T HE C OLUMBIAN E XCHANGE AND G LOBAL T RADE Chapter 4 Section 4

M AIN I DEAS The colonization of the Americas introduced new items into the Eastern and Western hemispheres. The global exchange of goods permanently changed Europe, Asia, Africa and the Americas.

I NTRODUCTION The colonization of the Americas prompted both forced and voluntary migration of millions of people. New and powerful societies were developed. Colonization resulted in the exchange of new items that greatly influenced the lives of people throughout the world. New wealth from the Americas led to new business and trade practices in Europe.

T HE C OLUMBIAN E XCHANGE Global transfer of foods, plants and animals during the colonization of the Americas. Ships brought back items from the Americas that no one had seen before. Tomatoes, squash, pineapples, tobacco, turkey… Most importantly, potatoes & corn Inexpensive & nutritious

T O A MERICA From Europe Livestock Horses, cattle, sheep and pigs From Africa Bananas, black-eyed peas, yams Wheat, rice, barley and oats Disease

G LOBAL T RADE New wealth and growth in overseas trade led to a wave of new business and trade practices in Europe. Dramatically changed the economic atmosphere of Europe.

R ISE OF C APITALISM Capitalism – economic system based on private ownership and the investment of resources, such as money, for profit. Governments are no longer sole owners of great wealth. Merchants and traders became wealthy. Result? Businesses grew and flourished.

I NFLATION Increase in economic activity led to increase in nation’s money supply. Inflation = steady rise in the price of goods. Occurs when people have more money to spend and demand more goods and services. Supply is less than demand = increase in price.

J OINT S TOCK C OMPANIES Business venture that developed during this period. Works like a modern-day corporation. Investors buy shares of stock in a company. Number of people combining their wealth for a common purpose. American colonization Failed = lost contributions Thrived = shared profits JSC established Jamestown

T HE G ROWTH OF M ERCANTILISM Theory – country’s power depended mainly on its wealth. Countries should do everything possible to acquire more wealth. Let’s look at page 140…

B ALANCE OF T RADE Two ways to increase a country’s wealth: Obtain as much gold and silver as possible. Establish a favorable balance of trade. Sell more goods than purchased. Basically, become self- sufficient. Colonies provided gold & silver. Also, raw materials like wood and fur.