4.5I: Continuities and Changes in Networks of Exchange

cash (2)

AP Theme

Economic Systems

Learning Objective 4I

Explain the continuities and changes in networks of exchange from 1450 to 1750.

Historical Development 1

The Atlantic trading system involved the movement of goods, wealth, and labor, including enslaved persons.

Historical Development 2

The new global circulation of goods was facilitated by chartered European monopoly companies and the global flow of silver, especially from Spanish colonies in the Americas. European merchants developed new transoceanic and regional shipping services.

Historical Development 3

Peasant and artisan labor continued and intensified in many regions as the demand for food and consumer goods increased.

Key ideas

European economic development and expansion created new trade connections that increased globalization.

Despite the growing influence of Europeans and the new economic and trade connections they created, traditional labor systems and merchant communities continued to make up most of the global economy.

Europea forcibly integrated the economy of the Americas into the global exchange network.

New trade routes opened across the Atlantic and the Pacific Oceans, resulting in new global commodities.


European Expansion Resulted in Significant Changes Across Global Exchange Networks

Main idea

European economic development and expansion created new trade connections that increased globalization.

European expansion remade global trade networks. Old trading powers, trading routes, and commercial methods lost influence as newer European trading methods and processes forced their way into the global economy. The beginning of our modern global economy resulted from these changes.

The European Commercial Revolution

The Commercial Revolution was the expansion of trade and commerce across Europe. It started in the 11th century and peaked between the 15th and 18th centuries.

During the Commercial Revolution

  • The barter economy (exchanging goods or services for other goods or services) changed to a money economy (goods and services paid for with currency).
  • Banks and banking services became available to governments, merchants, and the wealthy. Stock markets allowed the expansion of business investment and new companies like joint-stock companies such as the British East India Company.
  • Insurance became available and decreased the risk associated with business investment.

Effects of the commercial revolution:
 The Commercial Revolution resulted in Europeans looking for new routes to Asian markets and goods—launching the European Age of Exploration and Conquest.

New trade routes opened across the Atlantic Ocean

Almost immediately after they arrived, Europeans began placing the resources and economy of the Americas under their control. The Europeans then started integrating the economies of the Americas and the Afro-Eurasian economy. Resources and cash crops like tobacco flowed toward Europe and Africa across the Atlantic Ocean. As European colonies grew, supplies, people, and goods poured into the Americas. Scholars refer to this new transatlantic commerce as Triangle Trade or the Columbian Exchange.

New trade routes opened across the Pacific

As Spain’s colonies in the Americas and the Philippines grew, Spain established connections between the two regions across the Pacific Ocean. Trade volumes were initially smaller than trade across the Atlantic but increased as the Americas, especially the United States, developed. While Polynesian peoples had crossed the Pacific long before the Spanish, these new connections were humanity’s first documented, sustained trading connections. 

The rise of global commodities

With the Americas now linked to Afro-Eurasian trading networks across the Atlantic and Pacific Oceans, the world had genuine global trade. Commodities (raw materials and agricultural products) became globalized as they moved across the continents and oceans.

Silver in Spanish America: The discovery of vast quantities of silver in conquered Inca lands in Bolivia turned Spanish America into the world’s largest producer of silver. At peak production, Spain produced 85% of the global supply. Most silver came from the Potosi mine. Within decades, Potosi was the biggest city in the Americas. Much of the silver went to Spain, making the Spanish monarchy the richest in Europe. However, vast quantities also went east, where Europeans used it to buy Asian goods. Much of that silver ended up in China to meet increased demand for the metal after the Chinese government in 1570 began requiring taxes to be paid with silver.  

The decline of long-distance land trade routes

Outside of a few places like the Philippines and Indonesia, Europeans did not control Asian and African economies. Before 1750, Europeans mainly transported African and Asian goods between African and Asian ports and Europe. These transportation services made moving many goods by sea cheaper and more efficient than moving goods by land. As volumes of land trade decreased, the once great Afro-Eurasian land exchange networks entered a period of slow decline.    

The Silk Road: Silk Roads trading cities had been some of the most prosperous towns in Eurasia for thousands of years. The rise of European maritime trade decimated these ancient cities. Over time, the shifting of trade volumes decreased the tax revenue of major land empires, such as the Ottoman Empire. Less tax revenue weakened governments. By the late mid-19th century, European armies, competing for influence in Central Asia, controlled much of the region.  

The Trans-Saharan Trade Routes:  European trading posts along the Northern and West African coasts destroyed much of North Africa’s overland trade along the trans-Saharan trade network. African merchants increasingly used European shipping services to move their products to Europe and the Middle East, starting in the 16th century. As this happened, ancient Islamic trading cities in the region fell into disuse. Timbuktu and Djenne, which once helped create the wealth of the Mali and Songhai empires, became increasingly financially impoverished as fewer taxable goods moved through their markets.

There Were Also Significant Continuities in Global Exchange Networks

Main idea

Despite the growing influence of Europeans and the new economic and trade connections they created, traditional labor systems and merchant communities continued to make up most of the global economy.

Despite significant changes in trading systems during this period, many traditional labor systems and trading communities maintained their importance in the global economy.

Local merchants continued to dominate commerce in the Indian Ocean

The arrival of European merchants in the Indian Ocean changed trading relationships across the region. While Europeans tried to take control of Indian Ocean commerce, they failed. Until the 19th century, Europeans primarily moved goods between ports. Traditional Asian trading powers remained influential in the region’s economy and traded without European involvement.

Trading groups that remained dominant after the arrival of Europeans included

  • Swahili Arabs

  • Omanis

  • Gujaratis

  • Javanese
You Might Think
Actual Story
Europeans controlled all trade across the Indian Ocean after their arrival in the 15th century.
While Europeans did force their way into Indian Ocean trade and become influential, traditional trading communities in the region continued to prosper.
Don't Be Confused

Peasant and artisan labor increased

Despite the growth of international trade, most people continued to work in peasant agriculture or as artisans (craftspeople who make things like shoes or silk textiles). Not until the Industrial Revolution would new types of employment, like factory labor or service work in places like banks and stores, begin replacing peasant and artisan labor as the dominant types of work.

Peasant agriculture: Historically, most peasants produced agriculture for their family’s personal use, with any leftovers sold in markets for profit. While that trend continued, increased demand for agricultural products like cotton in India for the production and trade of cotton textiles led some peasants to sell more of what they produced for profit or work the land of others to increase their incomes.

Artisan labor: As international trade increased, demand for products produced by artisan labor (skilled workers who make products by hand) also increased. Artisan populations across Asia increased as products like Chinese silk and Middle Eastern carpets became trendy among elite Europeans. The European artisan class also expanded as more money flowed through European economies and the production of finished goods like furniture increased.

Peasant and artisan produced goods
Western Europe
Wool and linen
Cotton, cotton textiles
Silks and porcelains
The Middle East
Textiles, woven rugs, and wall tapestries
Peasant and Artisan Goods