THE WORLD ECONOMY

1. EXCHANGES, CAPTIALISM, COLONIALISM, AND EMPIRE BUILDING THE WORLD ECONOMY

2. MOTIVES FOR EXPLORATION Portugal searched for fresh resources Resource poor country block from expanding on land Established sugar plantations in Azores, Madiera Direct trade without Muslim intermediaries Bypass Italian trade monopolies with Ottomans Asian spice trade African gold, ivory, and slaves Missionary efforts of European Christians Christians urged to spread the faith throughout the world Motives Gold, glory, God

3. INFLUENCE OF TECHNOLOGY New technologies help Europeans travel offshore Sternpost rudder Two types of sails Advance, sail against wind Navigational instruments Magnetic compass Astrolabe (and cross and back staffs) Knowledge of winds and currents Enabled Europeans to travel reliably

4. VOYAGES OF EXPLORATION Henrique, King of Portugal Encouraged exploration of west Africa Dias rounded the Cape of Good Hope, entered Indian Ocean, 1488 Vasco da Gama of Portugal Crossed Indian Ocean; reached India, 1497 Portuguese merchants built a trading post at Calicut, 1500 Christopher Columbus, Genoese mariner Proposed sailing to Asian markets by a western route Sponsored by Catholic kings of Spain; sailed to Bahamas in 1492 Columbus's voyage inspired others England, France, Holland begin to explore Spain, Portugal sent out more expeditions, conquistadors

5. OTHER VOYAGES • Ferdinand Magellan, Portuguese navigator, in service of Spain • One ship out of five completed the circumnavigation of the world • The English, French, Dutch • France: Explored Northern North America, Settled Canada, exploited furs • English • Atlantic seaboard of North America, Hudson Bay area • English East India Company opened Indian Ocean to English trade • Dutch • Tended to prey on Spanish, Portuguese existing holdings • Dutch East India company established to exploit Indian possessions • By 18TH century, Europeans had accurate knowledge of the world

6. TRADING POST EMPIRES • No attempt to create empires but control trade, wealth • Portuguese built 50+ posts between west Africa and east Asia • Portuguese hegemony grew weak by the late sixteenth century • English, Dutch established trading posts in Asian coasts • English in India, the Dutch at Cape Town and Indonesia • Created efficient commercial organization • Joint-stock company • Shares could be bought by anyone with money • % of shares correspond to percentage of profit due • Limited risk of any one participant to cost of the stock purchased • Insurance • Companies arose which insured ventures • Formation of powerful, profitable joint-stock companies • English East India Company, founded in 1600 • United East India Company (VOC), Dutch, founded in 1602 • Private enterprises, enjoyed government support, little oversight

7. EUROPEANS IN INDIAN OCEAN • Posts were commercial ventures not areas of colonization • Portuguese controlled area initially • Established ports in India, • Seized port of Malacca on Malay peninsula to do same as in India • Traded with locals for spice • Spanish conquest of the Philippines • Manila, bustling port city, became Spanish capital • Conquest of Java by the Dutch • Drove Portuguese out, seized their possessions • English arrive 17th century to attack Portugal, later displaced Dutch • Establish British East India Company • Relied heavily on Royal backing, Royal navy, and acquisition of Indian lands

8. COMMERICAL RIVALRIES • Global competition and conflict • Dutch forces expelled most Portuguese merchants from southeast Asia • Conflict between English and French merchants over control of India • Competition in the Americas among English, French, and Spanish forces • The Seven Years' War (1756-1763) • In Europe: British and Prussia against France, Austria, and Russia • In India: fighting between British and French forces, each with local allies • In the Caribbean: Spanish and French united to limit British expansion • In North America: fights between British and French forces • Outcome of All: British hegemony • British gained control of India, Canada, Florida • War paved the way for the British empire in the nineteenth century

10. GLOBAL EXCHANGES Biological exchanges between Old and New Worlds Columbian Exchange Global diffusion of plants, food crops, animals, human populations, diseases Columbus's voyages began and explorations furthered exchange Epidemic diseases Led to staggering population losses Smallpox reduced Aztec population by 95 percent in one century New foods and domestic animals Wheat, horses, cattle, sheep, goats, and chickens went to Americas American crops included maize, potatoes, beans, tomatoes, peppers, peanuts Growth of world population: from 425 million in 1500 to 900 million in 1800 Migration of human populations Enslaved Africans were largest group of migrants from 1500 to 1800 Sizable migration from Europe to the Americas

11. WORLD TRADE Transoceanic Trade European merchants created global trading system Manila Galleons Heavily armed ships sailed between Manilla and Mexico Asian Luxury goods to Mexico, Silver to Asia East Asia becomes dependent on American Silver Composition of Trade World and Trade Africa, Latin America became one commodity exporters Balance of Trade Europeans had an enormous surplus or positive balance of trade

12. INTERNATIONAL INEQUALITIES International Inequality Center or Core of world trade was Western Europe Most of world in an unequal relationship to Europe Coercive Labor Most of world labor was unfree Profits often depended on keeping labor cheap

13. EAST ASIA Benefited from global trade Allowed Limited Contacts Chinese manufacturing better than Europeans Chinese demanded silver in payment China failed to appreciate European threat Neo-Confucianism clouded understanding Technology considered beneath Chinese Profits, trade considered inferior occupations Japan understood impact of Europeans Eventually limited trade to one yearly ship at Nagasaki Officially closed Japan until 1854

14. EUROPEAN IMPACTS Western Europe Commercial impacts Beginning of Commercial Revolution, Capital Revolution, Price Revolution Diplomatic impacts Colonial rivalries Social Impact Rise of groups with wealth based on money not land Intellectual Impact European ideas, religions, philosophies began to spread abroad Europeans began to borrow foreign ideas if it suited their needs

15. NEW WORLD ORDER All continents eventually connected by trade American silver, foodstuffs spread throughout world Terms of trade tend to favor Western Europeans for first time Commerce generateS wealth which only agriculture had in past Europeans began to dominate world trade Increase of unfree labor systems to support commercialization Rise of Atlantic Slave trade Spread of serfdom in Russia Changes in non-European social classes Non-European landowners in Asia make money from trade, too Muslim merchants largely replaced by European merchants Rise of African slave trading states, kings who made great wealth