Economic History - AP World History: Modern

During the Columbian exchange, domesticated animals such as cows, horses, sheep, and goats, along with products such as wheat, sugar, and coffee were brought from the Eastern Hemisphere to the Western Hemisphere. Similarly, products such as Cacao, Potatoes, Corn, and Tomatoes were brought to the Eastern Hemisphere from the Western Hemisphere.

The tropical climate of Indonesia was such that large numbers of spices could be grown and harvested on plantations. Although originally started by the Portuguese, by the 17th century the Dutch dominated the spice trade. None of the other goods listed were found in great quantity or even at all throughout the islands.

The triangular slave trade consisted of enslaving people from West Africa for sugar in the Caribbean, then trading sugar for rum and manufactured goods in New England and Europe, before returning to Africa to trade that for more slaves.

The Triangular slave trade was an Atlantic Ocean phenomenon whereas Chile is on the Pacific coast of the Americas.

Salt was not a central good of the Triangular slave trade.

The Triangular slave trade existed for hundreds of years but was largely finished by the industrial revolution.

The Caribbean was not a major source of gold, especially compared to West Africa.

The Spanish conquest of Manila (in the Philippines) in 1571 was instrumental in facilitating the trade of silver between Spanish America and China. Silver, during this time period, was extremely valuable and in extremely high demand in Chinese society and most of the world’s supply of silver was coming from immensely profitable silver mines in Spanish owned South America.

Portugal was the first Western European nation to embark on a determined campaign of oceanic voyaging and discovery. In 1415, Prince Henry, known as the “the Navigator,” led the first of these voyages, sailing to Africa and capturing the city of Ceuta. Emboldened by his success, Prince Henry and other Portuguese explorers embarked on a studied campaign of oceanic voyages, progressively making their way down the African coastline and across the Indian Ocean to Asia. Much of the initial motivation for such voyages, which were quite expensive, not to mention deeply dangerous, came from the Portuguese government’s desire to find a way to overcome the Venetian monopoly of the lucrative spice trade. In Europe, spices such as pepper, cloves, ginger, and cinnamon were widely coveted, but these savory treasures could only be obtained from Asia, through the endeavors of Muslim and Ottoman merchants. These merchants, in turn, sold their wares to Venetian traders, whose ideal geographic location ensured that the Italian city-state had a near-perfect monopoly upon the spice trade. The enterprising minds in Portugal’s government and business class were not content with simply tolerating this Venetian stranglehold, but they also knew that the overland trade routes to China and India (such as the famed Silk Road) had by this time become far too treacherous to ensure any safe and profitable deliveries. So, under the inspired leadership of Prince Henry, Portugal turned to oceanic voyaging instead, hoping to sail directly to African, Muslim, and Asian markets to obtain the prized spices themselves.

The Spanish were inspired by Portugal’s ambitious program of oceanic discovery but were determined to improve upon their nearby rival’s successes by seeking their own unique oceanic route to the rich Asian spice markets. Instead of traversing the Indian Ocean, the Spanish believed that by sailing across the Atlantic Ocean, they would be able to reach India at a much swifter pace, where ample spices, gold, silver, silks, and other highly prized luxury items would be theirs for the purchasing. These desires led the Spanish crown, especially under the ample patronage of King Ferdinand and Queen Isabella, to commission the voyages of Christopher Columbus, Amerigo Vespucci, and Francisco Magellan, whose journeys would begin the European discovery and conquering of the so-called New World. In time, many European nations, including the British and French, would seize large portions of the Western Hemisphere by force, exploiting the land’s natural resources and native populations in equally ruthless terms. The Spanish Empire would become the most notorious, as its ever-increasing lust for gold led to the vicious conquering, enslavement, and wholesale slaughter of millions of Native Americans. The European markets remained willfully blind to these sufferings, as they wallowed in the new sources of gold, silver, spices, and various food items steadily extracted from the New World.

