1. Elements of the New World Economy Catalysts for its Creation West’s new military advantages Need/Desire to explore Light Cannon on ships 3 Gs, competition etc.

2. 1. Europe’s emerging dominance in shipping -Battle of Lepanto: -Harbors -Europeans enjoy Special Trade Status in major cities -Portugal was first in the race for colonies Spanish defeat Ottomans in Med. Sea—Shows European dominance European presence in West Africa and India

3. Characteristics of the New World Economy 2. Columbian Exchange- Global Transfer of foods, plants and animals between the Old Worlds (Europe and Africa) and the New World (Americas) POSTIVE: New crops/livestock –larger food supplies—longer life expectancy NEGATIVE: European diseases Imposition of European Culture

4. 3. Ruling Colonies In the Americas Spanish Means of Control: Goals determined the method of rule: 1. Ecomienda System -Natives were subjects of the crown - Spanish collect tribute and use natives as laborers Tighter regulation Find Precious Metals—Quick Riches -Natives receive protection and have its material needs met

5. 3. Ruling Colonies cont. Dual Authority System Board of Trade Council of Indies Viceroys (Terr. Governors) Oversee Natives Rule on behalf of king Catholic Church Pope Missionaries Assimilate natives in European Culture

6. 3. Ruling of Colonies cont. North America French/English means of control: Goals determined method of rule: Less regulation Concerned with long term stability English tradition of more democratic rule

7. 4. Core-Periphery Model Takes Shape Mercantilism Theory-nations wealth is key to its power position in the world Mother Country Colony Expensive Finished Goods Cheap Raw Materials Dependent on a favorable balance of trade Colonies made this possible

8. 5. Commercial Revolution in Europe Money based Economy emerges Joint Stock Companies Rise of the Entrepreneur 6. New Trade Pattern Triangle Trade

9. Slaves and Gold Rum and Guns Sugar and Molasses. Goods Manufactured Rum, Tobacco Sample products on the Triangle Trade

10. 7. Effect of Inflation Inflation— Overabundance of Money in Circulation Value of Money decreases Prices Increase to make up for loss of profits

11. 8. Effect of Inflation Spain was most effected Massive amounts of gold and silver from the Americas Nearly destroyed economy Spain declines as a power…England rises