Creation interaction and expansion of economic systems
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Creation, Interaction and Expansion of Economic Systems. Mr. Millhouse AP World History Hebron High School. Creation, Interaction and Expansion of Economic Systems. This theme includes: Agricultural and pastoral production Trade and commerce Labor systems Industrialization

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Creation, Interaction and Expansion of Economic Systems

Mr. Millhouse

AP World History

Hebron High School

Creation, Interaction and Expansion of Economic Systems

  • This theme includes:

    • Agricultural and pastoral production

    • Trade and commerce

    • Labor systems

    • Industrialization

    • Capitalism and Socialism

Foundations Unit8000 BCE – 600 CE

Neolithic Revolution

  • Traditional Economy

    • Hunting and gathering

    • Sedentary agriculture developed between 10,000 and 8,000 BCE

      • 1st developed in southwestern Asia

      • Earliest method was slash-and-burn agriculture

      • Subsistence agriculture

    • Herding animals (pastoralism)

Slash-and-burn agriculture in northeast India

Development of Agriculture

Economic Regions

Early Village Economy

  • Farming led to the rise of permanent villages

    • Jericho

  • Village life led to specialized labor

  • Development of early industry

    • Pottery, metallurgy, and textiles

Ancient Civilizations

  • Mesopotamia, Egypt, & Indus River Valley

    • Irrigation led to improved agriculture

    • Development of cities contributed to rise of trade

  • China

    • Regular rains & fertile soil minimized irrigation

  • Olmec

    • Develop in rainforest; water control systems

  • Chavin

    • Develop in mountains; complex irrigation

Nile-Indus Corridor

Pre-classical labor systems

  • Slavery

    • Existed in all early civilizations but was relatively unimportant

    • Most slaves gained through military conquest

  • Egypt

    • Used corvée labor to build pyramids & temples

    • Peasants were bound to the land

    • Men were organized into labor gangs of 50-100

Pre-classical labor systems

  • Mesopotamia

    • Large number of slaves due to militaristic nature of society

    • Peasants lost their freedom over time

      • Rise of debt slavery

  • China

    • Zhou dynasty peasants paid a percentage of their crops to aristocrats in exchange for protection

      • Manorial system

Classical Civilizations

  • Han China

    • Monopolized production of iron, salt, and liquor

    • Rise of the Silk Road

  • Mauryan India

    • Ashoka built irrigation systems and roads to promote trade

  • Mayans

    • Terrace farming improved production of cotton, maize, and cacao

Classical Civilizations

  • Ancient Greece

    • Cities, such as Athens, become centers of trade

    • Economy depended heavily on slavery

  • Rome

    • Latifundia – large landed estates focused on commercial agriculture (olive oil, wine, wheat)

      • North Africa was the major grain producing region

    • Depended on slave labor

    • Roman roads promoted trade and linked empire to Silk Road


The Silk Roads

Classical era labor systems

  • China

    • Free peasants were the backbone of the labor force

      • Peasants ranked just below bureaucrats but above artisans and merchants

    • Qin Shi Huangdi ended the manorial system

      • “Recruited” labor to build the Great Wall

    • Silk weaving supplemented farm income

      • “Men as tiller, woman as weaver”

    • During the Han dynasty, slaves made up less than 1% of the total population

Classical era labor systems

  • Greece & Rome

    • Slaves never constituted more than 50% of the population

    • Slaves worked as domestic servants, miners, and farmers

      • In Greece, slaves could serve as tutors

      • In Rome, development of commercial agriculture led to the rise of slavery

      • Rome also used slaves as gladiators and chariot racers

Classical era labor systems

  • India

    • Caste system was based largely on job classification

      • Farmers did not rank high in prestige

      • Merchants had a higher social standing than they did in China or the Mediterranean

    • Slaves played almost no role in the economy

      • Sudras (lowest caste) and untouchables took the place of slaves

Post-Classical Unit600 – 1450


  • Did not rely heavily upon agriculture

  • Abbasid sakk (checks) encouraged trade

    • Urbanization: Baghdad

  • Dar al-Islam facilitated expansion of trade

    • Islamic law protected merchants

    • Revival of the Silk Road

    • Growth of Indian Ocean trade

      • Dhows increase the volume of maritime trade

Indian Ocean trade routes

Chinese junk

East Africa




Arab dhow

Labor in the Islamic World

  • Islamic slaves were viewed as humans rather than just property (chattel)

    • Slavery was seen as a method of conversion

  • Slaves were acquired from Africa or central Asia

  • Abbasid introduced the use of Turkish slave-soldiers

    • Mamluks

    • Janissaries (Ottoman Empire)

Post-Classical Empires

  • Byzantine Empire

    • Manufactures glassware, jewelry, & silk

    • Trade a major part of the economy

      • Mediterranean Sea, Silk Roads, Russia, etc.

