Download The World Economy

The World Economy
Introduction
• How did sliver mined by conscripted South
American Indians change China’s tax system?
Globalization and world economy
• After 1500 sliver became the power behind the
world economy! Potosi, Bolivia
• Sliver allowed Europeans to buy Asian goods!
• Influx of silver fueled the Chinese economy and
helped keep a higher standard of living in Asia
than in western Europe. New Ming tax in China:
periodic tax payments of sliver
• What are the consequences of explorations/
colonization by Europe, Americas, Africa, and
Asia??? More than just Europe to this story
West’s 1st outreach
• From about the 1100’s Europeans had started to
realize the larger world from the Crusades and
Islamic merchants
• Islamic merchants and the Mongol Empire
allowed for Asian goods to flow into Europe
which many upper class had become accustomed
to (spices)
• Ottoman Empire cut of this trade
• Europeans tried to expand into islands in the
Atlantic, but didn’t have good ship technology
and were scared!
Technology!
• 15th century technological improvements allowed
for Europeans to sail beyond their previous limits!
• Developed deep-draft, round-hulled sailing ships
• Compass from China
• Better maps
• Better defended: gunpowder from China was
used for the gunnery
• Made first guns and cannons
Portugal and Spain
• Portugal being on the coast made sense to be interested in exploration.
They were led by their prince, Henry the Navigator. He organized
expeditions along the coast of Africa beginning in 1434. They rounded the
Cape of Good Hope in 1488, but turned back! After hearing of Columbus’
success in the America in 1492 the Portuguese made it to India in 1498
with Vasco da Gama.
• One Portuguese expedition to India was blown off course and reached
Brazil which they claimed as Portugal’s
• Portugal set up forts in Africa and India
• 1514 Portuguese reached Indonesia and China
• Spanish-searching for riches and missionary work this new country was
quick for action
• Christopher Columbus sailed for the Indies, but arrived in the Caribbean.
The race between Portugal and Spain ended in the Treaty of Tordesillas in
1494 signed into law by the Pope! Spain got most of the Americas while
Portugal got Brazil
• Ferdinand Magellan first to circumnavigate the world in 1521 (of course
after most of his crew died including himself and there was a civil war in
the Philippines. They started with a crew of about 250 and three years
later only 1 of the 5 ships and a mere 19 crew members made it back to
Spain)
North European Expeditions
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In the 16th century northern European states like England, Holland, and France
got into the act of exploration and colonization
They too produced better technology which supported this action: lighter,
faster ships than Spain and Portuguese
In 1588 England defeated the Spanish Armada which gave them even more
legitimacy
The Spanish and Portuguese were busy with their colonies and while north
western European states were becoming quickly more powerful
Amerigo Vespucci= New World=Americas
French explorers reached Canada in 1534. The French then went from Canada
to the Great Lakes down the Mississippi.
The British started their explorations in 1497 and hoped to discover a
northwest passage to India (Hudson Bay in Canada). In 17th century the British
began to colonize east coast of North America.
Holland had holdings in North America(New York or New Netherlands) and
Brazil
Holland came onto the scene b/c they won independence from Spain (Treaty
of Utrecht 1579 from Philip II of Spain …Alba, blood council, and ______
Netherlands, Britain, and France all chartered great trading companies like the
Dutch East India Company and British East India Company. These were given
government monopolies of trade!
Toward a World Economy: Columbian
Exchange
• Foods, diseases, and people were exchanged
• Between 16th and 17th centuries at least ½ of the entire
native population of the Americas died from diseases like
smallpox and measles. They had no built up immunities 
• This also occurred when the Europeans made contact with
the Polynesians and Pacific Coast peoples
• This death toll required that Europeans find a labor source
elsewhere that was resistant to their diseases: Africa
• Plants were also exchanged! The Americas introduced corn
and potatoes! These became very important in supporting
population growth around the world and were important in
Africa, China, and Europe. Some Europeans were scared of
the tomato and potato and thought it caused the plague or
other diseases.
