Presentation on theme: "Section 3.12 The Commercial Revolution. Questions to consider: What important economic changes in the early modern centuries does the term “Commercial."— Presentation transcript:
Section 3.12 The Commercial Revolution
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?
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?
What were the results of the voyages of discovery? Columbian Exchange Population Rise (1600) –England=5 mil –France=20 mil –Russia= 10 mil Price Revolution –Rise due to population growth –More gold/debasing = inflation –New land less fertile
What were the results of the voyages of discovery? New Economic Models (mercantilism) Commercial Revolution –Economic changes in Europe marked by capitalism, transformation from town to nation-centered economy –Particularly hard on the agricultural class, who were forced more and more to rely on one staple crop, such as the potato in Ireland
Changes in Commerce and Production Medieval Economic Model –Comprised of town and surrounding farmland (manors) Manors used as colony by towns –Towns controlled by Guild System Craftsmen=provincial production –Produced only upon order –Little risk, little profit, little innovation –Instituted Protectionists policies and large barriers of entry into trades –Capital = his workbench, tools, workshop
Changes in Commerce and Production Medieval Economic Model –Craftsmen, 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 needs –A new type of economic ‘actor’ arrived on the scene: The Merchant
Changes in Commerce and Production Commercial System –Merchants Act as middlemen between manufacturers and consumers Usurp guilds –Bankers Jacob Fugger –Augsburg businessman –Got rich from fustian (cotton/wool mix) –Expanded into spice, silk, mining business –Financed Hapsburgs, Popes, and Portuguese trade/merchants
Putting Out/Domestic System Cottage Industry Checkmates guilds Entrepreneur “puts out” manufacturing work to country people He owns the capital, means of production They’re out of guild’s reach
Putting Out/Domestic System Cottage Industry Checkmates guilds Entrepreneurs “put out” manufacturing work to country people He owns the capital, means of production Out of guild’s reach Wool Industry Farmer shears sheep Wool taken to Spinner Thread taken to Weaver Fabric taken to Dyer Dyed cloth Taken to Tailor Entrepreneur sells Finished product
Capital and Labor Cottage Industry –Separates owner from worker –Allows mass production New Industries –Printing Large overhead Rising literacy creates demand for books –Shipbuilding, weapons New Monarchs –Need uniforms, muskets, uniforms, food
Banking was crucial for the advent of mercantilism, and the later phase of capitalism Even Church began to allow “reasonable return” What was previously deemed usury was now allowed Banking initially centered in Amsterdam Banking
Mercantilism Economic 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 wealth Government should encourage manufacturing Favorable balance of trade- export more than you import Make country self-sufficient Acquire colonies to supply raw materials to mother-country Achieved through national regulations!!! –The Navigation Acts
How Mercantilism Works Raw materials manufactured into finished products. England trades finished products for slaves Slaves are transported to colonies Slave labor is used to acquire raw materials Raw materials taken back to England Finished product is traded for gold.
How did the New Monarchs increase regulations within mercantilism? Navigation Acts Statue of Artificers (1563) –Regulates artisans entering guilds English Poor Law (1601) –Puts indigents, poor to work –Government relief program Encouraged espionage –Turkish dyers (1582) Protective tariffs Subsidized desirable goods manufacturers Encouraged joint-stock companies –Granted monopolies