1. Economics Review

2. The Commercial Revolution and the Columbian Exchange (Sixteenth Century)

3. What is the Commercial Revolution?
“The shift from a town-centered economy to a nation-centered economy.”
The emergence of commercial capitalism

4. Causes Population increase Inflation Europe in 1600: 90 million people
20 million of those added in the 16th Century
Inflation
Devaluing of currency
Prices go up, wages go down
Actually helped emerging entrepreneurs

5. Emerging Capitalism “Putting out” system New Monarchies
New banking systems
“commercial capitalism”
Capital and labor
Mercantilism
“favorable balance of trade”
“bullionism”
Self-sufficiency
Role of the government

6. The “Price Revolution”
Population growth + rise in inflation
Spain and the New World
The Columbian Exchange
From the New World
To the New World
Results for Europeans
Results for Native Americans

7. The Cottage Industry (a.k.a. “putting out system”)
Pros
Avoided guilds
Helped farmers supplement income
Created entrepreneurs
Created new consumer goods
Work could be done at home
Cons
Inefficient
Workers spread out in many places
Labor wasn’t coordinated and organized
Lack of capital

8. The Physiocrats Francois Quesnay (1694-1774)
Pierre Dupont de Nemours ( )
Anti-mercantilism
Anti-regulation
Concerned with agriculture
Government’s role: protect property and enforce laws

9. The Economics of the Industrial Revolution
“Classical Economics”

10. Adam Smith Laissez-faire capitalism Competition Self-interest
Division of Labor

11. Supply and Demand The “Free Market”

12. Thomas Malthus ( )
An Essay on the Principle of Population (1798)
Population will outgrow the food supply
Advocated a laissez-faire approach
Don’t help the poor

13. David Ricardo (1772-1823) The “Iron Law of Wages”
Wages will always be at a subsistence level

14. The “Utopian Socialists”

15. Robert Owen (1771-1858) “Paternalistic Capitalism”
New Harmony, Indiana

16. Count de Saint Simon (1760-1825)
Founder of French Socialism
Public ownership of industrial capital
Goal of society: improve conditions of the poor

17. Charles Fourier ( )
Poverty is the cause of all social problems
Social communities
“Phalanxes”

18. The Utilitarians John Stuart Mill Jeremy Bentham
“The Greatest Good for the Greatest Number”

19. Louis Blanc (1811-1882) “Social Workshops”
Goal: out-compete private industries
Played a role in the 1848 Revolution

20. “Scientific” Socialism

21. Karl Marx (1818-1883) and Friedrich Engels (1820-1893)

22. The Communist Manifesto (1848) Das Kapital (1867)

23. Main Ideas Class conflict Impact of Industrialization
Alienation
Labor Theory of Value
Dialectical Materialism
Hegel’s dialectic “turned on its head”
An inevitable historical process (hence “scientific socialism”)

24. ALL OF THIS FUNCTIONS IN THE REALM OF IDEAS FOR HEGEL
Thesis
Antithesis
Synthesis
(New Thesis)
Antithesis
ALL OF THIS FUNCTIONS IN THE REALM OF IDEAS FOR HEGEL
Synthesis
(New Thesis)
Antithesis
ABSOLUTE IDEA
The Ultimate Synthesis
(Eventually)

25. The Ultimate Synthesis
Master
Slave
F E U D A L I S M
Nobility
Peasants
C A P I T A L I S M
ALL OF THIS FUNCTIONS IN THE REALM OF ECONOMICS FOR MARX
Bourgeoisie
Proletariat
COMMUNISM
The Ultimate Synthesis
(Eventually)

26. “Dialectical Materialism”
Marx framed this in economics
CLASS CONFLICT
Stages of history (these are scientific)
Primitive communism
Slavery
Feudalism
Capitalism
Communism
“It is not the consciousness of humans which determines their being. It is their social being which determines their consciousness.”

27. Socialism After 1870 The First International (1864-1876) Trade Unions
Legal in Britain, 1871
Legal in France, 1884
Most powerful in Germany
“Revisionist” Socialism
Jean Jaures (France, )
Eduard Bernstein (Germany, )
The Erfurt Program (Germany, 1891)
Improve lives of workers, not work for revolution
The Fabian Society (England, 1884)
The Labor Party (England, 1906)
The Second International ( )
Denounced “opportunism”
Bolshevism and Leninism
Changes to Marxism

28. Sample Essay Questions

29. Describe and compare the differences among Utopian socialists, Karl Marx, and Revisionist Socialists in their critiques of 19th century European economy and society.

30. “In the 15th century, European society was still centered on the Mediterranean region, but by the end of the 17th century, the focus of Europe had shifted north”
Identify and analyze the economic developments between 1450 and 1700 that helped bring about this shift.

31. How and in what ways were economic and political factors responsible for intensifying European imperialist activity in Africa from the mid-19th century to the beginning of the First World War?

32. Analyze changes in the European economy from 1450 to 1700 brought about by the voyages of exploration and by colonization. Give specific examples.

33. Describe and analyze the issues and ideas in the debate in Europe between 1750 and 1846 over the proper role of government in the economy. Give specific examples.

34. Analyze the common political and economic problems facing Western European nations in the period and discuss their responses to these problems.

35. Analyze the influence of the theory of mercantilism on the domestic and foreign policies of France,

36. Analyze the key developments that characterized the European economy in the second half of the nineteenth century.

37. Both Jean-Baptiste Colbert ( ) and Adam Smith ( ) sought to increase the wealth of their respective countries. How did their recommendations differ?

38. Explain the reasons for the rise of the Netherlands as a leading commercial power in the period

39. Discuss the economic policies and institutions that characterized mercantilist systems from

40. How and to what extent did the Commercial Revolution transform the European economy and diplomatic balance of power in the period ?

41. Describe and analyze economic policies in Eastern and Western Europe after 1945.

42. Compare and contrast the social and economic roles of the state in seventeenth and eighteenth century Europe (before 1789) to the social and economic roles of the state in Europe after the Second World War.