West’s Commercial Outreach
• Muslims did still remain active in Africa, India, and Asia
trade, but started to take a backseat to Europe
• Spain under Philip II defeated the Ottoman Turks in the
naval battle of Lepanto in 1571 effectively ending the
Muslim Turks’ hope for advancement into Europe
• With no Muslim force to check the routes European
trade grew into large international routes. Soon
Europeans were establishing ports and harbors along
the coasts to facilitate trade
• In some areas with powerful governments European
merchants were granted special legal rights which
allowed them to trade (Constantinople, Russia, Japan).
The international trade (run now by Europeans)
supported their local regional economies and thus
Europeans won special rights of access
Imbalances in World Trade
• Competition in world trade was essentially between western
European states (Spain briefly) England, Holland, and France
• They would import raw materials from colonies and make
luxury goods to be sold around the world at various markets
• Mercantilism –nations not import goods from outside of its
empire, but strive to sell their exported goods as widely as
possible became the new world system. If one state was doing
better then it was at the expense of other states. There was
an idea that their was only a fixed amount of wealth in the
world. This was supported by various political policies like
tariffs.
• Some economies became dependent on larger market for
supporting low cost goods like cash crops. Slaves were
required to keep costs down. Slaves came from Africa. The
trade patterns within Africa shift towards the Atlantic and
sub-Saharan Africa became the main supplier of slaves.
International Inequality
• The new world economic relationships proved to be very
durable and many areas that carried burdens then still do
today
• Much of Asia and Africa were not core-dependent areas
• Dependent areas were Latin America and slave-supplying
parts of Africa not all were impoverished! African slave
trades and princes who taxed the slave trade grew rich!
Many local farmers were still subsistence farmers too and
were not involved in a market economy.
• Many African and Latin American merchants didn’t fully
control the terms of trade. Their wealth was used to import
luxury goods of Europe and not for supporting local
manufacturing
• Coercive labor systems spread due to the need of cheap
costs to produce raw goods. The plantation systems of the
Americas required huge amounts of cheap labor. In the
Indies peasants became like serfs and couldn’t leave the
lands they were forced to work
World in the World Economy
• Not everywhere was involved in trade and some places
technologically and trade wise lagged behind Europe
• China: avoided trying to keep up with European developments
while avoiding European subservience. Much sliver still went to
China to get manufactured Chinese items, especially porcelain.
• Korea and Japan were not deeply effected by the world economy
b/c they were isolated. The Japanese government forbid them from
trade and travel. The Japanese learned the art of gun and cannon
making and then were done with European influences including
Christians
• Mughal Empire of 16th century India encourage world trade, but
was invested in internal trade and developments.
• Ottoman and Safavid empires of the Middle East were also
concentrated on internal trade
• Russia was large agricultural society with trade with nomads
• Africa, largely untouched by the world trade patterns outside of the
west African slave trading areas
Expansionist Trend
• World economy expanded and gained new lands
over time
• 16th century dependencies: South America, west
Africa, West Indies, and North America
• Expanded into southeast Asia
• 17th century expanded into: India and the Mughal
Empire. Trade companies expanded and more
tariffs passed to protect mother country’s
industries (mercantilism)
• Eastern Europe started to produce grains for
export (serfdom supported )
Colonial Expansion: Americas
• Spain first to colonize several West Indian islands (Hispaniola, Cuba,
Jamaica, and Puerto Rico). 1509 started to colonize the mainland in
search for gold. They were able to establish colonies b/c of guns,
horses, and iron.
• First mainland colony established by Vasco de Balboa in Panama.
Expeditions fanned out from there into Aztec lands that were
conquered by Cortes in 1521 and later to the Incas where Pizarro
conquered in 1531. Pizarro joined Balboa and got a cattle farm. He
heard rumors of the wealth of Peru and joined with an illiterate
soldier, a priest, and lead to failed expeditions. In 1528 he gained
the king’s permission to attack the Inca empire (for which he would
be the governor) and with a force of 180 men attacked the empire.
He captured Emperor Atahuallpa and accepted a huge ransom for
him only then to strangle him! He loosely ruled the lands and there
were several revolts under his rule. Pizarro was assassinated by a
group of Inca rebels in 1541, but ennobled by the Spanish king!
