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From Commerce to Capitalism

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Sofia Eriksson

on 23 July 2018

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Transcript of From Commerce to Capitalism

But this begins to change in the countries around the Atlantic Ocean, from the 1500s.
We know that the Spanish were the first Europeans to colonise America.
Commerce - the exchange of goods and services - has been around for a long time.
So to sum up:
In Britain in the 1720s, dignitaries like sir Isaac Newton were ruined when their stocks in the South Sea Company were discovered to be useless as the "South Sea Bubble" burst.
The other regions of the tightly interconnected system that we call the
Atlantic world
had a very different experience to Britain and Western Europe of the emerging capitalist dynamic.
Commence was old, but between 1500 and 1750, in the area around the Atlantic Ocean, it intensified to the point where it developed into a market economy - capitalism - and a culture of capitalism emerged that eventually encompassed all of the region, and the rest of the world.
Since north America didn't have gold and silver, the chartered companies had to make their colonies profitable in a different way: by growing things that could not be grown in the mother country, like cotton, sugar and tobacco.
People more from working in agriculture to grow food for their families to selling their time and labour for money in order to buy food for their families.
From Commerce to Capitalism
The first written sources we have record the buying and selling of things 3000 years BC, and archeologists have found clear traces of trade in pretty much all culture globally, for as far back as humans have existed.
In this course we have already seen the power of trade: European monarchs kick-started modern colonialism when they sponsored fleets to find their way to the trade hubs in the Indian Ocean.
But trade and commerce was unevenly distributed before the modern era.
Some places, cities in particular, depended entirely on it. These would have significant proportions of the population engaged as merchants, or doing something that supported the business of merchants and buyers.
Other places saw very little trade and commerce at all, the only exposure to long-distance trade might be a peddler visiting once a year.
Things that kept commerce at a low level
- No surplus income (people were very poor)
- No precious metals to make money from (storing value in, say, goats, is... inconvenient)
- There wasn't that much interesting stuff to buy.

- People were too concerned with religion, the afterlife and being virtuous humans to think about buying, selling and owning things.
- The rich valued military prowess, or collection of exotic items, not regular purchases and upgrades of the things they had.
Material factors
Cultural factors
Gradually, over the course of the period between 1500 and 1800, the things that kept commerce in check, and from enveloping all aspects of the social fabric, changed.
People's surplus increased, gold and silver became more widely available, new and exciting things to buy were introduced.
Culture and attitudes followed: buying and consuming things became desirable and a focus of people's lives.
Greater demand for things to buy and consume (commodities)
Demand for people who are happy to manufacture (make) commodities and get paid for it (a labour market emerges)
A capitalist economy emerges
A capitalist culture emerges
The emergence of a capitalist society
More interesting goods, surplus income,
gold and silver
Changing attitudes to consumption
But if it was:
access to gold/silver,
increased income,
more exotic things to want/buy,
that made mere commerce develop into a market economy - into the new economic and cultural system we call capitalism, why did these things happen 1500-1800 in the Atlantic world?
The answer is European colonialism
The Atlantic World is the name given to the region around the Atlantic, an area that became so integrated as to comprise a world during this time.
They built an empire based on the silver from mines like the one in Potosi, and between 1500 and 1800 85% of the world's silver production and trade came from Bolivia, Peru and Mexico.
watch this if you want to learn more detail!
This is where the silver came from, to facilitate increased trade.
The silver didn't make Spain particularly rich: it was spend on a few wars with other European powers, and caused inflation.
Spain held on to the empire until the early 1800s, but their time as a dominant global power was over by the 1600s.
In the early 1600s, the British, Dutch and French sent their own missions to start colonies in parts of North America that were still under the control of the indigenous Americans.
The British colonists founded Virginia (where John Smith met Pocahontas...), the Dutch founded New Amsterdam (aka New York), and the French settled down in Quebec (Canada) and New Orleans (American south).
Within very little time, the British, French and Dutch colonial empires were more powerful and dynamic than the Portuguese and Spanish.
And they did things differently...
Individuals with money asked the ruler permission to establish a colony, exploit whatever they could, and trade with the mother country. This was called a "chartered company": they had the permission - charter - of the ruler to form and profit from a colony.
Different kinds of empires
ex. Inca, Ottoman, Chinese, Mughal, Mali
Agrarian, contiguous, landbased, ruled by divine right
Commerical, non-contiguous, de-centralised (large part of decision making was local)
Settler colonial, mining boom, non-contiguous, vice-royalty
British, Dutch, French
Settler colonial, commercial, non-contiguous, de-centralised (large part of decision making was local)
African slaves were introduced to carry out the labour, and a plantations emerged all over north America cultivating these goods for sale in the mother country.
This was where the things to buy came from...
So, by 1650, Europeans had access to bullion (gold and silver for making coins) from the Spanish colonies and commodities like sugar, tobacco, chocolate and coffee to pique their taste for consumption.
The 1500s and 1600 also saw a gradual increase in the living standard, particularly in Britain, creating the surplus necessary for people to be able to afford a bit of sugar or tobacco.
So, by the early 1700s, these factors had contributed to a decisive move towards creating a dynamic market and the possibility of mass consumption in western Europe, and both Britain and the Netherlands had developed many of the institutions typical for capitalist societies: the notion of investment for profit, the joint stock company, the stock market, and the stock market crash...
The joint stock company is a company with many owners, each of whom has invested some money, and receives a return from, the company, proportional to how much money was invested.
This is a good way to spread risk: owning one tenth of ten boats means that you only loose a tenth of your investment if one goes down.
Stock markets emerged to facilitate the commerce in stocks: first they were simple cafés where people with money to invest met people with boats and trading missions to fund, and eventually they developed into dedicated offices.
for the
For many people at the time,
all of this investing, buying and selling
of increasing
profit seemed
Tulip Mania in Amsterdam,1637
Tulip bulbs sold for the equivalent of 10 years of income for a relatively well off person, until people realised how stupid that was and the bubble burst.
Brueghler the Younget c. 1640
Isaac Newton of apple tree fame
Capitalism in western Europe
So. To sum up.

