Europes Economy Nation basic economic unit Nations competed for markets and trade goods New business methods needed Investing money Speeding flow of wealth Reducing business risk New Business Methods ID: 704064
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Slide1
The Commercial RevolutionSlide2
Europe’s Economy
Nation
= basic economic unit
Nations competed for markets and trade goods
New business methods needed:
Investing money
Speeding flow of wealth
Reducing business riskSlide3
New Business Methods
Raising
capital
– Overseas traders needed $ to finance trips
Family Bankers
– Medicis of Florence, Fuggers of Augsburg
Gov’t Chartered Banks
– issued bank notes and checks, exchanged foreign currencySlide4
New Business Methods
Joint-stock companies
– individual merchants combined resources, sold stock/shares in an overseas trading venture
Share profit/risks among many
Some joint-stock co.’s had gov’t support/monopoly on trade (
EX: Dutch East India Company
)Slide5
Results of Commercial Revolution
Inflation
– gold and silver flowed into Europe, prices rose very quickly (= inflation). Hardest hit was Spain (never recovered) and China/Japan (exchange of New World silver for goods)
More capital available
– new business createdSlide6
Results of Commercial Revolution
Goal of business
= solely to make profit, expand business, develop new ventures (
capitalism
)
Entrepreneur
= individual who combined $, ideas, raw materials, & labor to make goods and profitsSlide7
Results of Commercial Revolution
New centers of trade
– Atlantic Ocean countries (Portugal, Spain, England, the Netherlands) replace Med. Sea cities (Genoa, Venice) as leaders in world tradeSlide8
Results of Commercial Revolution
Development of
mercantilism
– new economic theory
Nation’s power depended on its wealth (amount of
bullion
, or gold & silver it possessed)Slide9
Results of Commercial Revolution
Development of
mercantilism
(cont.)
Colonies existed solely for the benefit of the mother country (provide raw materials, markets for finished goods)Slide10
Results of Commercial Revolution
Development of
mercantilism
(cont.)
Nation to possess a favorable
balance of trade
– export more goods than it imports, bullion received for exports more than paid out for imports = surplus of bullionSlide11
Results of Commercial Revolution
Change in European society
Merchants pass nobility in both wealth and power
Middle class expanded – more leisure time, coffeehouses popular as gathering places for businessmentSlide12
Results of Commercial Revolution
Change in European society
(cont.)
Peasants did not see any real benefits from the Commercial Revolution – life was still roughSlide13
The Columbian Exchange
Global Exchange of Goods, People, Ideas, and DiseasesSlide14
The Columbian Exchange
Europe’s growing population = demand for more goods and services
Trade expanded worldwide exchange of people, goods, technologies, ideas, diseases
Became known as the
Columbian ExchangeSlide15
The Columbian Exchange
Europe
Americas
Wheat Corn
Grapes Potatoes
Livestock Chocolate
Christianity Tomatoes
Disease Beans
Slaves (from Africa) Tobacco
Asia
Silk/Spices
Sugarcane
Coffee
TeaSlide16
The Columbian Exchange
Effects
Cultural Diffusion- Local cultures integrated European beliefs (and vice versa)
Large movement of population (slavery, Eur.migration to New World)
Decline of Native American pop. due to disease (EX: smallpox)Slide17
The Great Circuit
A “Triangular Trade Network”Slide18
GREAT CIRCUIT
EUROPE
AFRICA
AMERICAS
Middle Passage
Mfr. goods
Raw Materials
Knives, Swords, Guns, Cloth, Rum
Sugar, Molasses, Cotton, Tobacco
Enslaved Peoples
1
2
3Slide19
Triangular Trade NetworksSlide20
Triangular Trade Networks