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Columbian Exchange and Commercial Revolution Columbian Exchange Mercantilism Capitalism Contact between any two peoples geographically separated from one another results in an ‘exchange’ of physical elements The three main elements are: Plants, animals and microbes The Exchange can be positive or negative in its effects In the exchange that started along the coast of Newfoundland and was made widespread by Columbus, Disease was the most negative for Indian peoples Fatality rate over a period of two to three generations was 95% for many tribal groups In some cases, as in the Mohegans case, the fatality rate could be 100% Europeans believed that it was God’s will that Indians died There was no germ theory at the time of contact. Illness in Europe was considered to be the consequence of sin Indians, who were largely “heathen” or non-Christian were regarded as sinners and therefore subject to illness as a punishment New World Microbes Not all pathogens traveled from Europe to the Americas Syphilis, polio, hepatitis and encephalitis were new world diseases African slaves were less vulnerable to European diseases than were Indians Europeans succumbed to Malaria easily Old World Diseases European disease was particularly virulent Smallpox, measles, diphtheria, whooping cough, chicken pox, bubonic plague, scarlet fever and influenza were the most common microbial diseases exchanged Nearly all of the European diseases were communicable by air and touch. The pathway of these diseases was invisible to both Indians and Europeans Disease raced ahead of people In most cases, Indian peoples became sick even before they had direct contact with Europeans Trade goods that traveled from tribe to tribe though middlemen were often the vector of disease There is little or no evidence to think that Europeans intentionally infected trade items for trade with Indians to kill them Smallpox in the Americas All of these exchanges then, of microbes, plants and animals had a dramatic effect on the environment of the New World, and by extension, a dramatic, and often negative effect on the economies and cultures of Indian peoples. Mercantilism • an economic theory that states that the world only contained a fixed amount of wealth and that to increase a countries wealth, one country had to take some wealth from another either through having a higher import/export ratio or in actual conquest of new lands and resources. Mercantilism • Between 1600 and 1800 most of the states of western Europe were heavily influenced by a policy usually known as mercantilism. • essentially an effort to achieve economic unity and political control. • Generally it may be thought of as a collection of policies designed to keep the state prosperous by economic regulation. • These policies may or may not have been applied simultaneously at any given time or place. Bullionism (gold) Bullionism was the belief that the economic health of a nation could be measured by the amount of precious metal, gold, or silver, which it possessed. The rise of a money economy, the stimulation produced by the influx of bullion from America, the fact that taxes were collected in money, all seemed to support the view that hard money was the source of prosperity, prestige, and strength. Bullionism dictated a favorable balance of trade. That is, for a nation to have gold on hand at he end oft he year, it must export more than it imports. Exports were later defined to include money spent on freight, or insurance, or travel. Each nation tried to achieve economic self-sufficiency. Those who founded new industries should be rewarded by the state. Treasures from the Americas! Favorable Balance of Trade Regulated commerce could produce a favorable balance of trade. In general, tariffs should be high on imported manufactured goods and low on imported raw material. What was needed to maintain mercantilism Regulation of international trade State intervention Monopoly Protection of manufacturers Strong state government Mercantilism, Purpose of Colonies Fleets Sea power was necessary to control foreign markets. A powerful merchant fleet would obviate the necessity of using the ships of another nation and becoming dependent on foreign assistance. In addition, a fleet in being could add to a nation's prestige and military power. Production Thriving agriculture should be carefully encouraged. Domestic production not only precluded imports of food, but farmers also provided a base for taxation. Colonies could provide captive markets for manufactured goods and sources of raw material. A large population was needed to provide a domestic labor force to people colonies. Need to keep wealth at home Luxury items were to be avoided because they took money out of the economy unnecessarily. State action was needed to regulate and enforce the above policies. England Mercantilist policies adopted during the reign of Elizabeth were continued in the seventeenth century under the Stuarts and Oliver Cromwell. Elizabethan laws were passed to discourage idleness, to reward industrial enterprise with monopolies, and to control the commerce by means of Navigation Acts. Elizabeth gave her justices of the peace the authority to fix prices, regulate hours, and compel every able-bodied subject to work at some useful trade. Lead to: Competition between nations Navigation and other Trade Acts Avoidance of tariffs Need for large labor force Slave Trade Conflict on the seas Larger Ships more maneuverable ships England vs. Spain England was late in joining the competition for Asian trade, but England also reached out. In the New World England and Spain were bound to come in conflict. England had participated little in the process of exploration yet insisted that its occupation provided a legitimate claim to title. Of course, Spain claimed that discovery provided the claim to title. The Spanish not only desired to monopolize the trade of their colonies, but the also wished to prevent the English from establishing a foothold which would constitute a base for penetration of Spanish territory. Generally speaking, the English disliked the Spanish. New Colonial Rivals (slave trade) Trans-Atlantic Slave Trade “Coffin” Position Below Deck Slave Ship Mercantilism in History Between the 15th and the 18th centuries in Europe, powerful states were created and were dedicated to the pursuit of economic power and wealth. Governments organized their then-limited capabilities to increase the wealth of the country. Mercantilist governments promoted… exports over imports industrialization over agriculture the protection of domestic production against competition from imports the intervention in trade to promote domestic employment Mercantilism in History Jean-Baptiste Colbert (1619-83) an advisor to Louis XIV, argued that states needed to accumulate gold and silver to guarantee power and wealth. Alexander Hamilton (1757-1804) advocated policies to protect the growth of the state’s manufactures. Friedrich List (1789-1846) advocated strong government intervention for economic development and government aid to technology, education and, like Hamilton, to industry. Mercantilist Perspective Views of human nature Relationship between individuals, society, state and market Relationship between domestic and international society Humans are aggressive and have conflictual tendencies Goal is to increase state power, achieved by regulating economic life; economics is subordinate to state interests. International economy is conflictual; insecurity of anarchy breeds competition; each state defends itself. The Rise of Capitalism • Individuals and corporations invest money - using their capital, not labor, to make more money • Production, distribution, and exchange of goods are controlled by private individuals or corporations, not by the state • Prices are set by supply and demand in the marketplace, not by the government Joint Stock Companies • Individuals pooled their resources to form companies larger than any one individual or family could finance • Shares of the company (stock) were issued • Stockholders shared in the profits of the company in proportion to the percentage of the stock they held • Some, such as the East India Company, were endorsed and given special treatment by the government Impact of Commercial Revolution sixteenth century change the social structure of the West Produced proletariat¹people without access to real property worked in domestic manufacturing, as agricultural labor, or as unemployed, urban poor created greater divisions between estates signified by popular risings of sixteenth and seventeenth centuries distrust of poor reflected in witchcraft hysteria. absolute monarchy of the seventeenth century Balance between monarchy and nobles shifted in favor of the monarchy loss of feudal independence monarchs gained new powers more ambitious military organization marked by professionalized armies, improved methods of tax collection appointment of bureaucracies more common decline of parliamentary government use of mercantilism as state-controlled economic system.