Lec 8: Early Commercial Expansion

Question 1

What happens during the high middles ages?

Answer 1

• increase in population due to improved agriculture
• rise of manors and churches
• large fraction of the population are serfs

Question 2

What do the crusades cause in terms of economics?

Answer 2

• an increase in traffic along roman trade routes
• an increased need for money/silver/gold to finance crusades and thus an increase in trade
• an increased demand for banking

Question 3

which economic system dominated the high middle ages?

Answer 3

manorialism

Question 4

What forces Europeans to turn to the sea?

Answer 4

Constantinople falls, turks take it and block trade routes to the East. Europeans forced to turn to sea to find a way to the East

Question 5

What are the european trade centers during the middle ages?

Answer 5

Venice and Genoa

Question 6

What shift in population location causes increased trade during the middle ages?

Answer 6

people start to move from self-sustaining estates to towns, in which they need to trade to survive.

Question 7

What does the treaty of Tortasillas say?

What does it do?

Answer 7

that everything to the east of the line belongs to Portugal.

It sparks exploration

Question 8

What was trade financed with during the era of exploration and discovery?

Answer 8

credit
returns were expected to be 10x the initial investment

Question 9

Which 4 key areas of innovation propelled trade?

Answer 9

finance and banking
- shares in stocks, book keeping, insurance

ship building

naval ordnance
- weapons

communication
- printed press: diffusion of maps and information

Question 10

What were the first transnational companies?

Answer 10

The East India companies

Question 11

What are the 4 mercantile-related trade policies?

Answer 11

import tariffs
- to encourage retaining gold in country

strong navy and army

gold and silver via conquest and trade

trade surplus needed

Question 12

What were the 2 challenges to mercantilism?

Answer 12

the intellectual challenge (based on reasoning)
1) wealth is not in gold, but in human labor
2) trade is NOT zero-sum game. Both parties can gain from trade (comparative advantage)
3) wealth does not equal gold

the political challenge
mercantilism depends on a relationship between merchants and the crown. as society shifts towards a democracy, mercantilism is challenged.