Economic Developments and Innovations
Man is an animal that makes bargains: no other animal does this
- no dog exchanges bones with another.
—Adam Smith (1723-1790)
Learning Objectives
- H: Explain the development of economic systems, ideologies, and institutions and how they contributed to change in the period from 1750 to 1900.
Industrialization and modernization led to new philosophies and business
structures. In the Wealth of Nations (1776), Adam Smith, arguing that humans are naturally transactional, provided a foundational text in support of capitalism and the establishment of private entrepreneurship and shaped the economics and politics of the industrial age and the centuries to follow. Mercantilism, a system of economic protectionism, was replaced by a laissez-faire (“leave alone” in French) policy that promoted minimal governmental involvement in commerce and encouraged countries to reduce tariffs on trade.
These economic ideas were reflected in, and supported by, emerging transnational institutions, including banks such as the Hong Kong and Shanghai Banking Corporation (HSBC) and manufacturers such as Unilever. As trade increased, so did the availability, affordability, and variety of consumer goods.
Think As a Historian: THINK AS A HISTORIAN: EXPLAIN RELATIONSHIPS BETWEEN DEvELOPMENTS
Read more →
Reflect
REFLECT ON THE TOPIC ESSENTIAL QUESTION
1. In one to three paragraphs, explain how the development of economic systems, ideologies, and institutions contributed to change in the period from 1750 to 1900.
AP Exam Practice
Start Practice →