The expansion of European commerce accelerated the growth of a worldwide economic network.
The economic watershed of the 17th and 18th centuries was a historically unique passage from limited resources that made material want inescapable, to self- generating economic growth that dramatically raised levels of physical and material well-being. European societies — first those with access to the Atlantic and gradually those to the east and on the Mediterranean — provided increasing percentages of their populations with a higher standard of living.
The gradual emergence of new economic structures that made European global influence possible both presupposed and promoted far-reaching changes in human capital, property rights, financial instruments, technologies, and labor systems. These changes included:
- Availability of labor power, both in terms of numbers and in terms of persons with the skills (literacy, ability to understand and manipulate the natural world, physical health sufficient for work) required for efficient production
- Institutions and practices that supported economic activity and provided incentives for it (new definitions of property rights and protections for them against theft or confiscation and against state taxation)
- Accumulations of capital for financing enterprises and innovations, as well as for raising the standard of living and the means for turning private savings into investable or “venture” capital
- Technological innovations in food production, transportation, communication, and manufacturing
A major result of these changes was the development of a growing consumer society that benefited from and contributed to the increase in material resources. At the same time, other effects of the economic revolution — increased geographic mobility, transformed employer–worker relations, the decline of domestic manufacturing — eroded traditional community and family solidarities and protections.
European economic strength derived in part from the ability to control and exploit resources (human and material) around the globe. Mercantilism supported the development of European trade and influence around the world. However, the economic, social, demographic, and ecological effects of European exploitation on other regions were often devastating. Internally, Europe divided more and more sharply between the societies engaging in overseas trade and undergoing the economic transformations sketched above (primarily countries on the Atlantic) and those (primarily in central and eastern Europe) with little such involvement. The eastern European countries remained in a traditional, principally agrarian, economy and maintained the traditional order of society and the state that rested on it.
2.2.1: Early modern Europe developed a market economy that provided the foundation for its global role.
2.2.1.A: Labor and trade in commodities were increasingly freed from traditional restrictions imposed by governments and corporate entities.
2.2.1.B: The Agricultural Revolution raised productivity and increased the supply of food and other agricultural products.
2.2.1.C: The putting-out system, or cottage industry, expanded as increasing numbers of laborers in homes or workshops produced for markets through merchant intermediaries or workshop owners.
2.2.1.D: The development of the market economy led to new financial practices and institutions.
2.2.2: The European-dominated worldwide economic network contributed to the agricultural, industrial, and consumer revolutions in Europe.
2.2.2.A: European states followed mercantilist policies by exploiting colonies in the New World and elsewhere.
2.2.2.B: The transatlantic slave-labor system expanded in the 17th and 18th centuries as demand for New World products increased.
2.2.2.C: Overseas products and influences contributed to the development of a consumer culture in Europe.
2.2.2.D: The importation and transplantation of agricultural products from the Americas contributed to an increase in the food supply in Europe.
2.2.2.E: Foreign lands provided raw materials, finished goods, laborers, and markets for the commercial and industrial enterprises in Europe.
2.2.3: Commercial rivalries influenced diplomacy and warfare among European states in the early modern era.
2.2.3.A: European sea powers vied for Atlantic influence throughout the 18th century.
2.2.3.B: Portuguese, Dutch, French, and British rivalries in Asia culminated in British domination in India and Dutch control of the East Indies.