Commercial Revolution

Big Idea |European maritime nations competed for overseas markets, colonies, and resources, creating new economic practices, such as mercantilism, linking European nations with their colonies.

SOL 5e

Setting the Stage•After the Age of Discovery,

European nations set up colonies all around the world.

• a territory under the immediate political control of a state

Colony

Purpose of a Colony•Colonies were used to provide raw

materials needed by the mother country to create manufactured goods.

•Manufactured goods were then sold to citizens living in the mother country and those living in the colony.

• Salt, Cotton, Spices, lumber

Raw Materials

• Fabrics, Finished Goods

Manufactured Goods

Manufactured goods were always more

expensive than the raw

Materials

• An economic practice adopted by European colonial powers in an effort to become self-sufficient

• Based on the theory that colonies existed for the benefit of the mother country

What is Mercantilis

m?

• Mother Country wanted to export more than they imported.

• More money coming into the country, less money going out.

Goal of Mercantilis

m

Commercial Revolution•European maritime nations competed for

overseas markets, colonies, and resources.

•Why?

Wealth &

Power

Colonies

Overseas

MarketsRaw

Materials

New Economic System Emerged

Colonies: Silver and Gold sent to Mother Country

New Money allows for a new banking

system: Loan money to start up

businesses

Europeans start Joint Stock

Companies to bring back raw

materials

Colonialism Increases:

Mercantilism Develops

Commercial Revolution | Limits on Colonies

• Colonial economies were limited by the economic needs of the mother country.

oColonies could not make their own manufactured goods, but must only buy from the mother country.

oColonies could not tax goods being exported to the mother country.

oColonies must pay tax to all goods being imported from the mother country.