Section 3

New Patterns of Trade

Main Idea: The colonies in the Americas led to the exchange of new goods, new patterns of trade, and new economic systems

The Columbian Exchange

-The European and Native cultures changed dramaticallyàColumbian Exchange

-Europeans got new foods (potatoes, corn, turkey)

-Natives got coffee, oranges, rice, wheat, cattle, horses

-Effects

-Some crops became staples for each culture

-Some crops became economic money maker (coffee)

-Horses and cattle introduced to new world

-Diseases

-Natives had no immune to European diseases

-Smallpox, TB, malaria, flu, measles

-Died by the millions

-Major epidemics

Mercantilism

-European economy changed with new lands

-Mercantilism

-Strength = wealth

-Fixed amount of gold/silver in the world

-To become powerful, had to take more gold than give out

-Sometimes became violent

-Balance of trade

-Had to sell more than what you bought (bring in more gold than what you give out)

-Reduce imports

-Tariffs

-Export goods that cost more money

-Finished products more expensive than raw materials

-Govt’s provided subsidies to start new industries

-Control areas with lots of raw materials and people

-Don’t have to buy anything

-Can sell to own people (money stays in)

-Countries established colonies

-Colonists could only buy/sell to mother country

-Wealthy merchants emerged

Rise of Capitalism

-Capitalism = economic activity carried on by private individuals/businesses

-Goal: make a profit

-Prices rose over time because demand outweighed supply

-Inflation

-Prices also rose because of more gold coins in circulation

-Joint-stock company

-Investors pool money to fund large businesses

-Bought shares of stock

-British East India Company (1600)