New Patterns of Global Trade: c. 1750 - c. 1900
AP Concept: 5.1 Industrialization and Global Capitalism
Key Concepts
New Markets
Financial Institutions
Key Concepts
- Demand for new raw materials and markets spurred new patterns of global trade
- Financiers developed financial institutions to support industrial production
- Industrialization in Europe and the United States led these countries to look for raw materials in other parts of the world
- British textile mills used cotton grown in India and North America to make cotton cloth
- As patterns of global trade expanded to provide these raw materials, other products became global commodities
- Tea from China became a popular beverage throughout the world, as did sugar from the Caribbean
- Gradually ordinary people were able to afford imported goods, including former luxury items
- Some even purchased finished goods made with raw materials they themselves provided - colonial laborers could buy European cotton cloth made from raw cotton they produced
- This led to an "economic reordering" of the world, which shattered the previous mercantilist system in which nation-states enriched themselves by restraining imports and encouraging exports
- Now nations sought to expand internal and international markets for their commodities
- Financiers emerged to take advantage of this new global trade
- With their banks, financiers could lend money to traders for a fee
traders could ship goods across long distances without worrying about immediate payment - Financiers also encouraged the growth of manufacturing industries using similar practices
- Financial arrangements like this allowed goods and money to flow more freely throughout the globe
- Complex corporate structures, stock markets, and insurance developed to allow businessmen to raise capital or expand production
- New corporations often spanned several countries or continents, such as the United Fruit Company in North, Central, and South America
- With growing international trade, merchants and financiers pushed for changes to the trading structure, as well, including free trade across borders
- Merchants in the Americas began arguing for free trade when they wished to export raw materials and import needed European goods with minimal taxes
- Latin American countries eventually abolished protection for local producers
- By the 1840s, free trade had become the guiding practice in the Atlantic commerce between Britain and the Americas
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Related Links: AP World History Quizzes AP World History AP World History Notes Industrialization: c. 1750 - c. 1900 |