Changes Within Europe: Government and Economics

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Changes Within Europe Government and Economics
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ECONOMICS
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Characteristics of Mercantilism

• 1. Power wealth gold or silver bullion
• Export more than you import a trade surplus.
• 2. Needs A strong state to control economics
• 3. Sea power control foreign markets.

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Characteristics of Mercantilism

• 4. Colonies provide markets for manufactured
  goods a supply of raw materials.
• 5. Trade is a zero-sum game.

Manufactured goods
MotherCountry
Colony
Raw materials
Cheap labor
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Capitalisma.k.a. Laissez Faire Economics

• Adam Smith (1723-1790)
• If individuals were allowed to seek personal
  gain, this would increase the general welfare.
• 1776 ? wrote The Wealth of Nations
• First book to explain the economy of a nation as
  a system
• Nations wealth is not in the amount of
  gold/silver but the amount of goods and services
  produced by a nations people.

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Basic Capitalist Principles

• Individuals driven by self-interest
• The Invisible Hand
• the economy is self-regulating!
• 3. The Law of Supply and Demand
• Individuals free to pursue self-interest will
  produce goods and services that others want, at
  prices others will be willing to pay.
• You choose what you want to sell at prices others
  are willing to pay.

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Government
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Absolute Monarchy

• Absolute Monarchy
• A ruler with total power
• Ruler backed by divine right
• (God-given right to rule)
• Everyone believes the theory during this period
• If you question the king, you question God
• Tried to create trained bureaucracies, usually
  using the new middle class (bourgeoisie)

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Louis XIV

• Best example of an absolute monarch
• "L'État, c'est moi" (I am the State)
• Called The Sun King. (b/c he gave light and
  life to his subjects).
• Often shown as the Sun God Apollo
• Maintained Versailles at a total cost of 25 of
  Frances total national income

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Châteaux de Versailles

• Kings residence and center of government.
• Nobles required to live there
• Able to keep an eye on nobles therefore, power

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Versailles
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Henry VIII of England

• Broke with the Catholic Church b/c Pope wouldnt
  grant him a divorce from his first wife he
  wanted a male heir
• Founds and makes himself head of the Anglican
  Church (Church of England)
• Example of a monarch exerting personal power

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Constitutional Monarchies

• Some European nations developed Constitutional
  Monarchies, instead of Absolute Monarchies
• England is the best example
• English Civil War 1640s fought over who would
  hold more power, the King or the Parliament
• Parliament wins out (and chops off Charles Is
  head)- - they would eventually rule TOGETHER
• William and Mary established a constitutional
  monarchy
• Limits on royal power increased
• Establishment of the English Bill of Rights

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Balance of Power

• Idea that Europe would remain more stable if no
  one family/nation had too much power
• Nations had quickly shifting alliances to prevent
  too much gain
• European nation-states boundaries and identities
  being built at this time