After 1450, the global economic system underwent significant transformations influenced by various factors including exploration, colonization, trade, and the rise of mercantilism. Here are some key developments in the economic system during this period:
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Age of Exploration: The period saw European powers such as Spain, Portugal, England, France, and the Netherlands embark on overseas exploration. This led to the discovery of new lands and trade routes, expanding the scope of trade to include the Americas, Africa, and Asia.
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Colonialism and Imperialism: European powers established colonies in the New World and other parts of the globe. This allowed them to extract resources and raw materials to support their economies, significantly impacting indigenous populations and economies.
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Trade Networks: The establishment of new trade routes and networks became a hallmark of this period. The Atlantic Slave Trade emerged, which saw the forced migration of millions of Africans to the Americas for labor, particularly in the plantation economy. Additionally, the exchange of goods such as sugar, tobacco, spices, and precious metals flourished.
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Mercantilism: Dominating economic thought during this period, mercantilism emphasized the importance of accumulating wealth through trade and maintaining a favorable balance of trade. Governments intervened in the economy, granting monopolies and supporting domestic industries to promote national power.
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Emergence of Capitalism: The foundations of modern capitalism began to take shape, characterized by increased investment in trade and commerce. The rise of a merchant class and the use of joint-stock companies, such as the British East India Company and the Dutch East India Company, facilitated larger-scale trade and investment.
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Agricultural Revolution: This period also saw changes in agricultural practices in Europe due to the introduction of new crops from the Americas (like potatoes and maize) and advancements in farming techniques. Improved productivity contributed to population growth and urbanization.
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Financial Innovations: The development of banking systems, credit, and financial instruments like bills of exchange and promissory notes helped facilitate trade and investment.
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Commercial Revolution: An expansion of European commerce and the development of new markets led to a Commercial Revolution, which transformed economic practices and contributed to wealth accumulation in Europe.
Overall, the economic system post-1450 laid the groundwork for the modern global economy, characterized by interconnectedness, specialization, and a diverse range of economic activities.
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