The Effect of Trade on Early Modern Europe

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Before I discuss trade and Early Modern Europe, I think the connection to capitalism needs to be made. Economists stated it was the transformation of the European economy through investment in new, larger-scale processes of trade and production and termed this the rise of capitalism (Weisner-Hanks, 203).” It was viewed that trade was at the center of the development of the modern world. Adam Smith, in Inquiry into the Nature and Causes of the Wealth of Nations, identified the natural instinct of people to trade with each other. This led to a specialization of labor starting with individuals then expanding to groups, regions, and finally nations with an emphasis on products and tasks being completed faster and better than their neighbors (Weisner-Hanks, 203). Smith believed “the highest level of development, production, and innovation, the greatest wealth of nations, would best be achieved by allowing free trade and open competition in both products and labor, an economic system later called capitalism” (Weisner-Hanks, 203). The development of capitalism during this time period was considered to be slow and complicated, but the changes to the production of goods, the way goods were bought and sold, the increased growth in population, and the handling of money drove the European economy (Weisner-Hanks 204). All of these factors played an important role in the growth of the European economy and thus capitalism.

The economic growth of Europe after 1500 was a result of countries with access to the Atlantic establishing trade routes with the New World, Africa, and Asia. It was the growth of trade within these countries that created institutional change and enabled merchant groups to obtain protective rights (Acemoglu, Johnson, and ...

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... during this time period.

Works Cited

Acemoglu, Daron, Simon Johnson, and James Robinson. "The Rise of Europe: Atlantic Trade,

Institutional Change, and Economic Growth." American Economic Review 95.3 (2005):

546-79. Print.

Antunes, Catia. "Trade Networks and Migration, Early Modern Europe." The Encyclopedia of

Global Human Migration. Blackwell Publishing Ltd, n.d. Web. 2 Apr. 2014.

.

De Vries, Jan. "The Limits of Globalization in the Early Modern World." The Economic History

Review 63.3 (2010): 710-33. Web.

Koot, Gerald M. "The Role of Trade and Empire in European Economic Development to Ca

1870." Dartmouth/University of Massachusetts, 2013.

Wiesner-Hanks, Merry E. "Economics and Technology, 1450-1600." Early Modern Europe, 1450-

1789. Cambridge: Cambridge UP, 2006. 200-35. Print.

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