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HISA04H3 Chapter Notes - Chapter Text Book : Interior Plateau, Deindustrialization, Navigation Acts

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Daniel Bender
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The Americas
A Very Short Introduction to Capitalism
The incorporation of the Americas into the world economy destroyed the New World’s
indigenous populations and propelled Europe into economic prosperity.
Geography in the new world and how it affected it and Europe
Geography played a big role in affecting Europe’s ability to trade. Trade was both good and bad.
Cheap British imports undercut many other less developed countries businesses and
industrialization. But exporting local agricultural products could also promote farming and
settlement, specifically in the Americas.
Colonists in North America made more money exporting to Europe than colonists in South
Colonists in North America were closer to Europe than South Americans, and thus made more
money exporting their goods to Europe than South American colonists. The Geography in North
America made it so that coastal regions could be accessed by the settlements in the inland
through rivers, making exporting and internal and transatlantic trade easier and cheaper.
Temperatures made it harder for Europeans to settle in South America
Temperatures in North America presented little threat to settling Europeans, but the tropical
climates of the Caribbean and South America raised European mortality rates.
More Natives lived in the Andes and Mexico than in the colder climates of North America
because native foods such as beans, squash, potatoes, and quinoa grew far more easily those
The arrival of Europeans to the new world saw Native Populations declined dramatically due to
disease, war, slavery, and ill treatment.
Colonial economy of North America
Europeans were motivated to settle in the new world in order to gain religious freedom and
financial and economic opportunities.
Settlement and exporting were closely connected in British North America.
Harold Innis - The Canadian economist Harold Innis highlighted the relationship with his ‘staples
thesis’, which contended that the growth of a region like Canada was determined by the growth
of its exports – cod fish, furs, timber – to Europe. Sales of these products provided the money to

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buy manufactured goods like cloth, tools, crockery, books, and so on. These were imported
from Britain, rather than produced in the colony, since British industries were large and realized
economies of scale that meant they could produce more efficiently than small, colonial firms.
The features of staple colonies
Staple colonies - Staple colonies had three characteristics. First, the price of the staple in the
colony was less than its price in Europe by an amount that equalled the transportation cost.
Prices in the two markets moved up and down together since they were linked by trade.
Second, exports amounted to a large share of colonial income, with the remainder being
support services. Third, the returns to settlers and their capital exceeded returns in Europe by a
margin covering the costs and risks of moving to the colony.
Pennsylvania is one example of a staple colony because the price of its main export, wheat,
was cheap enough to compete with British produce. As as result, in order to stay in the
competition, British and Pennsylvanian prices for the produce rose and fell together (locked in
As the economy in Pennsylvania grew, it attracted more labor from Europe.
Slave based production in colonial economies
Sugar production - The Portuguese introduced sugar cultivation plantations staffed by African
slaves. This system was later introduced to Brazil and the Caribbean where it proved immensely
profitable. The volume of exports determined the size of the colonial colony.
A Caribbean colony grew sugar and other crops like coffee and exported the produce to Europe.
The necessary capital and labour were supplied by European investors and African slaves, who
proved to be a cheaper source of labour than European immigrants. Mortality on sugar
plantations was very high, and new slaves were so cheap that the slaves were replenished by
purchase rather than natural increase.
Southern states in America eventually mimicked the sugar plantation system, but with tobacco,
cotton, and rice. The South was richer than the Northern Colonies, attracted more settlers, and
was the destination for more slaves.
White families traded their crops in exchange for industrial goods.
North American colonies and their literacy rate
The economies of the North American colonies did, however, share one advantage that bode
well for their future – namely, the literacy of white settlers was at least as high as in England,
which was near the top of the world league table (Table 4). By the Revolution, 70% of free men
in Virginia and Pennsylvania could sign their names, compared to 65% in England at the same
time. In New England, the rate was close to 90%, which was achieved through state schools
and mandatory attendance.

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Why was literacy high in the colonies? For the same reason it was high in England: economic
advantage. The dependence of the colonists’ standard of living on trade and foreign markets
meant that reading, writing, and calculation brought rewards. The legal system also made
literacy valuable since contracts and land titles were written documents.
Colonial economy of Latin America
Latin American colonies had three distinct regions: The Caribbean and Brazil, the Southern
Cone (Argentina, Chile, Uruguay), and Mexico and the Andes.
The Dutch trading company undercut Portuguese business in the Caribbean
The Caribbean and Brazilian colonies staple export was sugar. The Portuguese first established
the sugar business in Brazil, where the amount of African slaves was high due to the ease in
which they could be replaced. Brazil’s sugar business was undercut by the Dutch who
established the same practice, but in the Caribbean. Caribbean producers could undercut their
rivals in Brazil because they were closer to Europe (cheaper shipping costs).
Brazil went through a series of staple products, first gold, then coffee, then rubber, but in each
case ships were imported to produce the goods and the goods were exported to Europe.
Spaniards conquer the South American native population
Spanish colonies in Mexico and the Andes were initially ruled by the Aztecs and Incas who had
huge advanced societies full of agriculture, technology, and wealth. They were conquered by
the spanish Conquistadors and coerced into labor with wages either not existent or very low.
The native religions were suppressed, their texts burnt, and Catholicism established in their
stead. The natives were reduced to a subservient race whose purpose was to support the
conquerors. Hundreds of thousands of Spaniards went to America to seek their fortunes.
Natives were used for forced labor
The Native populations in these regions collapsed; nevertheless, the survivors were still used
for forced labor. The mita, a form of Inca labor conscription, was revived in the spanish form of
repartimento, which forced various native towns and cities to offer up young workers to labor in
the mines.
Half of the agricultural land in Mexico had been acquired by Spanish colonists through the
granting of the crown. These acquisitions were known as haciendas.
South American geography made staple exports difficult
Peru’s geography made it impossible for Spanish colonists to ship any sort of staple product
back to Europe due to the distance and the difficult terrain and rocky coasts.
Mexico is more puzzling. Vera Cruz, its port on the Caribbean, was no further from Europe than
New Orleans. The problem for Mexico, however, was the high cost of moving goods between
the sea and the interior plateau, which was thousands of metres in elevation. The road from
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