Economics through History

During the Age of Exploration, also known as the Age of Discovery, overseas exploration was a big part of European culture. The period began in the early fifteenth century and lasted through the end of the seventeenth century. Although the primary motives of European countries were economic, desire to spread religious beliefs also played a role in their decision to travel the seas.

Three motivations, known as the 3 Gs, fostered the Age of Exploration:

• Glory is national pride and prestige. More land meant more power for a monarch.
• Gold is wealth. Gold, silver, and other raw resources meant more riches.
• God was central to European life during this period. Newly discovered populations meant more opportunity to spread religious beliefs.

The capitalist economy of a European country improved with successful exploration. European ships traveled around the world in search of new trading routes and partners willing to be part of the thriving free market in Europe. This was the beginning of economic globalization. In addition, monarchs could directly increase their wealth if explorers from their country found an area that had gold, silver, or other natural resources.

Spanish, French, and English explorers wanted to find a faster way to bring back goods from Asia than existing overland routes. The explorers believed that the Northwest Passage, an open waterway through northern North America, could be a direct and efficient route to East Asia. Asian countries had goods like spices and silks to trade.

Columbus was one of the explorers who looked for a quicker route to Asia. Instead, he found North and South America. After realizing how rich the New World was in resources, Spain, France, and England began setting up colonies.

King James I of England established 13 colonies along the coast of North America that would come together to form the United States. For the most part, the colonies were business ventures. Economic policy of the time advanced the main goal of exploration: making the mother country, and its monarch, rich.

Mercantilist laws created a trade system whereby the 13 colonies provided raw goods to England. England used these raw goods to produce manufactured goods that were sold back to the colonies and in European markets. England and other European countries wanted to export as much as possible and import as little as possible.