World Trading System: The Modern System

Figure 1.--It was the Portuguese that rounded the Cape of Good Hope and opened trde with the East. The Spanish soon followed as well as founding an American Empire obtaining vast quantities of gold and silver bullion. The two Spamish powers tries to keep out other European countries. The Engish Sea Bogs sometimes with the aid of the Dutch set out to break that system eude open. Here we see an idealized view of a Dutch port by Abraham Storck (1644-1708). He was known for depicting ships and rigging with considerable accuracy as well as the people involved. Put your cursor on the image for a closer view.

The fledgling English Royal Navy set out to attack the closed trading system set up by the Portuguese and Spanish under the Treaty of Tordesillas (1494) and later validated by Pope Julius II (1506). The English first as freebooters and then in the spectacular engagement of the Spanish Armada in the English Channel and the North Sea broke the closed system. England at the time was a small nation. It had a small population and an economy based on raw materials, primarily the export of raw wool. It was an unlikely challenger to the superpower of the day--Spain. In fact England had more of a tradition of alliance with Spain against England's traditional foe--France. The beginning of the opposition to the Portuguese-Spanish trading system began out of the West Country where there was a tradition of smuggling. All of the important Sea Dogs (Drake, Hawkins, and Raleigh) came out of the west country and many were related to each other. These men took great risks, but with Spanish trasure ships as targets, there were enormous rewards. Another motivation was militant Protenstantism. For many of the English Sea Dogs, the Catholic Portuguese and Spanish Empires were the evil empires of the age. The early English Navy was limited to ferrying troops back and force to France. The Sea Dogs for the first time conducted long voyages with allure of Spanish trasure. As a result of these deprivations and a desire to destroy Protestantism in England, Phillip II oversaw the construction of the Great Armada and dispatched it to England. The modern world trading system grew out of the failure of the Armada. The defeat of Spanish Armada meant the beginning of the end of the world trading system dominated by Spain and Portugal and the beginning of the new trading system which would be made possible by the rise of the Royal Navy. The Dutch also attacked the Portuguese and Trade monopoly, sometimes as English allies. Other timese the Duch and Engkish fought among themselves over trade. Sir Walter Raleigh wrote perceptively at the time, "Hee that commaunds the sea, commaunds he trade, and hee that is Lord of the trade of the World is Lord of the wealth of the Worlde." At first Britain attempted to create a closed trading system like the Portuguese-Spanish system they helped dismantled. The Royal Navy first opened the Portuguese and Spanish trading systems and then the Dutch trading systems. The Loss of the American colonies resulted in a major shift in British policies and Britain turned toward a system of free trade. The Royal Navy during the Napoleonic Wars was confronted with Napoleon's Continental System and the War was in part Britain's efforts to force open the French system.


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Created: 8:09 AM 3/19/2019
Last updated: 8:10 AM 3/19/2019