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One of the most crucial events in economic history is that of the Age of Exploration. Taking place during the fifteenth to seventeenth century, this period changed the global economic landscape forever. This era of maritime discoveries, enhanced navigation, ship infrastructure and route-drawing, providing easy sailing routes to remote parts of the globe for the European powers of the day. It cannot be stressed enough how the Age of Exploration affected the future of the economies we see today - it fundamentally laid the foundation for the dynamics of the world that we see to this day.
Promotion of global trade and commerce is one of the most prevalent and enduring legacies of the Age of Exploration. The European countries such as Portugal, Spain, England, and the Netherlands, ventured into unexplored lands in a bid to find the supply of raw materials which included spices, precious metals, and other fine products. The opening of direct trade routes, especially the sea route to Asia known as the Silk Road by Sea, offered immeasurable wealth and prosperity to these countries.
The finding of new trade routes enhanced the transportation of goods and ideas much faster than had been possible before. These countries made huge profits from the variety of products that were brought in from other parts of the world. Europe became a hub for global trade where products flooded it from Asia, Africa, and the Americas. Such was the flow of goods into the European market, that apart from enriching the economies in question, it also created new markets for products and commodities that would ultimately define the future patterns and tastes of consumers both inside and outside Europe for centuries to come.
In addition, this era of trade and exploration resulted in the strengthening of multiple trading firms like the Dutch East India Company and the British East India Company. Dubbed monopolies by their governments, these companies were essential in growing commerce, creating colonies, and amassing fortunes. These companies not only had a great economic impact in their countries, but also pioneered lasting networks and trading relations that are still relevant in the patterns of global trade today.
The Age of Exploration brought with it the age of colonialism where European powers wanted to establish colonies in the new lands in which there was an abundance of resources. Colonies became providers of raw materials, principally sugar, cotton, tobacco, and timber, which were in high demand across the industrializing European economies. This provision of resources enabled industrial progress and economic growth in Europe, but at the same time, led to the exhaustion and exploitation of raw materials in said colonies. Little interests were paid to the social, cultural and economic well-faring of the inhabitants of the colonies, instead, they were mostly considered as sources of wealth with no concern for their future prosperity. Under this exploitative policy, harsh conditions for harvesting natural resources with prisoners and destruction of the environment were practiced, which still holds a damaging and enduring legacy to the modern day.
Moreover, colonization allowed European countries to gain a monopoly on some commodities, giving them an enormous advantage in the international arena. The profits made from the colonial ventures were used to grow the European economies in order to fund technological development and encourage expansion into further areas. Conversely, the colonies were left exploited, with resources degraded and economic development hampered by the age of slavery. The way of life was altered and replaced with a system that worked for the colonizers, and this has had long enduring effects. As such, while the Age of Exploration brought economic movements for Europe, it also brought sustained and entrenched economic inequalities in the world. The effects of colonialism and resource extraction still have echoes even today, for most of the former colonies are yet to come out of the shadow of the extractive economies and imbalanced distribution of wealth.
Away from the effects of trade and colonization, the Age of Exploration did see substantial technological progress and innovation. Navigational instruments, including the astrolabe and compass, went through major developments, allowing sailors to travel great lengths and explore new lands with the necessary precision. The shipbuilding techniques developed and the ships that came forth were more sturdy and sea-worthy like caravels and galleons that were capable of carrying heavy cargoes. These technological developments not only enabled exploration and trade but also had vast economic consequences. Better navigational aids and ships minimized the hazards of long distance travels making international trading and traveling more practical. The volume of trade increased between distant lands making ideas, knowledge, and technologies spread faster, creating the basis for future scientific and industrial innovations.
This age was a revolutionary time in history that had a profound mark on the world’s economy. Economic transformations such as the rise of global trade, the creation of colonies, and the emergence of new technologies paved the way to the current interdependent and connected global economy. Although the economic impacts were important and far-reaching in establishing our way of life today, it is necessary to recognise the exploitative nature of colonization and the inequitable distribution of wealth and capital that has ultimately left some of these colonized countries stricken to this very day.
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