    • Urbanization: Constantinople

  • Sudanic Africa (Ghana, Mali, Songhai)

    • Trans-Saharan trade

      • Use camel caravans to trade gold, slaves, and ivory for horses, manufactured goods, and salt

    • Urbanization: Timbuktu

Trans-Saharan trade routes

Post-Classical Empires

  • Swahili Coast

    • Trade gold and parts of exotic animals to Islamic and Indian merchants for products from Persia, India, and China

    • Urbanization: Mogadishu, Kilwa, etc.

  • Great Zimbabwe

    • Supplies gold to the Swahili coast

Tang/Song China

  • Emphasis on internal trade

    • Champa rice & terrace farming

    • Grand Canal & flying money

  • Song “pre-Industrial” era

    • Commercial economy focused on the production of silk, porcelain, & steel

    • Urbanization: Hangzhou

Post-Classical Empires

  • Mongols

    • Pastoralists

    • Promoted trade on Silk Road via Pax Mongolica

      • Marco Polo

  • Japan

    • Villages relied on rice cultivation

    • World’s leader in silver production

      • Trade silver to China for manufactured products

    • Development of feudalism caused peasants to become serfs

Medieval Europe

  • Manorialism

    • Self-sufficient agricultural estates worked by serfs

    • Three-field system & moldboard plow

  • Trade revived after 1000 CE

    • Rise of merchant & craft guilds

    • Crusades led to an increase in demand for Asian products

    • Rise of Italian merchants & the Hanseatic league

    • Urbanization: Italian cities & Paris

Hanseatic League (1400s-1600s)

Post-Classical Empires

  • Aztecs

    • Chinampas

    • Pochteca monopolized long-distance trade

    • Tribute system

  • Inca

    • Built 9,500 miles of roads to facilitate trade

    • Inca socialism

    • Use terrace farming to grow potatoes

    • Mita labor

Early Modern Era1450 - 1750

Rise of World Trade

  • European exploration

    • Seeking easier access to Asian luxury products

    • Columbus discovery of the Americas

    • Vasco da Gama reached India in 1498

    • Spain established Manila in 1571

      • Manila galleons connect Asian markets to American silver

  • Trade Empires

    • Spain/Portugal in the 16th century

    • Netherlands (Dutch) in the 17th century

    • England (Great Britain) in the 18th century

European Colonization

World Trade after 1571

Dutch Trade Empire

Western Europe

  • Commercial Revolution

    • Rise of a middle class (bourgeoisie) and proletariat

    • Mercantilism

      • Rise of manufacturing

      • Encouraged colonization

    • Joint Stock Companies

      • Privately owned with government support

      • Ex. Dutch East India Co., Royal African Co., Virginia Company

Economy of New Spain

  • Encomiendas

    • Manorial system in the New World

    • Declined with the death of the natives

  • Plantations

    • Majority of labor provided by African slaves

Economy of New Spain

  • Mining

    • Silver “the Heart of the Empire”

    • Largest mine was Potosi

    • Mita labor

  • Haciendas

    • Estates focused on cash crops & livestock

Africa & the Slave Trade

  • Commercial relationship developed between West African kingdoms & Europe

    • Triangle Trade or the Atlantic System

  • Slavery was common in Africa

  • Slave Trade

    • Trade continued with Muslim merchants

    • Increase demand caused by sugar plantations

    • Atlantic slave trade altered traditional African trade routes

African Slave Trade

Emancipation of Slaves

Ming Dynasty

  • Economic Recovery

    • Rebuilt irrigation systems destroyed by the Mongols

    • Increased production of silk textiles & porcelain

  • “Silver Sink”

    • Single-whip tax system

    • Chinese demand for silver contributed to rise of world trade

  • Limited trade to Macao/Canton

Voyages of Zheng He

  • Established tributary relationships throughout the Indian Ocean

    • Exchanged silk & porcelain for other luxuries

Tokugawa Japan

  • Portugal established trade relations in 1543

  • Trade silver to China in exchange for luxury products

    • 2nd in silver exports behind Spain

  • Began isolation in 1640s

    • Allowed Dutch & Chinese to trade at Nagasaki

  • Urbanization led to rise of a merchant class


  • Peter the Great modernized the economy focused on mining and metallurgy

  • Serfdom

    • Began under Mongol occupation

    • Provided cheap labor for Russian agriculture

    • Could be bought and sold

Mughal Empire

  • Continued manufacturing cotton textiles

  • British establish trading posts at Madras and Bombay in the early 1600s

    • British East India Company continued to expand their interests into the 1700s

The Modern Era1750-1914

Causes of the Industrial Revolution

  • Favorable natural resources

  • Population Pressure

    • Abundance of labor

  • Growth of large manufacturing sector

    • Cottage industry (putting-out system)

  • Advantages in world trade

  • Technological innovation

  • Government support of business

Industrial Technology

  • Cottage Industry (putting-out system)

  • Mechanization of weaving

    • Cotton that took an Indian worker 500 hours to spin took a machine in England 80 minutes to spin

  • Iron smelting

    • Bessemer steel process

  • Energy

    • Steam engine and electricity

  • Transportation

    • Canals, steamboat, railroads

Economic Effects of Industrialization

  • Labor changes

    • Factory labor was dangerous and toilsome

    • Initially women & children work in factories

    • Rise in white collar jobs for new middle class

    • High unemployment rates

    • Labor unions were formed to protect workers

  • Rise of consumer culture

  • Standard of living increases

  • Frequent economic depressions

Economic Effects of Industrialization

  • New economic theories

    • Capitalism

      • Direct attack on mercantilism

    • Positivism

    • Socialism

      • The Communist Manifesto by Karl Marx and Friedrich Engels

      • Communism

Global Industrialization

  • Industrialization turned nations into either manufacturers of consumer goods or suppliers of raw materials

  • Manufacturers: Western Europe, the United States, Japan, Russia(?)