1. By the middle of the 1700s, the bullion from colonial Latin America had solved the gold famine.
2. Colonisation had made consumer goods like sugar, tobacco and cotton available to Europeans, and
3. increasing living standard created the surplus necessary for ordinary people to be able to afford some consumption.

As a result, a growing number of people abandoned (willingly or because they had to) their agricultural lifestyle for work in and around the cities. Those with a little more surplus started investing in colonial ventures and trading missions.
Western Europe had taken a significant step in the direction of the capitalist society we see today. The transformation would not be complete until the production of goods was industrialised in the century following after 1760 (in Britain, and later elsewhere - we will talk about this next time), but the groundwork was there.

But the prosperity and budding consumer society of Europe did not translate to other parts of the Atlantic world...
In America, the European colonists set up a plantation economy, entirely dependent on producing the sugar, cotton and tobacco that fueled the emerging consumer society of western Europe and Britain in particular.
Labour shortage was a problem as always in the colonies: people did not leave their home country to do hard labour, that was available at home and in cooler conditions. The indigenous American population did not recover from the diseases brought by Europeans (in the Columbian exchange) enough to be a useful labour force. The solution to the settlers' labour shortage was to use enslaved men and women from the African continent.
Not capitalised, since it is used to say "original', rather than as the name for the people
We saw last week how this started in Spanish American mines, and the practice was continued across the Caribbean and North American colonies.
10-12 million African men and women were transported to America between 1500 and 1807.
15-25% of the enslaved men and women died during the "Middle Passage" - the journey from Africa to America (several months in the early 16th century, approximately six weeks by the 19th century).
Most of those that survived were sold on slave markets in South America or the Caribbean, and only 5% were sold in North America.

