless of their nobility because he disregarded local autonomy. They refused to enforce his laws Adapted policy of tolerance. Calvinist actively resisted and stormed Catholic churches Philip II of Spain and Netherlands

Philip II treated this as an open revolt and rebellion. He sent Duke of Alba (known for his brutality) in to stop the heretics. Alba believed individuals should be kept in constant state of fear. Held execution and allowed soldiers to storm towns who participated in revolt (slaughtered and burned to the ground) Alba drove out many Protestants and drove rest into state of open rebellion Spain increased taxes to fund army (loyal provinces not so loyal anymore) Protestants made successful assaults in Northern provinces (Holland) Philip II of Spain and Netherlands

1576: Antwerp: soldiers sacked city: limited pay and no plundering led to this. 7000 slaughtered and city burned. Ended Philip’s rule over his Burgundian inheritance “Spanish fury” Protestants made a permanent home in Northern provinces like Holland States-General established in south: assembly of local representatives to help rule-taxation problems Pacification of Ghent 1576: · Conceded local autonomy of taxes · Role of States-General made legal -Withdrawal of troops for the low countries (northern Europe) -1609: 12 Year’s Truce: recognized existence of Holland. However, Philip II didn’t want to have to permanently recognize it Philip II of Spain and Netherlands

North America and Western ideas • Family pattern: nuclear unit • Unusual concern for their children and larger families…depended heavily on their work in a labor scare environment! • Government: responded to new western political ideas

Africa • Africa: Europeans primarily had coastal fortresses where they negotiated with kings and merchants. They did not try to claim large lands for themselves b/c of climate, disease, and non-navigable rivers • Exceptions: Portugal in Angola in search of slaves. Holland in Cape of Good Hope in the Cape Colony established in 1652. This station was meant to supply Dutch ships on their way to Asia. However, some Dutch started to set up farms and became farmers or Boers. They fanned out and quickly took over lands in this lightly populated area. They fought and enslaved Africans. This fight continued until the 20th century in the nation of South Africa

Asia • Set up administrations in early Asia trade posts like the Philippines, Indonesia, and Taiwan • British and French struggled for control of a weakening India and crumbling Mughal empire following the death of its last great king, Aurangzeb in 1707. Regional kingdoms started popping up along with existing ports of France and England. The British East India Company had more political clout, a better port in Calcutta, and the British had a superior navy • Warfare erupted in 1744 and then again in the 7 Years War. In 1756 an Indian ruler captured the British base at Calcutta. The British POWs were held in their own jail where many died b/c of humidity and overcrowding “black hole of Calcutta”. The British used this to rally their forces to finally end French power in India. • 18th century-British government took a more active role in Indian affairs. They supplemented the unofficial government of the East India Company. They did not control the entire subcontinent for the Mughal empire still remained although it was weak and regional kingdoms existed. In most colonies the European administration remained weak with few settlers. Colonial administrations pressed for economic advantage for the home country by opening up markets for home country goods and producing raw goods and cheap foods

Western Europe • Diplomatically and economically affected • Rivalries and wars! • This ended in what is referred to as the first world war: Seven Years War (1756-1763) fought in Europe, India, and North America • Lower classes in Europe had access to previously high priced goods like sugar due to plantations! • With influx of raw products many Europeans started to turn towards the idea of manufacturing to export their goods and make a large profit! • Cons: Increase of unfree labor systems, slavery, serfdom with millions of people • Benefits: new foods, wider trade patterns, gain of wealth for merchants and landholders, • Range of relationships with European and world economy: conscious isolation, controlled participation, to undeniable dependency

The World Economy