Global Trade - SAT Subject Test in World History

The Dutch East India Company was arguably the world's first large scale corporation with a monopoly over the Asian markets. This meant that the Company had exclusive control of the extremely lucrative spice trade coming out of the East Indies. The Dutch East India Company operated with full authority over a huge area covering South Africa through India to modern day Indonesia. This lasted until its dissolution in 1800.

Prior to the introduction of opium in China, the Chinese had a very favorable balance of trade with the British and the other European nations. For clarification, a favorable balance of trade is when you export more than you import. To the mercantilist European powers, this seemed to suggest that China was benefitting more from exchange with the Europeans than the Europeans were. To combat this situation, the British furiously introduced opium into China, fostering individual and community dependence on the drug and then increasing the price of it. The result was an economically stagnant nation whose favorable balance of trade swiftly disappeared.

Matthew Perry was a commodore in the U.S. Navy for several decades. He is most well-remembered for his forcible role in opening up Western trade with Japan in the 1850s. At the time, Japan was operating under a “closed country” policy that heavily restricted official trade with all the Western powers. Perry, acting on the orders of President Millard Fillmore, threatened the Japanese with destruction at the hands of superior American technology and backed up his threats with several “demonstrations.” The Japanese, fearing complete annihilation, acquiesced to all of Perry’s demands and opened up trade with the United States.

The Treaty of Kangawa granted the United States exclusive trading rights with Japan. Prior to the signing of the Treaty, Japan had operated as a “closed country”; this meant that the Japanese people were forbidden from trading with any of the Western powers. The United States’ Commodore Matthew Perry gained trading rights with Japan through a spectacular and threatening display of technological might that sufficiently intimidated the Japanese officials such that they were left with little choice but to acquiesce to American demands.

The Triangular Trade is a term used to describe the three-way exchange of goods, products, and human beings across the Atlantic between North America, Europe, and Africa. In the system, slaves were sent from Africa to North America, raw resources were then sent from North America to Europe, and finished products and luxury items were then sent from Europe to Africa. The system is a crucial part of the economic system of Mercantilism which prevailed in European thought at the time.

For two centuries following the original arrival of Europeans in Japan, Japan had operated a closed-door policy to foreign trade and effectively completely isolated itself; however, with the naval expedition of Matthew Perry in the 1850s, Japan was opened to American trade (forcefully and under the threat of total destruction).

Corn, potatoes, and tobacco were all originally found in the New World and then transfered to the Old World. They would each have profound effects on the nature of life in Europe and Asia. Potatoes in particular changed much of European history with their ability to grow in many types of soil. Sugarcane, on the other hand, is native to India and South Asia and was transported to the New World, where it was grown in massive quantities on plantations. Sugar plantations would have a profound effect on the structure of political, economic, and social life in many American colonies for hundreds of years.

Throughout human history, particularly during the Middle Ages and the Enlightenment Era, smallpox has been one of the worst diseases in European society in terms of the number of people it has afflicted and killed. Due to its longstanding existence within the population, many people had a natural genetic defense against it and populations were never decimated by the disease; however, when Europeans arrived in the New World, they brought smallpox with them, and the Native American populations were not biologically protected. The disease obliterated the population, in many places killing as many as ninety percent of the population. It is one of the primary reasons why Spanish conquest of Central and South America was relatively swift and unchallenged.

The term "Middle Passage" refers to the part of the triangular trade shipping route where Africans were bought or kidnapped in Africa and transported across the Atlantic Ocean to North and South America to serve as slaves on plantations. In the triangular trade route, raw resources were shipped to Europe from the New World, manufactured goods were shipped from Europe to Africa, and slaves were shipped from Africa to the New World.

The Manila Galleons connected Mexico (the New World) to Asia (the Old) from the sixteenth century on, so the triangular trade between Europe, Africa, and the New World is not the only example of Old/New World trade connections before the nineteenth century.

Governments still played a part in joint-stock companies like the VOC and the EIC-they could require a royal charter or rely on state troops for support. Limited-liability corporations, not joint-stock companies, protected their investors from bearing personal responsibility for a company's failure.

Joint-stock companies like the Dutch East India Company (VOC) or the East India Company (EIC) did make it easier for people to invest in new financial ventures, since they could buy shares but did not need to bankroll entire projects.