• France set up a colony in Canada at Quebec and in the Mississippi
River Basin down by New Orleans. England and Holland also set up
colonies along the east coast of North America. All also established
colonies in West Indian islands!
British and French: N.A.
• Different types of colonies than in Latin America because some
settled for religious freedoms like Calvinists
• People moved from homelands to live and start new lives in North
America
• New Netherlands taken over by British and became New York in
1664
• France: Louis XIV urged settlement of New France. The hope was to
establish large manorial estates. By 1775 New France had 55,000
settlers.
• Eventually France and England waged a war against each other for
world market control= 7 years War. In the US the theater of the
north American war is the French and Indian War. France lost and in
1763 lost much in the Treaty of Paris that officially ended the war.
The British gained Canada and the Mississippi basin from this treaty
while the French kept posts in Africa and West Indian sugar islands
7 Years’ War
1756-1763
• Prussia, Hanover, and
England vs. Russia, France,
and Austria
• Austria attacked for Silesia
from Prussia
• Russia gained territory in
Prussia, however Peter III
gave back the land
• Signed peace and Austria
was driven out of Silesia
• Fought in Americas and
India between France and
England
• Peter III worshipped
Frederick the Great and
when he became tsar
quickly negotiated a
peace
• He abandoned his allies
and land gains
• Not long afterwards,
Catherine came to the
throne and he “died”
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English and French more attached to West Indian holdings than America and
therefore didn’t regulate their economic actions as much. They were seen as a
“backwater” compared to other landholdings
After the 1776 revolution where the colonists of northeast America split from
British control. The United States of America emerged similarly to Latin America:
produce cash crop (tobacco, sugar, cotton) on large estates supported by slave
labor. Then the wealthy planter class would import European luxury produces and
altogether possess weak formal governments
Colonies were more similar to Europe: own assemblies where they were
represented, discussed ideals of the Enlightenment, John Locke, imitated European
institutions of science and philosophy, they also easily displaced the natives by
disease and their smaller numbers in north America and their hunting and slash
and burn agriculture. Pushed them west and didn’t combine with natives to form a
new culture like in Latin America
Colonies did branch out in their trade and some British colonies even traded with
the Chinese. In order to pay for the expenses of the 7 Years War (a colonial war
seen by many British) the British government started to impose more taxes and
tariffs. They hope to make more tax revenue and guarantee markets for their
goods in the colonies. This only enraged the colonists who were used to hearing
the great ideas of the Enlightenment and they considered themselves British
without the right of representation. Thus a civil war where in 1776 the colonists
fought against England.
Over time the US, especially the southern colonies became increasingly dependent
on slavery. By the 18th century 23% of the English colonies were of African origin.
Something that did distinguish US from the British
Philip II of Spain
• Spain greatest power in
Europe during mid 1500’s
(navy: Spanish Armada)
• Philip was very
responsible and paid
attention to even detailed
paperwork
• Major concerned was
Ottoman advance in the
Mediterranean
• 1571 Lepanto: Spain vs.
Ottomans, Spain won
ending Ottoman advances
• Philip viewed himself as a
Christian monarch fending
off the advances of the
infidels: Ottomans and
• Supported St.
Bartholomew’s Day
massacre: sent $,
advisers, and troops
• Married Mary I of
England. When Henry VIII
and Edward died she took
over crown and made
England a Catholic state
again, which Philip
Philip II of Spain
• Mary I died and Philip
attempted to marry her
sister, Elizabeth, but she
said no
• Elizabeth not only makes
England a Protestant state
again, but supports the
Protestants in France and
Dutch by sending aid
(made Philip II angry)
• Philip II decided to invade
England and sent Armada,
but was defeated-it
marked a huge
psychological blow to the
soldiers and Philip himself
• Revolt in the Netherlands
(1500’s): Netherlands
were 17 separate
provinces that Philip
controlled in N. Europe
(rich and populated area/
regional differences)
• Philip II left area when he
became King of Spanish
Empire, which inspired
local discontent. This
came to the forefront over
his religious policies
Philip II of Spain and Netherlands
• Philip II intended to weed
out heretic (Protestants)
by
• · Increasing the number of
Catholic priest
• · Inviting Jesuits in the
area to establish Churches
and schools
• · Strengthen the power of
Inquisition and enforcing
the Council of Trent
• Protestant sought
protection from local
nobility-who opposed
Philip regardless of their
nobility because he
disregarded local
autonomy. They refused
to enforce his laws
• Adapted policy of
tolerance. Calvinist
actively resisted and
stormed Catholic churches
Philip II of Spain and Netherlands
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Philip II treated this as an
open revolt and rebellion.