During the seventeenth century, the United Provinces of the Netherlands experienced an expansive economic boom that elevated its economy alongside that of Europe’s most powerful and prosperous nations. There were several reasons for this economic growth. First of all, the Netherlands had more cities, with a greater urban population, than any other European country at the time. These cities were made possible by an innovative new agricultural technique that the Dutch developed: they drained coastal land of all sea water. The fresh earth that was revealed by this technique was especially rich, moisturized, and fertile, which made it perfect for growing all sorts of crops (including the world-famous tulip bulbs). The Dutch also had a long history of trade with other regions, which was made possible by their skillful knowledge of ship building and sailing. In the seventeenth century, the Dutch put this knowledge to good use and began to establish their very own colonial empires overseas. They sought out East Asia, specifically the islands of Java, the Moluccas, Sri Lanka, and Indonesia, renowned for their costly spices. In order to produce, control, and transport these spices, the Dutch established the Dutch East Indies Company in 1602. In time, this company would grow so powerful that, through its extensive networks of farming and trade, the Netherlands would have a virtual monopoly on the East Asian spice trade which would last until the end of World War Two. Also vital to Dutch prosperity was the establishment of the Amsterdam stock exchange, which would remain Europe’s primary method of financial transactions even as the Netherlands lost all their other elements of prosperity during the mid-to-late eighteenth century.

The Spanish Empire grew immensely wealthy from their control over Latin America - although it is worth noting that much of this wealth eventually found its way to bankers in England and the Netherlands, leaving Spain desperately poor by comparison. Much of this wealth was drawn from extremely profitable (and extremely brutal) silver mines in modern-day Peru and Bolivia.

The first contact between European civilization and Japan occurred in 1543. Soon after Portuguese traders and merchants in East Asia arrived in Japan and began trading with the local population. The Portuguese monopolized trade with East Asia in the early years of European exploration and colonialism, but were soon joined by the Dutch, the Spanish, the English, and the French. Trading between Japan and Portugal continued for another half-century, until the Tokugawa Period of isolationism began in Japan.

Joint-stock companies first emerged in Europe during the medieval period and became more common during the sixteenth century and the first wave of European exploration and colonialism. Joint-stock companies were created so that investors could pool their resources and negate personal risk. The Muscovy Company in London and the English East India Company are two early examples of joint-stock companies that were created to facilitate and monopolize trade.

The Hanseatic League was a loose confederation of guilds and market towns in northern Europe. It was first established in the fourteenth century and continued to be influential until the early nineteenth century. The Hanseatic League was created to protect the economic interests and sovereignty of cities and towns in northern Europe.

The Hanseatic League was a confederation of guilds and market towns in Northern Europe during the early modern period (1358-1800). It controlled much of the trade in the Baltic Sea and maintained an army for the mutual protection of towns and cities in the league. The primary goal of the Hanseatic League was to protect and encourage trade in Northern Europe.

The vast majority of the profitability of Portuguese colonies in Brazil was initially derived from massive sugar plantations. Much later, in the nineteenth century, Brazil would derive much of its wealth from rubber plantations.

Almost all of the trade in the Indian Ocean was dominated by Arab traders in the centuries leading up to the era of European exploration. In the fifteenth and sixteenth centuries, with the invention of the caravel and the establishment of Portuguese trading outposts throughout the Indian Ocean, the Portuguese began to take over maritime trade in the Indian Ocean.

Timbuktu is located in the modern state of Mali, in West Africa. For several centuries during the Medieval period Timbuktu was one of the largest and wealthiest cities in the world. It was an important city in the empires of Songhai and Mali. Much of Timbuktu’s wealth was derived from its status as a trading city - gold, ivory, and salt were all traded in large quantities.

Tulip Mania, which occurred in The Netherlands during the Dutch Golden Age from 1619-1622. It resulted in widespread speculation and over-investment in tulip bulbs throughout The Netherlands before the collapse of prices in 1622. At the peak of this phenomenon a single tulip traded at ten-times the average yearly salary of a skilled craftsman.

Adam Smith was a prominent academic in the 1700's. He is considered to be the father of the field of economics. He was a prolific writer and theorist on the subject of wealth and how nations economic policies affect each other.

Wealth of Nations was a book written by Adam Smith in 1776. In it Smith describes the outline for how a nation becomes wealthy and how the division of labor falls within a wealthy vs. non-wealthy society. This book is considered a seminal document in the development of free-market capitalism.

Smith was an advocate of the idea that a nation could only be wealthy by taking advantage of another nation. He said that since wealth is relative, for a nation to be perceived to be wealthy, it must make another nation poor by comparison. Thus he said the colonial system worked to the benefit of the home nation and at the expense of the colony itself.

As the name might suggest, the Industrial Revolution brought industry to the fore as the main economic power. Merchants and traders wealth were no longer the standard to be measured by as the captains of industry amassed more wealth than the world had ever seen before.