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Trade

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In order to gain power, Europe established colonies for about 500 years.

Establishing colonies allowed them  to create markets that would serve as a place to buy and sell manufactured goods and raw materials.

Raw materials are items that are natural, like lumber, iron, crops, and much more. These items were extracted from colonies and sent to the mother country so that they could be turned into a manufactured good. Manufactured goods are items that are built by people from raw materials. An example is collecting cotton (raw material) and turning it into a shirt (manufactured good).

Mother countries, the nations that controlled colonies, would establish colonies as a place to get raw materials and a place to sell manufactured goods.

Mercantilism is the name of this economic system. The concept allowed mother countries to gain extreme wealth, which in turn, gave them extreme power.

The countries of Europe would develop a rivalry and compete with each other for wealth, power and colonies. This resulted in just three countries dominating most of the world – Spain, France, and England.

Related Terms & Topics

Discussion Questions:

  1. Why did European countries establish colonies?
  2. What is a raw material?
  3. What is a manufactured good?
  4. Why did European countries compete with each other?

Illustrations by Justin Weinmann