Chapter 16
The World Economy
Welcome to the Beginning of the
Modern Era!!!!!!!
• Early Modern Era: 1450-1750
• During this time frame:
– Ottomans: 1453
– Western Europe: 1434-1492
– China: 1433
• This is a time of change and transition
• No significant global change to gender
roles/relationships anywhere in the world
Power Shifting
• Consequences
– Not only a power shift to the West but also a
redefinition of how societies interacted
The West
• Iberian Peninsula (Catholic) had firm control
over most of South America
• Others
– France: Crossed Atlantic first and explored the
Great Lakes Region and Canada
– British: Really wanted to find the NW Passage.
• Did some exploring in the Hudson Bay but started
colonizing North America
– Dutch: Competed with Portugal in SE Asia
• Established settlements in Southern Africa
Colonial Land Holdings
Trading Companies
• Companies given governmental monopolies
on trade in a designated region
• Not really regulated but the home
government
– Were able to create armies and their own money
to protect their interests
– Almost like independent governments in the
region
• Example: British East India Company
Gunpowder Empires
• Who’s included?
– Western Europe (Spain, Portugal, France, Great
Britain)
– Asia: (Ottomans, Mughals, Russians)
Columbian Exchange
• Many consequences
came with this
• Disease  Europeans
had to build a new
population
• Crops  Better
nutrition and easier
food means more
people
• Animal Husbandry 
better labor
Imbalanced Trade
• Centers of Exchange:
– Old: Indian Ocean
– New: Atlantic Ocean
• Muslim trade remained active
– Ottomans never able to catch up with the West
– Lepanto
• Asian trade was still well established but on a
small scale and very controlled
Moving toward a World Economy
• Western Europe established seafaring
– ALSO they developed manufacturing
– They needed cheap raw materials so they can make it
into expensive finished goods
• Mercantilism
• Core-dependent system:
– Not most of the world
– VERY important concept
• Coercive Labor System
Core-Dependent System
• Core Nations  the empire that gets the raw
materials from the dependent areas to
manufacture
– Control the making and the shipping
• Dependent Areas  provided the raw
materials and nothing else
– Had to depend on the core
– Latin America and parts of Africa
– Relied on cheap production of unprocessed goods
Colonization
• Why were colonizes so significant to the
changing world?
• Effects:
– “international inequality”
• Slave trade/coercive labor
• New social/ethnic classes