Global Economy 18 century

• During the eighteenth century a global economy was created, with Europe at the center. The Americas, Asia, and Africa were all now part of Europe's ocean trade and imperialistic holdings.
• Portuguese and Spanish power declined while the British, French, and Dutch were gaining strength.
• Rural Industry


  • Europe began to see the beginnings of capitalism and industry, but was still functioning in a rural society
  • Most countries still had the mercantile system
• Joint stock company


  A company owned by shareholders who share in its profits and losses
• Trade


  1. After the Peace of Utrecht the Dutch were no longer a political power, but they were very much still an economic force

  2. Dutch capital was found in every large commercial venture, & was lent to governments across Europe

  3. Many East India Companies were founded, but the Dutch company was the only one to last any substantial amount of time (over 60 years)

  4. Britain and France had both the industrial production AND the ability to protect and advance their trade

  5. By the 1780s Britain and France were about equal in foreign trade, no longer dependent on colonies
• The British did more trade with America and Asia, while the French did more trade with the rest of Europe and the Middle East.
• There was much that Europeans wanted from Asians, but almost nothing that Asians wanted from Europe, except gold.
• Europeans wanted cloth, porcelain, rugs, and cloth (cotton, silk, and linen) from Asia, and in order to protect European cloth industries, many European countries forbade the import of Asian cloth.
• In the 1780s, when the European cloth industry was changed by technology, this trade became less important, and focused more on tea.
• American trade would focus on sugar, and some cotton, which would lead to the "plantation" system.
• Plantation


  An economic unit consisting of a considerable tract of land, often owned by absentees in France and England, and using "impressed," or slave, labor-generally African slaves
• Before 1650 slavery in America was "occasional", but plantations developed in the late seventeenth century, and after 1700 slavery became a fundamental economic institution in America.
• Until well after 1800 far more Africans than Europeans came to the Americas.
• In 1790 merchandise from the British West Indies (produced by slave labor) constituted about 20% of all British imports.
• Britain also imported a good deal of indigo and tobacco from the American mainland (USA), which was also produced by slaves.
• Because of these imports, the rise in British industry, which would be drastic in the eighteenth century, was largely due to slave labor.
• The town of Liverpool, for example, built itself up by the slave trade and the trade in slave-produced wares to busy transatlantic commercial center, which in turn would stimulate the "industrial revolution" in Manchester and neighboring towns.
• Dutch Civilization & Government


  • The Dutch had become very wealthy & internationally strong because of their trade and their military
  • Literature flourished
  • Science and technology were innovative
  • Painting was at its height in Holland
• Dutch painters


  • Frans Hals-portraits of the common people
  • Jan Vermeer-painted members of the burgher class in typical domestic scenes
  • Rembrandt-seen as the "master" of the Dutch school
• Religion in the Dutch Republic


  • Calvinism dominated politics, but other religions enjoyed a good degree of toleration
  • This stimulated both the intellectual and commercial enterprise
• Throughout the 17th century the Dutch owned most of the shipping of Northern Europe.
• Dutch trade and expansion

  1. Organized the East India Company in 1602

  2. Dutch merchants increasingly replaced the Portuguese in India & the Far East

  3. In the early 1600s the Dutch reached Japan, but in 1641 the Japanese became concerned about Christian domination and expelled all Europeans, confirming Dutch trade to a small island near Nagasaki. For over 2 centuries the Dutch were the only European traders with Japan

  4. In 1612 the Dutch founded New Amsterdam on Manhattan Island

  5. In 1621 they established the Dutch West India Co. to exploit the holdings of the Portuguese and the Spanish

  6. In 1652 they settled the Cape of Good Hope in Africa (taking it from the Portuguese). Here they would become the Afrikaners
• Bank of Amsterdam


  • Accepted all coins, assessed gold and silver content, & paid out accordingly in florins minted by Bank of Amsterdam which became internationally sought money
  • Depositors were allowed to draw checks on their accounts
  • Safety of deposits was guaranteed by the Dutch government
  • Amsterdam was the financial center of Europe until the French Revolution
• In 1650 the stadholder, William II died, and no replacement was elected. The burghers (nobility) ran the country.
• The English passed the Navigation Act in 1651 to damage Dutch trade.
• Wars between the Dutch and English


  1. 3 wars followed the Navigation Act, but they were indecisive

  2. The English won New Amsterdam and renamed it New York
• In 1667 Louis XIV claimed the Spanish Netherlands in his wife's name.
• Louis XIV withdrew, but attacked with a greater force in 1672 & occupied three of the seven Dutch provinces.
• The Dutch rallied to have William of Orange installed as stadholder, and he was elected in six provinces. The six also voted to make stadholder a hereditary position.
• William III had difficulty centralizing his country.
• William allied with Denmark, Brandenburg, and the Austrian & Spanish Habsburgs creating a new balance of power.
• Peace with Louis XIV was signed in 1678, but Louis had gained territory from Spain & the Holy Roman Empire - the Dutch lost nothing.
• Before 1700, the Austrian house of Habsburg had been weakened at the Peace of Westphalia, but the French had remained at war with the Spanish branch for another decade. This ended with the Peace of the Pyrenees in 1659, but then Louis XIV would start it all over again.
• In 1667 Louis XIV sent troops to the Spanish Netherlands, but was blocked by the alliance of the Dutch, Swedish, and British.
• In 1672 Louis XIV invaded the Dutch provinces in the lower Rhine, but William II of Orange rose up against him, forcing Louis to sign the Treaty of Nimwegen in 1678.
• The Peace of Westphalia gave France the rights to the territory of Lorraine and Alsace, but it was ambiguous.
• In 1679 Louis XIV invaded this territory of the Holy Roman Empire, and had an ally in the elector of Brandenburg (early Prussia).
• The Holy Roman Empire was divided between pro-French and anti-French factions, and Emperor Leopold was distracted by problems in the East, where the Hungarians, financed by Louis XIV, were rebelling against the Habsburgs. The Turks were helping the Hungarians, but the Polish helped get the Turks out of Austria.
• Catholics and Protestants came together against Louis XIV in the League of Augsburg (1686), comprised of the Holy Roman Empire, Spain, Sweden, Bavaria, Saxony, the Palatinate, and the Dutch Republic. Two years later, when William II became king of England, England also joined the alliance.
• The War of the League of Augsburg broke out in 1688, and Louis finally made peace in 1697 at Ryswick, in the Netherlands.