  • Suppliers: the Ottoman Empire, Egypt, China, India Africa, Latin America, Southeast Asia, Australia

Spread of Industrialization in Europe

Russian Industrialization

  • Caused by Russian defeat in Crimean War

  • Abolish serfdom in 1861

    • Do NOT make major reforms to help peasants

  • Limited industrialization

    • Trans-Siberian railroad

    • Focus on heavy industry

      • 2nd in petroleum and 4th in steel production by 1900

      • Do NOT produce consumer goods

    • Lower class women move to cities for factory work

Japanese Industrialization

  • Ends isolation in 1853

  • Abolish samurai class

  • Economic modernization

    • Industrialization

    • Zaibatsu

      • Mitsubishi

    • Women work in silk factories

Africa: 1750-1914

  • British ended the slave trade in 1807; the United States in 1808

    • England bans slavery in 1833; U.S. in 1863;

  • Natural resources (gold, ivory, palm oil) replace slaves in trade with Europe

  • Muhammad Ali modernizes Egypt

    • Forced peasants to grow cotton for export

    • Built irrigation canals and railroads

    • Successors build the Suez Canal

      • Makes Egypt one of the most strategic places on Earth

The Middle East: 1750-1914

  • “Sick Man of Europe”

    • Declining agricultural revenues

    • Large debts to foreign nations

    • European imports exceed exports

      • Caused massive inflation

  • Reforms

    • Creation of a central bank

    • Factories opened in urban areas

      • Relied heavily on European investment and technology

Asia: 1750-1914

  • India

    • British transform India from supplier of textiles to exporter of raw cotton

      • Also export opium, coffee, and tea

  • China

    • Opium War ends Canton system

      • Opium trade reverses causes silver to flow from China

  • Southeast Asia

    • British establish Singapore and colonize other areas to gain access to raw materials

  • Indentured Servitude

    • Thousands of Indians, Chinese, and Japanese migrated to the Caribbean to replace slave labor

The Americas: 1750-1914

  • Latin America supplied raw materials to the West in exchange for manufactured goods

    • Influence switched from Spain to England

    • Monroe Doctrine

  • Indentured servitude & immigration replace slavery

  • Mexico and Argentina undergo limited industrialization in the late 1800s

    • Porfirio Diaz

The Twentieth Century1914 – Present

The West

  • Great Depression

    • Causes

      • German economic depression, France & England unable to pay war debt; surplus in agriculture & industry; U.S. stock market crash (October 1929); U.S. bank failures

    • Effects

      • Economic nationalism, expansion of welfare state (New Deal in U.S.), increased government regulation of the economy; political radicalization

The West: Post-WWII

  • Transition from secondary economy (industrial) to a tertiary economy (service)

    • Growth of white-collar jobs

  • Expansion of the welfare state

  • Economic cooperation

    • European Economic Community (eventually EU)

    • IMF and World Bank

  • Multinational corporations

    • Volkswagon built cars in Mexico for U.S. consumers

Eastern Europe

  • Russia

    • New Economic Policy

      • Lenin’s response to the Great Depression; minimal impact

    • Collectivization of agriculture

    • Five-Year Plans

      • Command Economy

Latin America

  • Export raw materials (crops, rubber, etc.) for manufactured goods

    • Industry dominated by Europe

    • Great Depression had major impact

      • Exports fell by over 65%

  • Import Substitution Industrialization

  • Attempts at economic nationalization was often opposed by the U.S.



  • Export raw materials (cocoa, palm oil, gold, etc.) for manufactured goods

    • Colonial rulers often forced Africans to work in mines or on plantations

  • Post-Independence

    • Debt

    • Emerging markets

      • Low GDP with opportunity for economic growth

    • Violence over resources

      • Conflict diamonds

The Middle East

  • Post-Independence

    • Often remained dependent upon trade with Europe

    • Impact of oil economy

      • OPEC

      • Allowed nations to gain tremendous wealth

    • Many countries have used oil wealth to invest in other industries

      • Ford, Citicorp, AIG, etc.

East Asia

  • Japan, Inc.

    • Government works closely with business

  • Little Tigers

    • South Korea – steel, automobiles, etc.

    • Taiwan – textiles then computers

    • Hong Kong – textiles then banking

    • Singapore – shipping

  • China

    • Five-years plans & collectivization under Mao

    • Four modernizations under Deng Xiaoping

      • Semi-autonomous regions

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