2 Questions to consider: What important economic changes in the early modern centuries does the term “Commercial Revolution” encompass?How extensive was the growth of the European population in the sixteenth century?What was the nature of this growth?
3 Questions to consider: What are the origins, nature, and effects of the “putting out” system? Of what importance were the needs of the military in the rise of capitalism? What change in attitudes could be noted toward the lending of money at interest?What was the general nature and purpose of mercantilism? What are some examples of mercantilist policies and regulations? What comparison may be made between mercantilism and New Monarchies?
4 What were the results of the voyages of discovery? Columbian ExchangePopulation Rise (1600)England=5 milFrance=20 milRussia= 10 milPrice RevolutionRise due to population growthMore gold/debasing = inflationNew land less fertile
5 What were the results of the voyages of discovery? New Economic Models (mercantilism)Commercial RevolutionEconomic changes in Europe marked by capitalism, transformation from town to nation-centered economyParticularly hard on the agricultural class, who were forced more and more to rely on one staple crop, such as the potato in Ireland
6 Changes in Commerce and Production Medieval Economic ModelComprised of town and surrounding farmland (manors)Manors used as colony by townsTowns controlled by Guild SystemCraftsmen=provincial productionProduced only upon orderLittle risk, little profit, little innovationInstituted Protectionists policies and large barriers of entry into tradesCapital = his workbench, tools, workshop
7 Changes in Commerce and Production Medieval Economic ModelCraftsmen, consequently, lacked ability to network in long distance trade, lacked capital to tie up in stocks of unsold wares, and lacked knowledge of distant customer needsA new type of economic ‘actor’ arrived on the scene:The Merchant
8 Changes in Commerce and Production Commercial SystemMerchantsAct as middlemen between manufacturers and consumersUsurp guildsBankersJacob FuggerAugsburg businessmanGot rich from fustian (cotton/wool mix)Expanded into spice, silk, mining businessFinanced Hapsburgs, Popes, and Portuguese trade/merchants
9 Putting Out/Domestic System Cottage Industry Checkmates guildsEntrepreneur “puts out” manufacturing work to country peopleHe owns the capital, means of productionThey’re out of guild’s reach
10 Putting Out/Domestic System Cottage Industry Checkmates guildsEntrepreneurs “put out” manufacturing work to country peopleHe owns the capital, means of productionOut of guild’s reachWool IndustryFarmer shearssheepWool taken toSpinnerThread taken toWeaverEntrepreneur sellsFinished productDyed clothTaken to TailorFabric taken toDyer
11 Capital and Labor Cottage Industry Separates owner from worker Allows mass productionNew IndustriesPrintingLarge overheadRising literacy creates demand for booksShipbuilding, weaponsNew MonarchsNeed uniforms, muskets, uniforms, food
12 BankingBanking was crucial for the advent of mercantilism, and the later phase of capitalismEven Church began to allow “reasonable return”What was previously deemed usury was now allowedBanking initially centered in Amsterdam
13 MercantilismEconomic theory in which a nation’s power depended on keeping and increasing its gold supplies by maintaining a favorable balance of trade“Doctrine of Bullionism”- gold is wealthGovernment should encourage manufacturingFavorable balance of trade- export more than you importMake country self-sufficientAcquire colonies to supply raw materials to mother-countryAchieved through national regulations!!!The Navigation Acts
14 How Mercantilism Works Raw materials manufactured into finished products.Finished product is traded for gold.Raw materials taken back to EnglandSlave labor is used to acquire raw materialsSlaves are transported to coloniesEngland trades finished products for slaves
15 How did the New Monarchs increase regulations within mercantilism? Navigation ActsStatue of Artificers (1563)Regulates artisans entering guildsEnglish Poor Law (1601)Puts indigents, poor to workGovernment relief programEncouraged espionageTurkish dyers (1582)Protective tariffsSubsidized desirable goods manufacturersEncouraged joint-stock companiesGranted monopolies