The Columbian Exchange

• The voyages of discovery initiated a global exchange of people, goods, and ideas.
• European nations embraced mercantilism.
• Economic changes in Europe fostered the development of capitalism.

The Columbian Exchange

• Columbus's voyages connected the Americas to the rest of the world.
• People, plants, animals, diseases, and ideas were exchanged between the Eastern and Western Hemispheres.
• The exchange of living things and ideas between the Eastern and Western Hemispheres is known as the Columbian Exchange.
• Enslaved Africans were among the early settlers crossing the oceans.
• There was a large migration in the 1800s, with over 50 million people from Europe settling in the Americas.
• People from Asia also migrated to the Americas starting in the 1800s.
• North and South America have diverse societies as a result.

New Crops, New Foods

• Plants from the Americas changed eating habits and helped increase global population.
• Maize, or corn, was a crucial plant, leading to population growth in Africa and Asia.
• Peanuts became a staple crop in Africa and were used for protein or cooking oil.
• Potatoes, manioc, beans, and tomatoes were important food crops.
• Plants from the Eastern Hemisphere also influenced the Americas.
• Sugar cane became a major profit source in the Caribbean and Brazil.
• Ranchers in the Americas used grains like barley and oats for livestock.
• New crops like rye, rice, grapes, bananas, and coffee transformed the Western Hemisphere.

Horses Arrive in the New World

• Conquistadors brought the first horses to the Americas
• A new way of life developed around the horse.
• Spanish ranchers used horses to herd cattle in the Americas in the 1500s.
• The horse became central to Native American cultures, who used them for hunting buffalo and warfare.
• South American gauchos and North American vaqueros were the first cowboys in the New World.

Other Exchanges

• European diseases had deadly effects on the people of the Americas.
• Sailors brought new diseases back to Europe from the New World.
• The Columbian Exchange led to the sharing of technologies.
• The Americas lacked the wheel, iron tools, firearms, and large work animals before the Spanish arrival.
• The Spanish admired the massive stone buildings made by the Aztec and Inca civilizations.
• Incan buildings could withstand earthquakes due to advanced carving methods.

Mercantilism

• Global trade changes led to mercantilism.
• Mercantilism is an economic policy that strengthens a nation by expanding trade.
• The goal of mercantilism is to accumulate wealth and make the nation powerful.
• Mercantilists believed trade's main goal should enrich the nation.
• Traders sold goods for gold and silver, which paid for a powerful army and navy.
• Mercantilists urged lawmakers to increase a nation's wealth by regulating trade and boosting production.
• Nations aimed to "sell more...yearly than we consume...in value."
• Most European nations adopted mercantilism by the 1600s and 1700s.
• Imports were taxed to exclude foreign goods and boost domestic markets.

Mercantilism in the Tea Trade

• Buying and selling tea and collecting tea tax revenues supported merchants, traders, and artists worldwide.
• England's tea trade exemplifies mercantilism.
• England established tea plantations throughout its empire in Asia and Africa.
• The British East India Company maintained high tea prices with its trade monopoly.
• The British designed swift ships to transport tea from China.
• English tea drinkers began sweetening tea with sugar.
• This increased sugar production in the Caribbean to meet the demand.
• British tea merchants opened shops to sell imported tea to the public.
• Tea drinking introduced new eating habits and teatime foods.
• English porcelain and silver manufacturers exported tea service items to the colonies and Europe.
• English artists received commissions to paint families drinking tea.

Sugar: A Sweet Story of Capitalism

• Europeans demanded more sugar by the 1600s, supplied by large plantations in the Americas.
• The sugar trade involved investment, land development, labor, and manufacturing.
• Profits from sugar were reinvested to continue the cycle.

A Commercial Revolution

• Expanded trade, money supply, and empire-building spurred capitalism's growth.
• Capitalism is a profit-driven economic system with private business ownership.
• It is also called the free market or free enterprise system.
• Prices for food and goods rose in the 1500s.
• There was also a sharp increase in money in circulation, leading to inflation.
• This historical inflation period in Europe is known as the price revolution.
• Rapid population growth increased demand for food, which farmers couldn't meet, raising food prices.
• Gold and silver from the Americas increased the money supply, driving up prices.
• Higher prices increased profits for landowners and merchants.
• They invested profits to increase businesses, with capital increasing profits.
• Land ownership is another aspect of capitalism.
• Individuals, not the government, owned the land and tools to grow crops.
• Individuals benefit from private ownership.

Tulipmania

• In the 1630's there was a frenzy over a single good: the tulip bulb"
• People made and lost fortunes
• The price of tulips rose dramatically and then abruptly crashed.

The Price Revolution and its Effects

• The price revolution benefited landowners most through higher crop prices and profits.
• Dutch and English landowners forced peasants off the land due to wool trade profits.
• Feudal systems ended in the Netherlands and England because peasant no longer farmed for lords.
• Many peasants moved to cities to find work.
• The price revolution drove up prices for goods like cloth.
• Cloth merchants wanted to produce more and make larger profits.

Goods and Profits

• English cloth merchants bought raw wool cheaply and had families spin and weave it.
• Merchants picked up the cloth and sold it for the highest prices, maximizing profits.
• People who wove cloth worked in their homes or "cottages."
• The cottage industry involved people using their own equipment and working long hours.
• Capital and labor became separated for the first time.
• Capitalists invested in coal mines, breweries, and shipyards in England.
• Dutch capitalists founded printing, diamond-cutting, sugar-refining, and even chocolate industries.

A Market Economy

• Changes in industry and agriculture changed English and Dutch economies.
• The Netherlands and England moved away from a traditional economy.
• In a traditional economy, goods are exchanged based on custom or tradition.
• A market economy bases prices and distribution on market competition, not fixed by guilds or customs.
• It requires private property, a free market, and profit incentives.

The Middle Class Grows

• Merchants and skilled workers in European cities became prosperous, forming a middle class.
• Hired laborers and servants lived in poverty.
• These changes needed time to reach all levels of society because much of the population remained rural.