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the concentration of power and wealth led to internal sources of disequilibrium

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economics on a global scale was nothing new, but mercantalism added a source of financial and dependency disequilibrium

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affects not just the relationships between states and merchants but between states and states

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a monopoly is that one person gets a right to trade and another party doesn't and the state is going to defend that right

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other people began to want those rights and they became contested privileges

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you might describe these state sponsored monopolies as "protection rackets"

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the merchants will pay the state the right to enjoy exclusive privileges

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but it's hard to protect the protection racket

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rivals began to contest one another over these privileges

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16th century: proxy wars

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Sir Francis Drake (1540-1596)

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hero to the British, a pirate to the Spaniards

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made his money not by plundering the American colonies, but by plundering the wealth from the Spaniards who were plundering the American colonies

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carried out the second circumnavigation of the world, from 1577 to 1580

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the war between England and Spain was he legendary backdrop for the pirates of the Caribbean

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18th century: mercantilist warfare

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fought against each other for the control of territory and sea lanes

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three theaters

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1. North America

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2. Caribbean

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the cockpit of empires: if you could control the Caribbean, you could control Europe's empire

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3. South Asia

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culminated in the Seven Years War

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the first world war

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wars were not inexpensive, so states had to borrow money from merchants through bonds, merchants had an interest in this as to have the state

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the racheting up of the power relationships which adds to the disequilibrium