Economics
Nikolai Vorobiev, Robert Monyek, Will Meland, Craig Smith
Economics 1450-1648:
New technologies brought a wave of colonization and exploration. These new colonies brought a great deal of wealth
to Europe. However, Europe was faced with the social and economic strain that this wealth brought to those who
could not afford the luxury goods.
The European desire to get goods from Africa and India drove exploration and colonization
Through exploration and the trading of goods, Europe was able to discover the New world and set up trade networks.
There was an increase of luxury goods and gold/silver. The countries with the most economic power were able to
control the most variety of colonies for different goods.
● Columbian Exchange allowed for the exchange of goods between the New World and Europe
including disease
● Shift in economic power from Mediterranean powers to Atlantic powers
● Focus on the mercantilist economic theory which is hard currency: gold and silver
● Colonial powers included English, Spanish, Portuguese, Dutch, French.
Society and everyday life was shaped by the new economic markets but was plagued by the preexisting
medieval social and economic structures.
With the wealth brought in by exploration, the gap between rich and poor increased. Many people were forced to the
street to beg for money. The rich enjoyed the wealth that was brought from exploration. However, the existing social
and economic structures made it difficult to change economic processes
● Price Revolution- an increase of the price of many goods and services, causing the increase of
poverty due to the higher cost of living
● Food shortages occurred due to the higher price of grain, therefore causing the diets of many to be
deteriorated.
● The increase of beggars strained the current systems in place for those who needed charity.
● Family remained the dominant unit of production whether it be children helping their artisan parent
or helping out with the farm work. Men and women generally performed separate tasks, and
marriage was used as an economic strategy.
Analysis:
The technology that facilitated the increase in exploration caused the economic changes that occurred. Through the
Columbian exchange and other markets, the new world brought many resources, but that only increased the gap
between the rich and the poor. Many people were forced to take the street because of the price revolution. The
prices of goods and services increased significantly but the wages of the poor, unskilled laborers didn’t. The family
continued to be the economic unit of production. The increase of goods from the new world would eventually cause
the need for slave labor to keep up with the economic stimulation.
Economics 1648-1815:
European countries were starting to get more resources and markets for their goods through the colonies that they
made. The colonies provided areas for the countries to sell more of their goods allowing for more wealth to be
distributed in Europe. Also many countries were practicing mercantilism, so the colonies were exporting huge
amounts of silver and gold to Europe.
Early modern Europe developed a market economy that provided the foundation for its global role:
Europe was able to spread its influence outside of Europe because of the new colonies. The market economy lead to
new financial practices that were not around before this era. The market economy allowed for a more centralized and
dominant state due to these new financial practices.
● Trade was freed from Le Chapelier laws and also market-driven wages and prices
● Food and other agricultural products were increased due to the Agricultural Revolution
●
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The putting-out system allowed for more labourers in homes and a higher number of products to be
put in marketplaces
New financial practices such as insurance, banking, and property rights were created
The European world-wide economic network contributed to the agricultural, industrial, and consumer
revolutions in Europe:
The new ability of the Europeans to have constant contact with colonies in the New World and into Asia allowed for
new products to be made, and also for Europeans to be able to have products that were olnly found outside of
Europe.These new products led to a consumer culture in Europe.
● Mercantilist policies were used by many countries in Europe which then exploited the gold and
silver found in the New World
● As a demand for New World products increased so did the slave labor needed. The Middle
Passage, Triangular Trade, and plantation economies in the Americas were all greatly impacted by
this
● Overseas products became more popular in Europe. Examples of this is sugar, tea, silks, tobacco,
and coffee
● The new food products allowed for there to be an increase of food supply in Europe
● New colonies allowed for new resources to be found and exploited
Commercial rivalries influenced diplomacy and warfare among European states in the early-modern era:
During this time it was vital to have a presence in the Atlantic to be a European power. This caused problems
between countries like Britain, France, the Dutch, and the Portuguese. All of these countries wanted to have power
and this lead to conflicts in the New World.
● European powers wanted to have as much influence in the Atlantic because the more influence
they had the greater power they had
● Portuguese, British, French, and Dutch rivalries in Asia led to the British controlling much of India
and the Dutch having the most influence in the East indies
Analysis:
The development of the market economy led to new financial practices like banking and insurance that show the new
sophistication of the European countries. These new financial practices are still extremely important in the world
today. The new colonies that European countries had allowed them to be able to have a larger economy. The
colonies provided new markets as well as resources. Gold and silver found in the New World was able to support
mercantilist policies many countries practiced during this time. Slave labor became necessary to support the growing
economy that was in Europe. This led to the Middle Passage and Triangular trade became popular. The European
economy was growing at an extremely fast pace. The fast pace of the growing economy allowed for people to take
advantage of it with new systems of making goods like the popular putting-out system. This period of economic
growth may have been the most rapid in the history of Europe.
Economics: 1815-1914
The industrial revolution carried on to the second industrial revolution and it quickly spread throughout the continent.
After problems arose from competing countries in economics governments protected and promoted their industries
through any means possible. From this new type of industrialization new economic
The spread of industrialization to the continent where the state played a bigger role:
Great Britain had already industrialized, but the continent was just beginning to catch up(Great britain showed how far
ahead they were with the crystal exhibition of 1851). It spread to France and Germany from 1850-70, and Russia in
the 1890s.