He sent Duke of Alba
(known for his brutality) in
to stop the heretics. Alba
believed individuals should
be kept in constant state of
fear. Held execution and
allowed soldiers to storm
towns who participated in
revolt (slaughtered and
burned to the ground)
• Alba drove out many
Protestants and drove rest
into state of open rebellion
• Spain increased taxes to
fund army (loyal provinces
not so loyal anymore)
• Protestants made successful
assaults in Northern
provinces (Holland)
Philip II of Spain and Netherlands
• 1576: Antwerp: soldiers
sacked city: limited pay
and no plundering led to
this. 7000 slaughtered
and city burned. Ended
Philip’s rule over his
Burgundian inheritance
“Spanish fury”
• Protestants made a
permanent home in
Northern provinces like
Holland
• States-General
established in south:
assembly of local
representatives to help
rule-taxation problems
• Pacification of Ghent
1576:
• · Conceded local
autonomy of taxes
• · Role of States-General
made legal
• -Withdrawal of troops for
the low countries
(northern Europe)
• -1609: 12 Year’s Truce:
recognized existence of
Holland. However, Philip
II didn’t want to have to
permanently recognize it
North America and Western ideas
• Family pattern: nuclear unit
• Unusual concern for their children and larger
families…depended heavily on their work in a
labor scare environment!
• Government: responded to new western
political ideas
Africa
• Africa: Europeans primarily had coastal fortresses
where they negotiated with kings and merchants. They
did not try to claim large lands for themselves b/c of
climate, disease, and non-navigable rivers
• Exceptions: Portugal in Angola in search of slaves.
Holland in Cape of Good Hope in the Cape Colony
established in 1652. This station was meant to supply
Dutch ships on their way to Asia. However, some Dutch
started to set up farms and became farmers or Boers.
They fanned out and quickly took over lands in this
lightly populated area. They fought and enslaved
Africans. This fight continued until the 20th century in
the nation of South Africa
Asia
• Set up administrations in early Asia trade posts like the Philippines,
Indonesia, and Taiwan
• British and French struggled for control of a weakening India and
crumbling Mughal empire following the death of its last great king,
Aurangzeb in 1707. Regional kingdoms started popping up along with
existing ports of France and England. The British East India Company had
more political clout, a better port in Calcutta, and the British had a
superior navy
• Warfare erupted in 1744 and then again in the 7 Years War. In 1756 an
Indian ruler captured the British base at Calcutta. The British POWs were
held in their own jail where many died b/c of humidity and overcrowding
“black hole of Calcutta”. The British used this to rally their forces to finally
end French power in India.
• 18th century-British government took a more active role in Indian affairs.
They supplemented the unofficial government of the East India Company.
They did not control the entire subcontinent for the Mughal empire still
remained although it was weak and regional kingdoms existed. In most
colonies the European administration remained weak with few settlers.
Colonial administrations pressed for economic advantage for the home
country by opening up markets for home country goods and producing
raw goods and cheap foods
Western Europe
• Diplomatically and economically affected
• Rivalries and wars!
• This ended in what is referred to as the first world war: Seven Years
War (1756-1763) fought in Europe, India, and North America
• Lower classes in Europe had access to previously high priced goods
like sugar due to plantations!
• With influx of raw products many Europeans started to turn
towards the idea of manufacturing to export their goods and make
a large profit!
• Cons: Increase of unfree labor systems, slavery, serfdom with
millions of people
• Benefits: new foods, wider trade patterns, gain of wealth for
merchants and landholders,
• Range of relationships with European and world economy:
conscious isolation, controlled participation, to undeniable
dependency