Mercantilism I IntroductionReview Exploration European Colonization Trade Networks

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Mercantilism

Mercantilism

I. Introduction/Review Exploration European Colonization Trade Networks Mercantilism Rivalry Among European States

I. Introduction/Review Exploration European Colonization Trade Networks Mercantilism Rivalry Among European States

II. Background 1. Mercantilism was an economic “system” that developed in Europe during the

II. Background 1. Mercantilism was an economic “system” that developed in Europe during the period of _______(c. 1500), and developed with the rise of the _________ (c. 1600 – 1700). 2. It was NOT a strict economic theory with ________.

3. Underlying principles: 1. The amount of wealth in the world is ___________. 2.

3. Underlying principles: 1. The amount of wealth in the world is ___________. 2. A country’s wealth was based on _____________. 3. A favorable balance of trade meant: ____________. 4. A large population valuable because____________. 5. The crown or state should have a _____ role in directing the ________ & _________economies.

III. Merchant Capitalism 1. A term applied to merchants because they _______&_______ from it.

III. Merchant Capitalism 1. A term applied to merchants because they _______&_______ from it. 2. This is the earliest phase of _________. 3. Mercantile era drew to a close around ____, giving way to________.

IV. Pre-Mercantilism 1. A reaction again the economic problems of the period when: a.

IV. Pre-Mercantilism 1. A reaction again the economic problems of the period when: a. States were too weak to _____________. AND b. When towns levied their own _______ on goods passing through their borders.

V. New Monarchies of the late 15 th& 16 th c. 1. New monarchs

V. New Monarchies of the late 15 th& 16 th c. 1. New monarchs readily accepted mercantilism because ___________________. 2. Examples: a. Spain (Charles I & Philip II) b. England (Henry VIII & Elizabeth I)

VI. Proponents of Mercantilism 1. Adherents to absolutism: 1. Stuart Monarchs: 2. Oliver Cromwell:

VI. Proponents of Mercantilism 1. Adherents to absolutism: 1. Stuart Monarchs: 2. Oliver Cromwell: 3. Jean-Baptist Colbert, France, & Louis XIV: a. Colbert embraced Mercantilism b/c his ultimate goal was to_____________________. b. Biggest obstacle for France = __________. c. France would prosper only if_____________.

VII. Resulting Rivalry: France & the Dutch 1. Colbert’s anti-Dutch strategy came from his

VII. Resulting Rivalry: France & the Dutch 1. Colbert’s anti-Dutch strategy came from his beliefs on ______ economy. 2. He believed the volume of world trade was _______, so for France to increase its share meant: ________________________________________. 3. Setbacks from difficulties in war strained the French economy. 4. At Colbert’s death, France was on the road to ________.

VIII. How Mercantilism Affected European Colonies 1. Led to enormous ________, which __________________________. 2.

VIII. How Mercantilism Affected European Colonies 1. Led to enormous ________, which __________________________. 2. Colonies were to supply _____ & _____ to the Mother country then colonies were to be markets for ___________. 3. This balance-of-trade was thought to _______. 4. Belief: no great nation could exist & be self sufficient without______________.

IX. Britain and its Colonies 1. England began the first large-scale approach to mercantilism

IX. Britain and its Colonies 1. England began the first large-scale approach to mercantilism during ________. 2. British gov demanded trade in gold & silver bullion, seeking a _______. 3. Colonies lacked sufficient bullion to circulate in their markets, so issued _________, resulting in periods of inflation. 4. This relationship b/t Britain and American colonies would contribute to the Revolutionary War.

X. British Trade Laws Based on Mercantilism 1. Navigation Acts – 1660 s. 2.

X. British Trade Laws Based on Mercantilism 1. Navigation Acts – 1660 s. 2. Laws designed to make colonists dependent on________ from England. 3. Established “protected” goods that could ONLY be sold to British merchants, e. g. ______________. 4. Again, this economic arrangement would contribute to the Revolutionary War.

XI. Opponents of Mercantilism 1. During the 18 th century the _____ of mercantilism

XI. Opponents of Mercantilism 1. During the 18 th century the _____ of mercantilism became increasingly obvious. 2. Louis XIV’s failures revealed the limitations of the state directing the economy for its frequently ____, if not ______-_____ purposes. 3. Merchant Capitalism reached a level within the mercantilist system where state intervention/direction of the economy was _____ and even preventing ___________.

XII. Physiocrats 1. Intellectuals who were critical of existing Old Regime structures. 2. Influenced

XII. Physiocrats 1. Intellectuals who were critical of existing Old Regime structures. 2. Influenced by ________ ideas. 3. Applied “natural laws” doctrines to the _______.

XIII. Lassiez-Faire 1. A theory arguing the economy functioned best when it’s own __________

XIII. Lassiez-Faire 1. A theory arguing the economy functioned best when it’s own __________ were allowed to function without _____________________. 2. David Hume 3. Adam Smith

XIV. Rise of Capitalism: the Dutch, Market Economy and Joint Stock Companies 1. “Capitalist”

XIV. Rise of Capitalism: the Dutch, Market Economy and Joint Stock Companies 1. “Capitalist” in the mid-17 th century referred to how some people used their money. a. Invested their money to make money b. Most lucrative business opportunity for them? __________.

2. The Dutch a. Led the way in implementing capitalist ideas as they engaged

2. The Dutch a. Led the way in implementing capitalist ideas as they engaged in ___________. b. Built warehouses to store goods so they could __________________________. c. Netherlands became the leading ___________ in Europe in the 16 th century. d. Amsterdam is the site of the first ____________.

3. Joint-stock companies & the global network of trade: a. A new economic structure

3. Joint-stock companies & the global network of trade: a. A new economic structure that allowed ordinary investors to buy shares in _______ that were run by a board of directors. b. Easier to __________ c. English and Dutch joint-stock companies ______ trade in Asia. d. Private companies with remarkable_____ e. Generated huge profits, and contributed to the early formation of _________________.

The creation of the British East India Co. was the quintessential mark of mercantilism

The creation of the British East India Co. was the quintessential mark of mercantilism and economic exploitation and mastery of trade by western civilization. The company made Great Britain an international giant.

XV. A New “Money” Economy 1. New World mines run-out of easily mined silver.

XV. A New “Money” Economy 1. New World mines run-out of easily mined silver. 2. Bartolome Medina (a Spaniard) figures out a process and: 3. The amount of silver leaving the New World explodes 4. Silver from the New World is used for global trade. a) this is the worlds FIRST universal currency b) this is the true beginning of economic globalization

4. Amsterdam • Dutch control ½ of all global shipping • Wealthiest country on

4. Amsterdam • Dutch control ½ of all global shipping • Wealthiest country on the planet • New wealth creates a demand for luxuries • Merchants are innovators and become “speculators” (Buying a product before it has been harvested – in this case tulips. )

XVI. Looking Forward: Britain and the Industrial Revolution 1. By 1860 England had removed

XVI. Looking Forward: Britain and the Industrial Revolution 1. By 1860 England had removed the restrictions of the mercantile era. , e. g. __________________________. 2. Because of its ________ policies, England became the dominant _______________ in Europe.