The Early Modern Era

Economic development of the early modern era was heavily influenced by the demand for international trade. However, the start of globalization also led to many socio and economic changes throughout the world. Individuals from all over the world were being brought together, and introduced to “international experiences” through globalization (Stearns, 462). Acemoglu, Johnson and Robinson acknowledge that, “The indirect effects of Atlantic trade through institutional change, as well as its direct effect, account for much of Western European growth from 1500 to 1850”(qtd. in De Vries 712). Moreover, the expansion of trade routs developed an increase in technologies during the early modern era; Technological advances were the cause of military and

This drastic transformation in the economy also shaped new political entities and hierarchies in various nations. Consequently, international trade allowed maritime power to arise between various countries. In other words, countries that established complete control of trade would later result in weakness and conflict in comparison to other nations. To sum, the transformation in the economy during the early modern era triggered domination in international trade. For this reason, the East India Company formed, and the demand for trade goods continued to increase.

Portugal was one nation that progressed into a maritime empire as a result of globalization. During this time, the Portuguese began taking over accessible trade systems, and robbed existing trade routes and ports from other countries. Meanwhile, they forced trade through their trading ports, and began invading areas lacking sovereignty (Early Modern Empires: Formation of World Systems). Later, in attempt to acquire luxury

For instance, Asia had become rich in goods such as pepper and spices, whereas Europe traded textile and porcelains. However, by the seventeenth century the demand for commodities like cotton and silk grew significantly, and Asian and European began emulating goods. As stated by De Vries, “Asian products substituted for European cloth and ceramics . . . Asian manufactured goods encouraged, over time, the development of European imitations”(722). Subsequently, competition sparked between Asian and Europe when they both partook in coffee trade. In De Vries’ words “The existence of alternatives and the rise of import substitution influenced the price at which many Asian goods could be sold in Europe limiting the ‘pricing power’ of the trading companies”. The more pricing power a country has the more inelastic their products are. In other words, when people are willing to buy a good regardless of its price a country can increase the cost drastically because consumers will still purchase it. The competition between Asia and Europe limited pricing power in order to increase their profit by decreasing the cost of their goods. Moreover, this explains why prices were heavily influenced by trade