Historical
significance involves its impact on the subject after the event being studied.
In our case, it involves how it affected how our modern day lives. In terms of
analysis, it involves the development, which would be the impact of many
causes. Capitalism, in which business is done by private companies, is the most important development made during the Age of
Exploration and Expansion because of how different life would be now without it
and the fact that many smaller developments such as the increased quantity and
demand for goods and during this era slowly led to its creation. This post will explain the
different changes that lead to the creation of Capitalism, and why other
effects of exploration don't match up to Capitalism.
The
importance of economy rose significantly from the Renaissance, with merchants
becoming heavily integrated to the society. The guilds involve collaboration
between merchants, which works similarly to companies, although it acted more
like a regulation for individual merchants. Capitalism involved private
individuals or organizations, and the increased amount of goods through the
Columbian Trade facilitated the influence of merchants on society. Before the
Renaissance, there were no trade or economy in Europe, but the introduction of
luxury and surplus goods increased value for many other products. The new desire for
exotic items originated from the desire for exploration, conquering, and
infinite possibilities. This led to higher demands for new items, alongside
with the race to control many factors of trade. Controlling the lands became the source of the raw materials, and the control of sea regulated and monitored
shipping routes. Colonies soon sprang, and nations were eager to get a foothold
on this new competition for wealth. Merchants, the wealthy, and individuals
knew that the risk was high, and so collaborated to create the first companies
to gain profit, which was split upon the amount of investment per individual. This very
much resembled what we have today, with only several examples of government
restricted economy.
Other
effects that supported the creation of capitalism in this era involving the
race for wealth involved tactics for “Balance of Trade”. The governments,
instead of trying to control companies, were willing to support them. They realized
that as long as the economy flowed well enough in their nations, they would be
able to implement more taxes. The idea of manufacturing goods at
minimal costs but resulting at higher value helped the nations sell more and
buy less from foreign actors. This led to the creation of more companies for slave trading,
manufacturing, and more transporting goods, along with the fact that they're
supported by the government. The controlling of colonies as explained above
also led to the creation of more companies.
After the explanation of different factors supporting the creation of
capitalism, it’s also important to explain why capitalism is the most important
development compared to others. The previously explained factors involving high
demand for newer goods from the New World lead to huge changes in placements of
goods. Plants never seen were exposed to Europe. Diseases were exposed to the
Americas. Same applies for animals. While this led to many creations that would
be deemed integral to our lives, capitalism was still the most important
development out of the era. The new diseases had a large affect in contributing
to the deaths of millions of Americans, although the Europeans would eventually
still be successful in conquering America without the help of the agents. The
dispersion of goods, such as food and slaves are either indirectly or directly
related to capitalism itself. Capitalism in fact, actually facilitated other changes of the Age of Exploration due to the fact that the private companies were able to trade and support trade in large amounts across sea.
Capitalism
clearly plays a large role in modern society and shapes the model of success in
current economy. Things would’ve been very different back then, and all changes
brought by the Exploration and Expansion Age only facilitated or were caused by
capitalism. The new shift of idea for wealth and the new sources for wealth
helped create companies by independent actors. Capitalism was a part of the Age of Exploration, and many other developments would never have occured without it.
