This chapter analyzes how Europe historically underdeveloped much of the world. Europe had been growing endogenously during the last few centuries of the Middle Ages. However, its big break came from the discovery of the Americas. Mexico and Peru had supplies of silver far in excess of anything available in Europe. The Spanish seizure of the Mayan and Aztec kingdoms provided Europe with a vast supply of silver currency that led to one of the greatest monetary expansions in economic history. This financed both a substantial improvement in European standards of living and a substantial increase in European military power. The chapter then looks at how the Europeans treated Java, the economic center of ancient Indonesia, as well as India. When the Industrial Revolution came, Britain developed factory textiles, which threatened to bankrupt the rest of the world's textile makers. Most of the world that was not colonized responded to the British threat by putting tariffs on English textiles. Soon all of those nations had their own textile factories and were able to compete in the world clothing market on a level playing field.