Economic
New World

agrarian society
80% lived and worked on the land
Also large scale farming
Sugar, tobacco, cotton
What happens to prices when other
countries get involved?
Mining became very important
Gold and Silver
Silver is GOOD

The Spanish system was based upon silver.
Potosi: Peru largest mine of all
Continuous wealth was flowing into Spain
Treasure ships made a regular round
Galleons
And flowing out of Spain. . .
AND MOSTLY TO CHINA
Silver is BAD

 The massive amounts of silver flowing into Europe
had caused inflation.
 Treasure never accounted for more that 25% of
Spain’s revenue…so it depended more on taxes than
treasure
 Because thee was so much silver flowing into Spain,
bankers kept loaning the government more many
because they assumed they could make a profit on
the silver.
 So why did Sancho de Moncado write in 1619 the
“the poverty of Spain resulted from the discovery of
the Indies.”?
Trade

Controlled very closely
All trade done through the part at
Seville and only the Spanish could
trade with Latin America
Monopoly
Able to keep prices high
Encomiendas

 Grant of indigenous people to individual Spaniards
 given to conquerors, which allowed them to use local
inhabitants as laborers
 Practice quickly ends to prevent growth of a new-world
nobility
 What does this system remind you of?
Haciendas

Spanish ranches and rural estates
 Developed due to a decrease in Indian population
Owning Land and not people
Bases of wealth and
power for the local
aristocracy
Plantation Economy

Gold and Sugar
 Both very labor intensive
 Slaves were needed to do the work
 By 1800 150,000 slaves had been brought
 ½ of the total population
Like Spain, Portugal had little or no industry of
it’s own, but with the gold, they could buy
whatever they needed.
But what will happen when the gold runs out?
GOLD

Found by woodsmen near Sao Paulo
Paulistas
Opened the interior to settlement which
was devastation for the Indian population.
Opened new areas for mining and
ranching
Biggest problem…Portugal had a trade
imbalance on it’s hands…how?
sugar

 Worlds leading sugar
producer
 Combo agricultural and
industrial
 Cut the Sugar
 Turn the sugar into
something usable
 Large number of workers
for VERY hard work
The Slave Trade

The Atlantic
 12 Million Africans shipped out
 10-11 millions made it alive
 So many were needed as a continuous supply.
 Mortality and low birth rate
 Needed to replenish
Other slave trades
 Trans-Saharan
 Red Sea
 Muslims in East Africa
Keep in mind

Europeans used the fact that Africa already
had slavery as a justification
 Used many ways, and on many levels
 Trade allowed the existing systems to expand and
develop
The growing divine authority of the African
rulers paralleled the rise of absolutism in
Europe
 The development of new political forms
Who was in control?

Control of the Slave trade often reflected
who had European Control at the time
 Portuguese until 1630: Supplying Brazil
 Dutch 1637-1660: They took control of El Mina
 English: needed fro their growing colonies
 Royal African Company
French: Start by not major until 18th
Century
Who did they trade?

West: The Atlantic trade
 Young men for hard labor
 Changed the demographic of the region
 More men in America
 More Women in Africa
East: The Trans-Saharan trade
 Muslim traders
 Women
 Domestic help and concubines
The Middle Passage

Triangle Trade

 The major way Africa was linked to the increasingly
integrated economy of the world
Was it Profitable?

Some say it was so profitable that there were
major elements in the rise of capitalism and
the origins of the Industrial Revolution
Like other things it appeared more profitable
than it really was
The trade itself may not have given the most
money
The industry that came out of the slave trade
WAS VERY PROFITABLE