Why (and how) did Europe colonize the world?

European agriculture, manufacturing, and innovation lagged far behind that of Asian societies even as recent as a century before Christopher Columbus encountered the New World. In the span of about 100 years, Europe evolved from an economically stagnant region, devoid of innovation and inconsequential to most global trade, to a centralized core that governed a massive amount of land and peoples all over the world.

How did Europe, a continent that was, by almost every conceivable measure, dirt poor relative to its global counterparts, manage to exercise such outsized influence and power over the world through colonization?

I checked out a lecture by Sven Beckert at Harvard that answered this question. It turns out, East Asian and Islamic civilizations were thriving in the Middle Ages. While Asian societies were generating wealth through the exchange of material innovations like porcelain, fabrics, gunpowder, and spices, European feudal lords and peasants were still languishing in their exploit of land for diminishing crop yields. So what happened that triggered a transatlantic expansionist boom in Europe?

1) The black plague created labor scarcity. Feudalism was the predominant social structure, wherein a small group of landowners accumulated wealth by squeezing agricultural surplus out of the subsistence-farming serfs who worked on their lands. In the mid 14th century, the bubonic plague swept through the continent, roughly halving the population of Europe in a matter of a few years. When there were far fewer peasants to work the lands of the landowning social class, the power dynamic shifted in favor of the common man. Revolts happened, wages grew, and the rigid social structures that bound all classes of Europeans to an unchanging economic reality began to fall apart. In short, wealth had to be created by other means beyond exploiting Europe's serf class.

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2) Attitudes towards wealth changed. Remember when St. Matthew claimed that Jesus said "It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God"? Yeah, Europeans stopped buying that. Up until the 14th century, profit-making was discouraged by both social and regulatory convention. Profit-making and lavishness were viewed as immoral, while prices of many goods were often set directly by the state. Originating in the Netherlands, public opinion evolved to view enterprise and entrepreneurship as virtuous.

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3) Institutional innovations began to emerge. The growth of city-states predicated more expensive military campaigns; the rise of merchant activity spawned more complex, ambitious expeditions. All of this required capital flows, and financial ingenuity facilitated that capital flow. Innovative financiers developed products like insurance and letters of credit, and required that governments abide by, and enforce, their agreements in order to finance state endeavors like war and trade. Eventually, innovations like capital-pooling (e.g., joint stock companies) allowed financiers to partner, limit their liability, and spread risk across multiple financiers, usually increasing the amount of capital available for expansionist projects. 

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All these social, institutional, and state-led innovations primed the pump for aggressive and centuries-long settlement activities, agricultural exportation, and eventually the subsidization by enslaved labor that begat the global market economy as we know it today.