The Columbian Exchange
Good or Bad?
What You Will Know…
• Difference between Triangular Trade and Columbian Exchange
• The effects of the Columbian Exchange (how did the new
foods, animals impact society?)
• The emergence of capitalism & its effects on European
economy
• Purpose of joint-stock companies
• Mercantilist system – goals of a country
• Importance of colonies to European nations
• Effects of Mercantilism
Triangular Trade/Transatlantic Trade
• Europe  Africa  N. and S. America
• 3 legs of the journey
– 2nd leg = slaves from Africa to Americas
= MIDDLE PASSAGE!
The Middle Passage
• Crowded, unsanitary
• Disease spread
• 20% died on voyage
Slavery within Africa
•
•
•
•
•
Not based on race
Not life-long
Not born into slavery
Treated more humanely
Could earn freedom
Slavery under Europeans
• Life-long
• Hereditary  if parent was
slave, you were slave
• Not likely to earn freedom
• Treated like property
(chattel)
• Based on race
Effects on Africa
• Loss of population
• Loss of traditions within
Africa
• Conflicts among African
groups
• INTRODUCTION OF GUNS
– Traded to Africans in
exchange for slaves
The “Columbian Exchange”

Squash

Avocado

Peppers

Sweet Potatoes

Turkey

Pumpkin

Tobacco

Quinine

Cocoa

Pineapple

Cassava


Peanut

TOMATO

Vanilla


Syphilis
POTATO
MAIZE

Trinkets

Liquor

GUNS

Olive

COFFEE BEAN

Banana

Rice

Onion

Turnip

Honeybee

Barley

Grape

Peach

SUGAR CANE

Oats

Citrus Fruits

Pear

Wheat

HORSE

Cattle

Sheep

Pigs

Smallpox

Flu

Typhus

Measles

Malaria

Diptheria

Whooping Cough
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.
Capitalism Emerges
Overseas Trade
Increased Business
Activity
• During this time,
capitalism expanded
• Individuals amassed
great trade fortunes
• Overseas trade made
many merchants rich
• In capitalism, most
economic activity
carried on by private
individuals,
organizations in order
to seek profit
• Merchants supplied
colonists with
European goods
• Wealth enabled them
to invest in more
business ventures
• Returned products,
raw materials
• Business activity in
Europe increased
greatly
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
A New Business Organization
New Ventures
Joint-Stock Companies
• Overseas business ventures
often too expensive for individual
investors
• Investors bought shares of stock
in company
• Investors began pooling money in
joint-stock companies
• If company made profit, each
shareholder received portion
Shares
Financing Colonies
• Profit, loss based on number of
shares owned
• British East India Company, one
of first joint-stock companies
• If company failed, investors lost
only amount invested
• 1600, imported spices from Asia
• Others formed to bear cost of
establishing colonies
Mercantilism
New Economic Policy
Intense Competition
• Founding of colonies, new
goods in Europe led to
significant changes
• Wealth measured by amount of
gold, silver possessed by nation
• 1500s, Europeans developed
new economic policy,
mercantilism  Nation’s
strength depended on its wealth
• Wealthy nation had power for
military and expanded influence
• Mercantilists believed there was
fixed amount of wealth in world
• For one nation to become
wealthier, more powerful—had
to take wealth, power away
from another nation
• Mercantilism led to intense
competition between nations
Colonies
Building colonial empires essential to mercantilist system
Colonies
Strict Laws
• European powers wanted to
establish colonies
• Monarchs restricted economic
activities in colonies
– To control sources of raw
materials
• Colonists could not sell raw
materials to other countries
– To provide new markets for
manufactured goods
• Could not buy manufactured
goods from other nations
• To a mercantilist, colonies
existed only to benefit home
country
• Strict laws forbade colonies
from manufacturing goods
• Forced to buy only from home
country
Balance of Trade
• Mercantilists built wealth two ways—extract 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
Imports
Exports
• To achieve favorable balance of
trade, could reduce amount of
imports by placing tariffs on goods
• Encourage exports that could sell
for higher prices than raw materials
• Importer paid tariff, added cost to
price of good
• Countries encouraged
manufacturing and export of
manufactured goods
• Imported goods more expensive,
discouraged people from buying
• Governments provided subsidies to
help start new industries
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
Effects of Economic Revolution
• Growth of towns
• Rise of wealthy merchant class
• Increased wealth of nations
HOWEVER…
• Most of Europe’s population remained poor
• Mainly rural
INCREASE IN MONARCH’S POWER  ABSOLUTISM!
What You Should Know…
• The effects of the Columbian Exchange (how did the new
foods, animals impact society?)
• The emergence of capitalism & its effects on European
economy
• Purpose of joint-stock companies
• Mercantilist system – goals of a country
• Importance of colonies to European nations
• Effects of Mercantilism
Effects of Economic Revolution
• Growth of towns
• Rise of wealthy merchant class
• Increased wealth of nations
HOWEVER…
• Most of Europe’s population remained poor
• Mainly rural
INCREASE IN MONARCH’S POWER  ABSOLUTISM!
What You Should Know…
• The effects of the Columbian Exchange (how did the new
foods, animals impact society?)
• The emergence of capitalism & its effects on European
economy
• Purpose of joint-stock companies
• Mercantilist system – goals of a country
• Importance of colonies to European nations
• Effects of Mercantilism
Effects on Africans
• Introduction of guns
• Conflicts among tribes
• Loss of population due to enslavement
– Mostly men lost – lack of food, defense
• Poor treatment in Middle Passage, slavery
Effects on Natives in New World
• Introduction of guns
• Introduction of horses, pigs, cattle
• Forced to learn new culture (especially Spanish
colonies)
• Missionaries spread Christianity
• Disease killed large part of population
• Loss of territory/became colonies
– Exploited for raw materials
• Encomienda system mistreated natives
Effects on Europeans
• Merchants gained wealth & power from increased trade
• Capitalism led to individual wealth
– BUT most Europeans remained poor
– WHY?
• Inflation!!!
• Mercantilism led countries to become wealthy
– Increased control over colonies
– Pride in one’s country  Nationalism
– Increased power of monarch = Absolutism!