Slaves came primarily from the west central Africa (Congo, Angola) and the areas along the Atlantic coast.
They were not captured by Europeans, but bought from African slave traders in European controlled trading depots along the coast. Like Elmina...
American plantation society
For slaves sold in America, life was miserable, but just how miserable depended on here they were sold and for what purpose they were bought.
For those enslaved purchased to work in households or on cotton and tobacco plantations life was tough, always unfair and often brutal. On the sugar plantations it was positively hellish. Manuring, harvesting and processing sugar cane is probably the hardest form of labour that exists....
On sugar plantations, the slave populations never became self-sustaining: the existence was too brutal and hard for families to form or women to be fertile.
In most other areas, the population did become self-reproducing, even though only 50% of the infants born into slavery survived their first year, and the life expectancy was 21-22 years for adults (half that of slave owners at the same time)
But the thing is.
What sets the slavery of the Atlantic world apart from the slavery in the ancient world, the Muslim world, the sub-Saharan African world before this point was this:
Slavery in other times and other places had been about a variety of things: religion, debt, crime, warfare...
But once the African men and women were transported to the American content, they were always and immediately recognised as "slaves" because of their skin colour.
Atlantic slavery changed the way that race was understood.
Skin colour mattered: in Europe, the Islamic world, Asia and Africa. But it wasn't the sole determinant of human value.
Early colonial Latin American elites worried about race, and valued whiteness higher.
But in the North Atlantic world from the 1600s, the dark skin became synonymous with "enslaveability".
To justify and explain the enslavement of black men and women, whites looked to the bible, to climate theory and to emerging scientific discourses that claimed to "prove" that people from Africa were less intelligent, less human, that they were in fact "made" to serve whites.
To control the enslaved and enforce white privilege random and brutal violence was common: whippings, brandings, beatings.
The violence and the ideologies both served to dehumanize the enslaved black men and women. Western societies in general, and the American states, in particular are still trying to work out how to move on from the consequences of several hundred years of denying the humanity and equality of black men and women.
Spanish and Portuguese colonialism connected America and Afro-Eurasia again after several millenia of separation, and the silver from Latin American mines flower through Europe and all the way to China.
Access to bullion, consumer goods and a gradual rise in living standard changed attitudes and economic practices, and the population of Britain gradually abandoned the system of agricultural self-sufficiency that had dominated most of human societies before this point.
But it was only after British, French and Dutch colonial ventures took over that the area around the Atlantic developed into a tightly integrated system: the Atlantic world, in which commerce turned into a market economy and capitalism over the period between 1500 and 1750.
For American settlers this translated into a plantation economy that supplied Europe with raw materials, while indigenous Americans and Africans saw their land and labour exploited to support this development.
Today we are looking at how capitalism emerged in the period 1500-1750 in the area around the Atlantic.
(and prevented it from transforming into a market economy, or capitalism)
Lecture 4
Economic, social and cultural system
in which most people sell their time, skill and/or labour for money.

"gold famine"
Transatlantic slavery relied on the
of people with dark skin.
Last week:
Two, previously separate halves of the earth were connected - accidentally - by a desire for sea access to the East among some rich Europeans.
What were the results?
The Columbian Exchange
The beginning of almost 500 years of European colonisation of the world.
Between the later 1400 and 1950s the entire world apart from
Thailand, Japan and Korea
were under European colonial control at one point or other.
We'll be returning to this process, to its effects, and its role in the creation of globalisation and modernity throughout the rest of the unit.
Find an example of manifestation of capitalism and post on facebook
What has capitalism changed about the world?
- We are employees (or employers) - not self sustaining.
- We do mostly one kind of labour - not everything necessary to survive.
- We consume & exchange a lot - for many other reasons than survival.
- We have money - not goats.
- We obsess about wealth, define success in terms of wealth.
What you want to be able to do after this week:
4. Identify and describe what role capitalism and the Atlantic slave trade played in the emergence of globalisation and modernity.
1. Demonstrate that you understand what Capitalism is (or at least be able to define it).
2. Outline what the historical context that capitalism emerged out of looked like.
3. Discuss the relationship between capitalism and the Atlantic slave trade.
(while a smaller number of people buy other people's and invest it into producing for profit).
Not quite:
A portion of people in the Indian Ocean trade got paid to navigate boats, grow/make/mine goods for trading in, but it never became the dominant way to make a living for the majority.
Socially turning skin colour into an issue of race
Before European colonisation began
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