Portuguese economy

Definition

The Portuguese economy refers to the economic system of Portugal, which in the context of the establishment of maritime empires, became heavily influenced by trade, exploration, and colonialism during the Age of Discovery. The Portuguese economy evolved significantly with the establishment of trade routes to Africa, Asia, and Brazil, enabling Portugal to amass wealth through the export of goods like spices, sugar, and precious metals. This economic transformation played a crucial role in shaping global trade patterns and establishing maritime empires.

5 Must Know Facts For Your Next Test

1. During the 15th century, Portugal became a leading maritime power by establishing a network of trading posts along the coasts of Africa, India, and Brazil.
2. The Portuguese economy heavily relied on the export of sugar from their Brazilian colonies, which became a lucrative industry during the 16th century.
3. Portugal's exploration led to the discovery of new sea routes, which significantly reduced travel time and costs for spices and other goods, boosting trade.
4. The influx of gold and silver from colonies in Brazil contributed to inflation in Portugal but also helped finance further exploration and expansion.
5. The establishment of the Portuguese Empire facilitated cultural exchanges and the spread of Christianity, particularly in regions like Brazil and parts of Africa and Asia.

Review Questions

• How did Portugal's involvement in maritime exploration transform its economy during the Age of Discovery?
  • Portugal's involvement in maritime exploration transformed its economy by creating new trade routes that allowed for the direct importation of valuable goods like spices and sugar. The establishment of trading posts and colonies enabled Portugal to dominate key markets, leading to increased wealth and resources. This shift not only enriched the Portuguese economy but also integrated it into a broader global trading network.
• Discuss how mercantilist policies shaped the development of the Portuguese economy during its maritime expansion.
  • Mercantilist policies significantly shaped the development of the Portuguese economy by promoting state control over trade and colonization. The government implemented regulations that encouraged exports while limiting imports to create a favorable balance of trade. This led to an emphasis on establishing colonies where raw materials could be extracted and processed for export, ultimately fueling Portugal's maritime empire and enhancing its economic power.
• Evaluate the long-term impacts of the Portuguese economy's reliance on colonial trade on global economic systems in subsequent centuries.
  • The reliance of the Portuguese economy on colonial trade had profound long-term impacts on global economic systems. It established early patterns of global commerce that integrated different regions into a complex web of trade networks. The demand for goods from colonies like sugar and spices influenced agricultural practices worldwide and laid the groundwork for future imperial endeavors by other European powers. Additionally, this system contributed to the emergence of capitalism as profits from colonial trade were reinvested into further exploration and industrialization across Europe.

Related terms

Mercantilism:

An economic theory and practice prevalent in Europe during the 16th to 18th centuries that emphasized the importance of accumulating wealth through trade, maintaining a favorable balance of trade, and establishing colonies.

Caravels: A type of ship developed by the Portuguese in the 15th century that was well-suited for long-distance exploration, featuring a combination of speed and maneuverability.

Treaty of Tordesillas:

A 1494 agreement between Spain and Portugal, brokered by the Pope, that divided newly discovered lands outside Europe between the two countries along a meridian line.