1. Changes Within Europe: Economics and Government

2. ECONOMICS

3. Characteristics of Mercantilism
1. Power = wealth [gold or silver bullion]
Export more than you import [a trade surplus].
2. Needs = A strong state to control economics
3. Sea power = control foreign markets.

4. Characteristics of Mercantilism
4. Colonies = provide markets for manufactured goods & a supply of raw materials.
5. Trade is a “zero-sum” game.
Manufactured goods
Mother Country
Colony
Raw materials
Cheap labor

5. Capitalism: a.k.a. Laissez Faire Economics
Adam Smith ( )
If individuals were allowed to seek personal gain, this would increase the general welfare.
1776  wrote The Wealth of Nations
First book to explain the economy of a nation as a system
Nation’s wealth is not in the amount of gold/silver but the amount of goods and services produced by a nation’s people.

6. Basic Capitalist Principles
Individuals driven by self-interest
The “Invisible Hand”
the economy is self-regulating!
3. The Law of Supply and Demand
Individuals free to pursue self-interest will produce goods and services that others want, at prices others will be willing to pay.
You choose what you want to sell at prices others are willing to pay.

7. Government

8. Absolute Monarchy Absolute Monarchy = A ruler with total power
Ruler backed by “divine right”
(God-given right to rule)
Everyone (essentially) believes the theory during this period
If you question the king, you question God
Tried to create trained bureaucracies, usually using the new middle class (bourgeoisie)

9. Louis XIV Best example of an absolute monarch
"L'État, c'est moi" (I am the State)
Called “The Sun King.” (b/c he gave light and life to his subjects).
Often shown as the Sun God Apollo
Maintained Versailles at a total cost of 25% of France’s total national income

10. Châteaux de Versailles
King’s residence and center of government.
Nobles required to live there
Able to keep an eye on nobles…& therefore, power

11. Versailles

12. Henry VIII of England
Broke with the Catholic Church b/c Pope wouldn’t grant him a divorce from his first wife – he wanted a male heir
Founds and makes himself head of the Anglican Church (Church of England)
Example of a monarch exerting personal power
Elizabethan Age ( )
Growth of exploration and colonization
Golden Age of England

13. Constitutional Monarchies
Some European nations developed Constitutional Monarchies, instead of Absolute Monarchies
England is the best example
English Civil War – 1640s – fought over who would hold more power, the King or the Parliament
Parliament wins out (and chops off Charles I’s head)- - they would eventually rule TOGETHER
William and Mary established a constitutional monarchy
Limits on royal power increased
Establishment of the English Bill of Rights

14. Spain Spain dominated the New World Charles V (Hapsburg) Philip II
Holy Roman Emperor
Controlled from Germany to Spain and colonies in the New World
Got tired of ruling and gave Germany/Austria to Ferdinand I
The rest went to Philip II
Philip II
Devout Catholic
Led the Spanish Inquisition
Spanish Armanda
Controlling the Empire
Spanish Armada was defeated
Mid-17th c., Spain declines and England and France are rising

15. Holy Roman Empire

16. Balance of Power
Idea that Europe would remain more stable if no one family/nation had too much power
Nations had quickly shifting alliances to prevent too much gain
Modern European nation-states’ boundaries and identities being built at this time

18. Nation states Increasing centralization of gov’t and bureaucracies
New Monarchs –Goal = Centralize their Power! Used standing armies, centralized tax collection, reduced the power & independence of the nobility (making personal armies illegal, etc.)

19. Wars
100 Year’s War – sense of national identity for France and England
Reconquista – Aragon & Castille united under Ferdinand and Isabella; Moors kicked out in 1492.

20. German Areas The Holy Roman Empire, Sort of
HRE
Centralized in modern Germany and Austria
Pretty weak
Feudalism and city-states
Catholic south vs. Lutheran north
Remember 3 things
HRE lost parts of Hungary to Ottomans
30 Years War was devastating
By 1700’s Northern German States (Prussia) gaining power
1555 Peace of Augsburg
CHOOSE!
30 Years War (1618)
Protestants challenge HRE authority
France, Denmark and Sweden get involved
Left Germany depopulated and devastated (HRE lost 7 million people)
Peace of Westphalia (1648)
German states get independence (Prussia #1)
HRE declines rapidly