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The 1500s and early 1600s also introduced the process of commodification    to the New World. American silver, tobacco, and other items, which were used by native peoples for ritual purposes, became European commodities with a monetary value that could be bought and sold. Before the arrival of the Spanish, for example, the Inca people of the Andes consumed chicha , a corn beer, for ritual purposes only. When the Spanish discovered chicha, they bought and traded for it, turning it into a commodity instead of a ritual substance. Commodification thus recast native economies and spurred the process of early commercial capitalism. New World resources, from plants to animal pelts, held the promise of wealth for European imperial powers.

The columbian exchange

As Europeans traversed the Atlantic, they brought with them plants, animals, and diseases that changed lives and landscapes on both sides of the ocean. These two-way exchanges between the Americas and Europe/Africa are known collectively as the Columbian Exchange    ( [link] ).

A map shows the “Columbian Exchange” of goods and diseases. Goods include crops such as maize, potatoes, tobacco, beans, squash, peppers, cacao, cassava, and manioc traveling east as well as rye, wheat, rice, sugar, and tea traveling west. Animals such as cattle, horses, and pigs traveled westward. Diseases include syphilis, malaria, smallpox, yellow fever, and plague.
With European exploration and settlement of the New World, goods and diseases began crossing the Atlantic Ocean in both directions. This “Columbian Exchange” soon had global implications.

Of all the commodities in the Atlantic World, sugar proved to be the most important. Indeed, sugar carried the same economic importance as oil does today. European rivals raced to create sugar plantations in the Americas and fought wars for control of some of the best sugar production areas. Although refined sugar was available in the Old World, Europe’s harsher climate made sugarcane difficult to grow, and it was not plentiful. Columbus brought sugar to Hispaniola in 1493, and the new crop was growing there by the end of the 1490s. By the first decades of the 1500s, the Spanish were building sugar mills on the island. Over the next century of colonization, Caribbean islands and most other tropical areas became centers of sugar production.

Though of secondary importance to sugar, tobacco achieved great value for Europeans as a cash crop as well. Native peoples had been growing it for medicinal and ritual purposes for centuries before European contact, smoking it in pipes or powdering it to use as snuff. They believed tobacco could improve concentration and enhance wisdom. To some, its use meant achieving an entranced, altered, or divine state; entering a spiritual place.

Tobacco was unknown in Europe before 1492, and it carried a negative stigma at first. The early Spanish explorers considered natives’ use of tobacco to be proof of their savagery and, because of the fire and smoke produced in the consumption of tobacco, evidence of the Devil’s sway in the New World. Gradually, however, European colonists became accustomed to and even took up the habit of smoking, and they brought it across the Atlantic. As did the Indians, Europeans ascribed medicinal properties to tobacco, claiming that it could cure headaches and skin irritations. Even so, Europeans did not import tobacco in great quantities until the 1590s. At that time, it became the first truly global commodity; English, French, Dutch, Spanish, and Portuguese colonists all grew it for the world market.

Questions & Answers

Ayele, K., 2003. Introductory Economics, 3rd ed., Addis Ababa.
Widad Reply
can you send the book attached ?
Ariel
?
Ariel
What is economics
Widad Reply
the study of how humans make choices under conditions of scarcity
AI-Robot
U(x,y) = (x×y)1/2 find mu of x for y
Desalegn Reply
U(x,y) = (x×y)1/2 find mu of x for y
Desalegn
what is ecnomics
Jan Reply
this is the study of how the society manages it's scarce resources
Belonwu
what is macroeconomic
John Reply
macroeconomic is the branch of economics which studies actions, scale, activities and behaviour of the aggregate economy as a whole.
husaini
etc
husaini
difference between firm and industry
husaini Reply
what's the difference between a firm and an industry
Abdul
firm is the unit which transform inputs to output where as industry contain combination of firms with similar production 😅😅
Abdulraufu
Suppose the demand function that a firm faces shifted from Qd  120 3P to Qd  90  3P and the supply function has shifted from QS  20  2P to QS 10  2P . a) Find the effect of this change on price and quantity. b) Which of the changes in demand and supply is higher?
Toofiq Reply
explain standard reason why economic is a science
innocent Reply
factors influencing supply
Petrus Reply
what is economic.
Milan Reply
scares means__________________ends resources. unlimited
Jan
economics is a science that studies human behaviour as a relationship b/w ends and scares means which have alternative uses
Jan
calculate the profit maximizing for demand and supply
Zarshad Reply
Why qualify 28 supplies
Milan
what are explicit costs
Nomsa Reply
out-of-pocket costs for a firm, for example, payments for wages and salaries, rent, or materials
AI-Robot
concepts of supply in microeconomics
David Reply
economic overview notes
Amahle Reply
identify a demand and a supply curve
Salome Reply
i don't know
Parul
there's a difference
Aryan
Demand curve shows that how supply and others conditions affect on demand of a particular thing and what percent demand increase whith increase of supply of goods
Israr
Hi Sir please how do u calculate Cross elastic demand and income elastic demand?
Abari
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Source:  OpenStax, U.s. history. OpenStax CNX. Jan 12, 2015 Download for free at http://legacy.cnx.org/content/col11740/1.3
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