The circle completed: 1500–1800

This chapter focuses on a key period in the expansion of the international economy, AD 1500–1700, which is symbolically completed with the Manila galleon, which for the first time created a regular commercial link across the Pacific Ocean. It begins by considering the imperial background of a competitive multi-cell European system with its first multinational corporations, such as the East India Company. It analyses the roles of population change, varying factor endowments and a developing market system in integrating the global economy. It stresses the way in which Europe forged ahead, stressing it ability to innovate and imitate best-practice. It led in five key area of innovation – the military and maritime areas, printing, timekeeping and bookkeeping, noting the particular importance of the first two. It goes on to describe the European breakout in exploration and exploitation of opportunities in the world economy.