Preview

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New Patterns of Trade

• Preview
• Main Idea / Reading Focus
• The Columbian Exchange
• Quick Facts The Columbian Exchange
• Mercantilism
• Quick Facts Basic Principles of Mercantilism
• The Rise of Capitalism

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New Patterns of Trade
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.

• 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?

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The Columbian Exchange

• 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
  diseasethe Columbian Exchange.

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.
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Effects of the Columbian Exchange

• 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

• 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

• 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

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Effects Widespread

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

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• 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

• 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 1900but disease not only
  factor in decrease of population
• Intermittent warfare, other violence also
  contributed

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Find the Main Idea What were two lasting effects
of the Columbian Exchange?
Answer(s) possible answerschanges in cuisine,
changes in crops grown around the world, epidemics
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Mercantilism
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Balance of Trade

• Mercantilists built wealth two waysextract 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

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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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Colonies
Building colonial empires essential to
mercantilist system
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Impact on Society
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Summarize What were the main principles of
mercantilism?
Answer(s) nation's strength depended upon its
wealth needed a favorable balance of trade
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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.
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• 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

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

• You have to show understanding of
• the economy of Europe during the 16th-18th
  Centuries

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The effects of these economies in Europe, the
Americas and AfricaAny present-day legacies of
these economies that occur to you
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This should include the topics of Mercantilism
and Protectionism, and the actions of England,
Spain, Holland and Portugal
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You should make use of key vocabulary items such
asJoint Stock CompanySharesBalance of
TradeImport/Export etc.
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You can choose from the following options1. A
comic book2. A video with words and pictures
(try Microsoft Photostory)
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Timescale
After doing some initial reading in class you
will have 3 class periods to complete the
work (this project must be handed in ONE WEEK
after the final class)