Chapter 19, Section 4
The Origins of Modern Capitalism
Standard: 7.11.3
  • Examine the origins of modern capitalism; the influence of mercantilism and cottage industry; the elements and importance of a market economy in 17th century Europe; the changing international trading and marketing patterns, including their locations on a world map; and the influence of explorers and map makers.
name
date
period
The Origins of Modern Capitalism

Vocabulary

:

  1. The Beginnings of Capitalism

      The Price Revolution

    • an important part of capitalism is a free market
    • the price of food and goods whet up
    • two causes: increased demand, gold and silver from the Americas

      Changes in Agriculture

    • an important part of capitalism is landownership
    • land owners made money from their property
    • peasants worked as farm laborers or looked for new jobs

      Changes in Industry

    • some peasants worked in cottage industries (wool cloth)
    • coal mines, ironworks, chocolate industries

      A Market Economy

    • The English and Dutch moved away from a traditional economy
    • market economy forces of supply and demand set prices

  2. Mercantilism

      The Mercantilist Theory

    • main goal of trade was to make a nation more powerful
    • money paid for a powerful Army and Navy
    • export more valuable goods than imported

      The Impact of Mercantilism

    • tax imports to keep foreign goods out
    • founded colonies for raw materials
    • Sellers' country richer buyers' country poorer

Summary: At the end of the Middle Ages, capitalism, a new type of economic system, a rose in Europe. Mercantilism, and economic theory based on overseas trade, also emerged in Europe.

Study Guide Questions

  • CP 555. What is capitalism?

  • CP 557. How did the mercantilist theory affect trading patterns?

  • CYP 557, 1a. How are price is set in a free market?

  • CYP 557, 1b. Why are free markets important for capitalism?

  • CYP 557, 1c. How did capitalism and free markets affect agriculture in Europe after 1500?

  • CYP 557, 2a. What would make nations stronger, according to mercantilism?

  • CYP 557, 2b. How might this theory increase wars among nations?

    Practice Test

  • Homework: Read chapter 19, section 3, and choose one assignment;
    1. Workbook Chapter 19, section 4 (Page 247)
    2. Answer three of the study guide questions using complete sentences.
    3. Draw a picture of something important from this section and summarize this section of the text (three sentences minimum).