The Columbian Exchange and Global Trade Chapter 4 Section 4

I. The Columbian Exchange A. Columbian Exchange 1. Columbian Exchange-was the global transfer of foods, plants, animals during the colonization of the Americas

A. Columbian Exchange 2. New plants were tomatoes, squash, pineapples, tobacco, corn, potatoes and cacao beans (for chocolate) 3. An important animal was the turkey

A. Columbian Exchange 4. The introduction of the white potato and the most important food to come from the Americas. “sweet potato & white potato did more for the Irish and the Chinese than the deeds of a 100 kings”

II. Global Trade A. Rise of Capitalism 1. The new wealth created from the resources of the Americas and trading practices dramatically changed the economic atmosphere of Europe

A. Rise of Capitalism 2. Capitalism is an economic system based on private ownership and the investment of resources such as money for profit

A. Rise of Capitalism 3. Not only governments but merchants began to obtain great wealth which allowed them to invest into other businesses building greater financial power

A. Rise of Capitalism 4. As a result people had more money and therefore demanded more goods. Since the supply of goods was less than the demands prices skyrocketed

II. Global Trade B. Joint Stock Companies 1. Joint-stock companies-this is when investors buy shares of stock in a company; it involved a number of people combining wealth for a common purpose

B. Joint Stock Companies 2. This allowed investors to share the loss or gains for any colony that they invested in.

III. The Growth of Mercantilism A. Balance of Trade 1. Mercantilism-this held that a country’s power depended mainly on its wealth. This wealth allowed countries to build strong navies and purchase vital goods

A. Balance of Trade 2. Power could be obtained in 2 ways- 1. obtain as much gold & silver as possible & 2. establish a favorable balance of trade-meaning selling more goods than it bought

A. Balance of Trade 3. Main goal of mercantilism was to become self-sufficient and not depend on other countries for their goods-this is why colonization was so important