Chapter 15 Part 7 The Commercial Revolution 1500

Chapter 15 Part 7 The Commercial Revolution 1500 -1700

Causes of the Commercial Revolution n Roots: The Hanseatic League n Population Growth = more consumers 1500… 70 million n 1600… 90 million n n Price Revolution: long, slow upward trend in prices Increased food prices n Increased volume of money n Higher prices = increase in supply n

Nation States n Tried to increase economic power

Rise in Capitalism Laissez-faire capitalism n Entrepreneurs n Bourgeoisie at the forefront n

Features of the Commercial Revolution Banking: n The Medici in Italy n The Fuggers in Germany n Funded all kinds of economic activity n 16 th Century: Antwerp: Europe’s banking and commercial center n 17 th Century: Amsterdam (after Dutch revolt when Antwerp was destroyed) n

The Hanseatic League Middle Ages to 16 th Century n Controlled trade in much of Northern Europe n Was a mercantile association of many German cities and towns

Chartered Companies n The State provided monopolies British East India Co. n Dutch East India Co. n n Often had fleets of ships and military and governmental powers

Joint Stock Companies n Groups of investors who pooled resources for a common venture London Co. n Plymouth Co. n Forerunners of modern corporations n Early examples of capitalism n

Stock Markets n The Bourse in Antwerp Investors purchased shares of stock n Then, as value of the company grew, so did the value of the stock n n So…investors realized a profit

The First Enclosure Movement n England Enclosed land for sheep herding and wool production n More profitable than growing food n n But food prices went up because there was less of it!

The Emergence of Cottage Industries The “Putting Out” system n Cottagers were often farmers who lost their livelihood due to the enclosure movement began to produce goods at home and sold them to merchant capitalists n First for cloth production: spinning and weaving n Then household goods: buttons, musical instruments, printing, muskets, etc. n

New Consumer goods n Sugar, rice, etc

Mercantilism 17 th Century n To the self-sufficiency of the nation Favorable balance of trade n Bullionism n Promote internal industries n Lure skilled workers into one’s country n Colonies for resources and markets for surplus goods n

The Commercial Revolution n Slowly transformed Europe from an isolated rural society to a more developed urban society n Serfs in Western Europe were able to improve their social status Since wealth could be taxed, it led to powerful nation-states n Could now finance voyages of discovery n

The Price Revolution Part of the Commercial Revolution n Rising population = rising demand = rising prices n n Gold and silver from the New World was partially responsible

The Price Revolution n Inflation stimulated production because producers got “more” money for their products Peasants benefitted when surplus became cash crops n Bourgeoisie made their money through trade and manufacturing so they could increase their social and political status n

BUT The Nobility (of the Sword) did NOT benefit from inflation n They were stuck with fixed incomes from feudal rents and their standard of living diminished over time n n The Bourgeoisie grew in political and economic significance

The Bourgeoisie were doing very well First in the Italian city-states n Was the most powerful class in the Netherlands n In France, their political power grew at the expense of the nobility n More and more influence in English politics n

The Commercial Revolution Results: n Most in Western Europe saw an increased standard of living n Especially the middle class n There was more food, a greater variety of food, the same goes for household utensils