Economic Systems

Economic Systems Mercantilism Early Capitalists Etc.

Population & Urbanization as Factors • Population growth • American food crops • Increased resistance to epidemic diseases after the mid-seventeenth century • European population: 81 million, 1500 < 180 million, 1800

Population & Urbanization as Factors • Urbanization • Rapid growth of major cities • Paris: 130,000 in 1550 < 500,000 in 1650 • Cities: administrative and commercial centers

Why build an empire? • New or more trade goods • Fur • Coffee • Sugar • Tea • Etc.

Mercantilism ! • What’s that? • An economic philosophy of the 16th and 17th centuries that international commerce should primarily serve to increase a country's financial wealth, especially of gold and foreign currency. • Exports viewed as desirable and imports as undesirable unless they lead to even greater exports

Settler colonies in North America • Foundation of colonies on east coast, exploration of west coast • France and England came seeking fur, fish, trade routes in the early seventeenth century • NW Passage, anyone? • Settlements suffered isolation & food shortages

Settler colonies in North America • Colonial government different from Iberian colonies • North American colonies controlled by private investors with little royal backing • Royal authority and royal governors, but also institutions of self-government • Iberian Colonies: • Royal control: Viceroys • You remember what those were, right?

Settler colonies in North America • Relations with indigenous peoples • Settlers' farms interrupted the migrations of indigenous peoples • Settlers seized lands, then justified with treaties • Natives retaliated with raids on farms and villages • Attacks on European communities brought reprisals from settlers • Between 1500 and 1800, native population of North America dropped 90 percent

Early capitalism & protoindustrialization • The nature of capitalism • Private parties sought to take advantage of free market conditions • Economic decisions by private parties, not by governments or nobility • Forces of supply and demand determined price • Supply and demand • Merchants built efficient transportation and communication networks • New institutions and services: banks, insurance, stock exchanges

Early capitalism & protoindustrialization • Joint-stock companies like EEIC and VOC organized commerce on a new scale • Capitalism actively supported by governments, especially in England and Netherlands • Protected rights of private property, upheld contracts, settled disputes • Chartered joint-stock companies and authorized these to explore, conquer, and colonize distant lands

Early capitalism & protoindustrialization • The putting-out system, or protoindustrialization, of seventeenth and eighteenth centuries • Entrepreneurs bypassed guilds, moved production to countryside • Rural labor cheap • Cloth production highly profitable

Social change in early modern Europe • Early capitalism altered rural society: • improved material standards • increased financial independence of rural workers • Profits and ethics • Medieval theologians considered profit making to be selfish and sinful • Adam Smith: society would prosper as individuals pursued their own interests • Capitalism generated deep social strains also: bandits, muggers, witch-hunting

Social change in early modern Europe • The nuclear family strengthened by capitalism • More independent economically, socially, and emotionally • Love between men & women, parents & children became more important • Shift is reflected in literature (Jane Austen ring a bell?)

So what? • By 1750, a whole new economic world • New alliances • World beginning to be divided upon current economic boundaries

Economic Systems