The World Economy

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The World Economy
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Introduction

• How did sliver mined by conscripted South
  American Indians change Chinas 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

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Wests 1st outreach

• From about the 1100s 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 didnt have good ship technology
  and were scared!

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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

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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
  Portugals
• 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)

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North European Expeditions

• 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 WorldAmericas
• 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!

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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.

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Wests 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

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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.

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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 didnt
  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 couldnt leave the lands they were
  forced to work

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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

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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 countrys industries
  (mercantilism)
• Eastern Europe started to produce grains for
  export (serfdom supported )

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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 kings
  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!

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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

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7 Years War1756-1763

• 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 didnt
  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 didnt 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

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Philip II of Spain

• Spain greatest power in Europe during mid 1500s
  (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 Protestants (Calvinism spreading)

• Supported St. Bartholomews 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 supported

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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 (1500s) 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

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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

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Philip II of Spain and Netherlands

• 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)

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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 Philips 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 Years Truce recognized existence of
  Holland. However, Philip II didnt want to have
  to permanently recognize it

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North America and Western ideas

• Family pattern nuclear unit
• Unusual concern for their children and larger
  familiesdepended heavily on their work in a
  labor scare environment!
• Government responded to new western political
  ideas

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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

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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

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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