● France was more gradual due to the legacy of the French revolution
● Germany lacked political unity, but Prussia took charge by creating the Zollverein(trading network across
Germany) and new transportation
● The creation of Germany in 1871 made transaction across Germany easier
●
The continental states wanted to assist and protect their economies as much as possible so they created
tariffs, colonies, new transportation and education
The second industrial revolution changed everyday life:
With a new type of economy came a new type of social divisions, problems and classes (a result of the economics at
the time). For the first time the bourgeois were the leading economic class, and unions told governments to stop bad
workplace conditions. Also, the work schedules and workplaces became separated from leisure time and the home.
● The quality of life was enhanced through new transportations, medical care and stores
● Unions pushed for laws that supported workers to be passed(Ten hours law of 1847)
● Governments created things like parks and stadiums so people could have leisure time when they weren't
working and they wouldn’t organize a union.
Industrialization created responses in ideological, governmental and collective forms:
Ideologically conservatism, liberalism, socialism, and nationalism were all results of industrialization. Collectively
unions were created to give workers a common voice, and feminists/suffragettes were created to demand rights.
Actions like striking were used to meet these demands. The government usually opposed unions and supported
nationalism. The government also made workers happy through creating reforms in the workplace.
● Liberalism believed in economics with no government participation and John Stuart Mill was very important
in leading it.
● Socialists called for an equal distribution of resources. The view of this changed over time from a utopia to a
marxist critique.
● Pressure from unions created government reforms. These reforms created infrastructure that made the
workplace more sanitary and a better place to work.
ANALYSIS: Starting in 1815 the industrial revolution starting to move faster on the continent of Europe and Britain
continued to dominate. As time went on continental powers gained more economic power(France gradually after the
French revolution and Germany after uniting). In the 1870s the economy fluctuated widely due to the variety of
financial markets in Europe and the continental states created tariffs to help their own industrial development. Also,
the second industrial revolution created a regimented type of lifestyle, one that was based around a schedule of work
and after work leisure. New social classes were developed as well and led to the rise of the Bourgeoisie and unions
caught a foothold of power. Industrialization also forced governments to create new reforms in and out of the
workplace that would please workers and prevent them from revolting (this didn’t happen in 1848). Finally, new
ideologies such as socialism, liberalism, nationalism and conservatism were created as a result of the industrial
revolution. Nationalism would create more colonial expeditions from European countries that would be one of the
long term causes of WWI and the economics after the it.
Economics: 1914-Present Day
-Focus on shifts from economic integration into society (globalization of mass markets and newer innovations
stemming from the explosion of Imperialism)
-GERMANY: -Weimer Republic- Falling into economic trouble with debt repayments after the Treaty of Versailles
(1919)
*Led to Germany’s immense reparation fees that shifted distribution of economics to a mass global scale - Germany
loses money, borrows from us, we lose money to Great Britain and France, etc.
LEADING UP TO GREAT DEPRESSION IN OCTOBER 1929 (FACTORS)
Inflation Pressures - Rations of cash and borrowing loans for post-War recovery between nations
Disrupted Nations - Newly introduced markets risky and unpredictable, inexperience in marketplaces
Agricultural Decline - Loss of grain, vital and essential to global economic stimulation (war rations)
Economic Nationalism - Lots of tariffs, protection of national identity and pride
Reparations - Heavy debt and payments towards rebuilding society that disrupts investment policies
Credit Financing - Easier to ‘buy on margin,’ putting strains on value of stocks and leading to a fragile market
MAJOR IMPACT: The Great Depression showed the economic deprivation of a modern society, where all of a
sudden values of currency plummeted as they soon didn’t matter, world thrown into chaos (mixed responses, turned
the world away from national standards and export situations that led to isolation and other issues to worry about that
would lead to the Second World War). As the Great Depression spread worldwide, soon people would turn to anyone
for answers, with economic downturns leading to the rise of Totalitarian leaderships. As these groups became more
violent through the promise of economic change, soon global chaos would ensure to put economics back on the map.
Second World War and Economics
United States Became a Superpower - With the massive hole that the United States dug itself with the Great
Depression, the rise of military weaponry and our funding to create it put the US back on the map, giving us an
economic boost leading us to become the most important European power in the later Great War
Everyone Else - Considering the fall of Nazi Germany in 1945, as well as German offensives such as Blitzkrieg
warfare, there was heavy destruction across Europe that led to a necessity for global currency redistribution as well
as financial aid and support for Europe
Marshall and his Plan - The Marshall Plan represented the embrace of the United States into aiding the world,
providing financial support not only to block the Soviet spread of communism but to push the world back into its fixed
puzzle position by giving money to countries to stabilize and return
*THE IDEA OF SELFISHNESS WAS GONE - UNITY WOULD LEAD TO VICTORY
Post-1945: Rise of Unity and Similarity
1949: With the formation of NATO, the world’s economies began to unify; the world finally saw themselves coming
together in aid to support one another and try to become a mass Europe instead of a bunch of small, isolated nations.
1992: Later, though important, the European Union founded an economic institution that develops the idea of a single
market shared throughout Common Europe, which was also influenced by the European Coal and Steel Committee
that allowed for cross-sharing of resources and industries that allowed for economic turn to increase.
1999: With the founding of the Euro, Europe was finally a unified nation under a single currency, and no longer were
economics so drawn out and complex but rather Europe was unified under a single name, and finally European
economics could be maintained as a single continent and economic crises were finally brought to a unified finale.
ANALYSIS: From 1914 onwards, there grew a trend of growth during warfare and then calamity when it came to
wartime repayments. When the United States and other nations fell after the first World War, quickly the idea of
European Unity came into play, and as countries began to unify under agreements such as NATO with the Marshall
Plan and the EU, economics began to stimulate and the modern European unified system was finally birthed into the
machine it is today.