New Patterns of Trade The creation of colonies in the Americas and elsewhere led to the exchange of new types of goods, the establishment of a new pattern of trade and new economic systems.

How did exploration result in a new exchange of plants and animals? What was mercantilism, and how did it push the drive to establish colonies? How did global trade lead to the rise in capitalism?

Voyages launched large scale contact between the old world and the new.Voyages launched large scale contact between the old world and the new. Interactions with the Natives led to sweeping cultural changes Contact between the two groups led to the widespread exchange of animals, plants, and diseasesContact between the two groups led to the widespread exchange of animals, plants, and diseases

Exchange of food and animals had a dramatic effect on future generations Over time crops that were Native to the Americas became staples to Europeans The variety in food sources provided a substantial increase in nutrition, and is one factor for the increase in lifespan

CHINA: Arrival of easy to grow, nutritious corn helped population grow immensely Main consumer of silver mined in Americas Africa: Corn and peanuts now amongst the most widely grown in Africa Estimated that 1/3 of all crops grown in the world are Native to the Americas

No natural resistance to diseases brought to the Americas Population of Central Mexico may have decreased by more than 30% in the 10 years following first contact with the Europeans

What were 2 lasting effects (legacies) the Grand Exchange?

New Economic Policy Nations strength depended on its wealth Wealthy nations had power with military and expanded their influence

Theory and system of political economy in Europe after the decline of Feudalism based on: Accumulating gold Establishing Colonies Merchant Marines Developing industries and mining The colonies existed for the benefit of the motherland

Strict controls on trade to ensure prosperity for the motherland. Exports must be higher than its imports

A Nation that controls its own sources would not need to import from other countries Solution?

Colonies have resources England has finished goods

The Policies – ex. England Navigation Act - a series of laws which restricted the use of foreign shipping for trade between England (after 1707 Great Britain) and its colonies, which started in 1651 Currency Act- prohibited the American colonies from issuing paper currency of any form Declaratory Act- It stated that Parliament had the right to make laws for the colonies "in all cases whatsoever"

How do you think the colonies reacted to this?

Mercantilism basics: –Sell more goods than you buy MOTHER COUNTRY Colonies

A nations strength depends on its wealth as measured in gold and silver Only a fixed amount of wealth exists in the world, and nations have to compete for their share of the wealth A favourable balance of trade is important for gaining wealth Countries should seek to limit imports, and maximize exports Countries should have their own sources of raw materials Colonies exist to profit the mother country A countries colonies should not trade with other colonies

Rise in Prices –Investors took risks overseas because of inflation –Inflation: the steady increase in prices –Demand for good increased because of a growing population, scarcity of goods, driving prices higher. Industrial revolution

From Cottage Industry to 

VS.