1. Changes Within Europe: Government and Economics

2. ECONOMICSECONOMICS

3. Characteristics of Mercantilism 1. Power = wealth [gold or silver bullion] Export more than you import [a trade surplus]. Export more than you import [a trade surplus]. 2. Needs = A strong state to control economics 3. Sea power = control foreign markets.

4. Characteristics of Mercantilism 4. Colonies = provide markets for manufactured goods & a supply of raw materials. 5. Trade is a “zero-sum” game. Manufactured goods Raw materials Mother Country Colony Cheap labor

5. Capitalism: a.k.a. Laissez Faire Economics £ Adam Smith (1723-1790) £ If individuals were allowed to seek personal gain, this would increase the general welfare. £ 1776  wrote The Wealth of Nations £ First book to explain the economy of a nation as a system £ Nation’s wealth is not in the amount of gold/silver but the amount of goods and services produced by a nation’s people.

6. 1.Individuals driven by self-interest 2.The “Invisible Hand”  the economy is self-regulating! 3. The Law of Supply and Demand  Individuals free to pursue self-interest will produce goods and services that others want, at prices others will be willing to pay. You choose what you want to sell at prices others are willing to pay. You choose what you want to sell at prices others are willing to pay. Basic Capitalist Principles

7. GovernmentGovernment

8. Absolute Monarchy £ Absolute Monarchy =  A ruler with total power  Ruler backed by “divine right” (God-given right to rule) »Everyone believes the theory during this period »If you question the king, you question God  Tried to create trained bureaucracies, usually using the new middle class (bourgeoisie)

9. Louis XIV £ Best example of an absolute monarch £ "L'État, c'est moi" (I am the State) £ Called “The Sun King.” (b/c he gave light and life to his subjects). £ Often shown as the Sun God Apollo £ £ Maintained Versailles at a total cost of 25% of France’s total national income

10. Ch â teaux de Versailles £ King’s residence and center of government. £ Nobles required to live there £ Able to keep an eye on nobles…& therefore, power

11. VersaillesVersailles

12. Henry VIII of England £ Broke with the Catholic Church b/c Pope wouldn’t grant him a divorce from his first wife – he wanted a male heir £ Founds and makes himself head of the Anglican Church (Church of England) £ Example of a monarch exerting personal power

13. Constitutional Monarchies £ Some European nations developed Constitutional Monarchies, instead of Absolute Monarchies £ England is the best example £ English Civil War – 1640s – fought over who would hold more power, the King or the Parliament £ Parliament wins out (and chops off Charles I’s head)- - they would eventually rule TOGETHER  William and Mary established a constitutional monarchy  Limits on royal power increased  Establishment of the English Bill of Rights

14. Balance of Power Idea that Europe would remain more stable if no one family/nation had too much power  Nations had quickly shifting alliances to prevent too much gain  European nation-states’ boundaries and identities being built at this time