1. Preview Main Idea / Reading Focus Main Idea / Reading Focus Main Idea / Reading Focus Main Idea / Reading Focus The Columbian Exchange The Columbian Exchange The Columbian Exchange The Columbian Exchange Basic Principles of Mercantilism Basic Principles of Mercantilism Basic Principles of Mercantilism Basic Principles of Mercantilism The Rise of Capitalism The Rise of Capitalism The Rise of Capitalism The Rise of Capitalism The First Global Economic Systems

2. Main Idea The creation of colonies in the Americas and elsewhere led to the exchange of new types of goods, the establishment of new patterns of trade, and new economic systems in Europe. Colony: A country or area under the full or partial political control of another country, typically a distant one. New Patterns of Trade

3. New Colonial Rivals

4. Colonial Land Claims by 1914

5. Reading Focus How did exploration result in a new exchange of plants and animals? What was mercantilism, and how did it push the drive to establish colonies? How did global trade lead to the rise of capitalism in Europe?

6. Voyages launched large-scale contact between Europe and Americas. Interaction with Native Americans led to sweeping cultural changes. Contact between the two groups led to the widespread exchange of plants, animals, and disease—the Columbian Exchange. The Columbian Exchange

8. Plants, animals developed in very different ways in hemispheres Europeans—no potatoes, corn, sweet potatoes, turkeys People in Americas—no coffee, oranges, rice, wheat, sheep, cattle The Exchange of Goods

9. The introduction of beasts of burden to the Americas was a significant development from the Columbian Exchange. The introduction of the horse provided people in the Americas with a new source of labor and transportation. Beasts of Burden

11. Different Foods Exchange of foods, animals had dramatic impact on later societies Over time crops native to Americas became staples in diets of Europeans Foods provided substantial nutrition, helped people live longer Italian Food Without Tomatoes? Until contact with Americas, Europeans had never tried tomatoes Most Europeans thought tomatoes poisonous By late 1600s, tomatoes had begun to be included in Italian cookbooks Economics and Gastronomics Activities like Texas cattle ranching, Brazilian coffee growing not possible without Columbian Exchange; cows, coffee native to Old World Traditional cuisines changed because of Columbian Exchange Effects of the Columbian Exchange

12. Effects Widespread Effects of Columbian Exchange felt not only in Europe, Americas China China Arrival of easy-to-grow, nutritious corn helped population grow tremendously Arrival of easy-to-grow, nutritious corn helped population grow tremendously Also a main consumer of silver mined in Americas Also a main consumer of silver mined in Americas Africa Africa Two native crops of Americas—corn, peanuts—still among most widely grown Two native crops of Americas—corn, peanuts—still among most widely grown Scholars estimate one-third of all food crops grown in world are of American origin Scholars estimate one-third of all food crops grown in world are of American origin

13. Devastating Impact Native American population continued to decline for centuries Inca Empire decreased from 13 million in 1492 to 2 million in 1600 North American population fell from 2 million in 1492 to 500,000 in 1900— but disease not only factor in decrease of population Intermittent warfare, other violence also contributed The Introduction of New Diseases Native Americans had no natural resistance to European diseases Smallpox, measles, influenza, malaria killed millions Population of central Mexico may have decreased by more than 30 percent in the 10 years following first contact with Europeans

14. Find the Main Idea Write a paragraph describing the effects of the Columbian Exchange. Answer(s): possible answers—changes in cuisine, changes in crops grown around the world, epidemics

15. Mercantilism

16. Bellringer

17. Founding of colonies, new goods in Europe led to significant changes 1500s, Europeans developed new economic policy, mercantilism New Economic Policy

18. Balance of trade Mercantilists believed there was fixed amount of wealth in world Mercantilists believed there was fixed amount of wealth in world Mercantilists believed that the prosperity of a nation depends on a large supply of gold and silver. Mercantilists believed that the prosperity of a nation depends on a large supply of gold and silver. To bring in gold and silver payments, nations tried to have a favorable balance of trade. To bring in gold and silver payments, nations tried to have a favorable balance of trade.

19. Balance of Trade Balance of trade: difference in value between what a nation imports and what it exports over time. Balance of trade: difference in value between what a nation imports and what it exports over time. When the balance is favorable, the exported goods are of greater value than the imported goods. When the balance is favorable, the exported goods are of greater value than the imported goods.

20. Intense Competition For one nation to become wealthier, more powerful—had to take wealth, power away from another nation For one nation to become wealthier, more powerful—had to take wealth, power away from another nation Mercantilism led to intense competition between nations Mercantilism led to intense competition between nations

21. Does the US have a favorable balance of trade with China?

22. Colonies Why did European colonization provide a favorable balance of trade? Why did European colonization provide a favorable balance of trade? Raw materials imported from colonies: not expensive Raw materials imported from colonies: not expensive Manufactured goods exported: expensive! Manufactured goods exported: expensive! VALUE ADDED AT HOME VALUE ADDED AT HOME

25. Summarize What were the main principles of mercantilism? Answer(s): nation's strength depended upon its wealth; needed a favorable balance of trade

26. Increasing trade between Europe and colonies created new business and trade practices during the 1500s and 1600s. These practices would have a great impact on the economies of European nations. During this time, capitalism expanded In capitalism, most economic activity carried on by private individuals, organizations in order to seek profit Capitalism Emerges Individuals amassed great trade fortunes Merchants supplied colonists with European goods Returned products, raw materials Overseas Trade Overseas trade made many merchants rich Wealth enabled them to invest in more business ventures Business activity in Europe increased greatly Increased Business Activity The Rise of Capitalism

27. Money Supply Increase of money supply another factor in higher prices Shiploads of gold, silver flowed into Europe from Americas to be made into new coins Over time, increase of money in circulation pushed prices for goods still higher Rising Prices Investors took risks of investing in overseas trade because of inflation Inflation, steady increase in prices Demand for goods increased due to growing population, scarcity of goods; rising demand drove prices higher

28. New Ventures Overseas business ventures often too expensive for individual investors Investors began pooling money in joint-stock companies Shares Profit, loss based on number of shares owned If company failed, investors lost only amount invested Joint-Stock Companies Investors bought shares of stock in company If company made profit, each shareholder received portion Financing Colonies British East India Company, one of first joint-stock companies 1600, imported spices from Asia Others formed to bear cost of establishing colonies A New Business Organization

29. Identify Cause and Effect Why did new business practices develop in Europe? Answer(s): because of increasing trade between Europe and its colonies