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The Columbian Exchange
Good or Bad?
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What You Will Know… Difference between Triangular Trade and Columbian Exchange The effects of the Columbian Exchange (how did the new foods, animals impact society?) The emergence of capitalism & its effects on European economy Purpose of joint-stock companies Mercantilist system – goals of a country Importance of colonies to European nations Effects of Mercantilism
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Triangular Trade/Transatlantic Trade
Europe Africa N. and S. America 3 legs of the journey 2nd leg = slaves from Africa to Americas = MIDDLE PASSAGE!
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The Middle Passage Crowded, unsanitary Disease spread
20% died on voyage
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Slavery within Africa Slavery under Europeans Life-long Hereditary if parent was slave, you were slave Not likely to earn freedom Treated like property (chattel) Based on race Not based on race Not life-long Not born into slavery Treated more humanely Could earn freedom
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Effects on Africa Loss of population Loss of traditions within Africa
Conflicts among African groups INTRODUCTION OF GUNS Traded to Africans in exchange for slaves
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The “Columbian Exchange”
Squash Avocado Peppers Sweet Potatoes Turkey Pumpkin Tobacco Quinine Cocoa Pineapple Cassava POTATO Peanut TOMATO Vanilla MAIZE Syphilis Trinkets Liquor GUNS Olive COFFEE BEAN Banana Rice Onion Turnip Honeybee Barley Grape Peach SUGAR CANE Oats Citrus Fruits Pear Wheat HORSE Cattle Sheep Pigs Smallpox Flu Typhus Measles Malaria Diptheria Whooping Cough
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The Rise of Capitalism 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
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Rising Prices Money Supply
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 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
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A New Business Organization
New Ventures Overseas business ventures often too expensive for individual investors Investors began pooling money in joint-stock companies Joint-Stock Companies Investors bought shares of stock in company If company made profit, each shareholder received portion Shares Profit, loss based on number of shares owned If company failed, investors lost only amount invested 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
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Mercantilism New Economic Policy Intense Competition
Founding of colonies, new goods in Europe led to significant changes 1500s, Europeans developed new economic policy, mercantilism Nation’s strength depended on its wealth Wealthy nation had power for military and expanded influence New Economic Policy Wealth measured by amount of gold, silver possessed by nation Mercantilists believed there was fixed amount of wealth in world For one nation to become wealthier, more powerful—had to take wealth, power away from another nation Mercantilism led to intense competition between nations Intense Competition
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Colonies Building colonial empires essential to mercantilist system
European powers wanted to establish colonies To control sources of raw materials To provide new markets for manufactured goods To a mercantilist, colonies existed only to benefit home country Colonies Monarchs restricted economic activities in colonies Colonists could not sell raw materials to other countries Could not buy manufactured goods from other nations Strict laws forbade colonies from manufacturing goods Forced to buy only from home country Strict Laws
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Balance of Trade Imports Exports
Mercantilists built wealth two ways—extract gold, silver from mines at home, in colonies; sell more goods than it bought from foreign countries, creating favorable balance of trade With favorable balance of trade, country received more gold, silver from other nations than it paid to them Increased its power; weakened foreign competitors To achieve favorable balance of trade, could reduce amount of imports by placing tariffs on goods Importer paid tariff, added cost to price of good Imported goods more expensive, discouraged people from buying Imports Encourage exports that could sell for higher prices than raw materials Countries encouraged manufacturing and export of manufactured goods Governments provided subsidies to help start new industries Exports
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Controlling Sources Third approach for favorable balance of trade, controlling sources Nation that controlled own sources would not need to import from competing nations Why important Country did not need to spend own money to obtain raw materials Foreign countries considered rivals, might become active enemy, cut off supply of raw materials European nations worked to become more self-sufficient Nations began to establish colonies
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Effects of Economic Revolution
Growth of towns Rise of wealthy merchant class Increased wealth of nations HOWEVER… Most of Europe’s population remained poor Mainly rural INCREASE IN MONARCH’S POWER ABSOLUTISM!
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What You Should Know… The effects of the Columbian Exchange (how did the new foods, animals impact society?) The emergence of capitalism & its effects on European economy Purpose of joint-stock companies Mercantilist system – goals of a country Importance of colonies to European nations Effects of Mercantilism
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Effects of Economic Revolution
Growth of towns Rise of wealthy merchant class Increased wealth of nations HOWEVER… Most of Europe’s population remained poor Mainly rural INCREASE IN MONARCH’S POWER ABSOLUTISM!
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What You Should Know… The effects of the Columbian Exchange (how did the new foods, animals impact society?) The emergence of capitalism & its effects on European economy Purpose of joint-stock companies Mercantilist system – goals of a country Importance of colonies to European nations Effects of Mercantilism
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Effects on Africans Introduction of guns Conflicts among tribes
Loss of population due to enslavement Mostly men lost – lack of food, defense Poor treatment in Middle Passage, slavery
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Effects on Natives in New World
Introduction of guns Introduction of horses, pigs, cattle Forced to learn new culture (especially Spanish colonies) Missionaries spread Christianity Disease killed large part of population Loss of territory/became colonies Exploited for raw materials Encomienda system mistreated natives
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Effects on Europeans Merchants gained wealth & power from increased trade Capitalism led to individual wealth BUT most Europeans remained poor WHY? Inflation!!! Mercantilism led countries to become wealthy Increased control over colonies Pride in one’s country Nationalism Increased power of monarch = Absolutism!
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