Evolution of Markets

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2.1 Surplus production and Trade  Increase in specialised production creates opportunity for trade.  Looking at ways in which surplus production affected trade

Development of markets  Increase in supply resulted in need for more outlets  This resulted in markets and fairs  Trade activity took place on village squares of cities  Quay sides also popular spots  Regional trade fairs  Traders from other countries  Specialised market centres developed

Development of trade  Trade was limited but well organised  Contracts drawn up  Buying on credit was established  New class came into being

Traveling Merchants  Traveling merchants  Earned income from trade  Brought closer contact between communities and towns  Spread economic development in areas  Trading houses

 Quantity of goods and competition increased  Look for more markets  Traders began to travel vast distances  Country and international trade spread across Asia and Europe  Large empires helped trade prosper

Development of Trade routes and transportation

 Each stage of human development, particular transport mode developed  First was use of animals and human porters.  Transport networks for trade developed.

 Large quantities required cheap dependable transport  Egypt and China use of river systems  Ocean going ships were build  Military used to protect routes e.g. Spice Route  Overland trade routes developed.

The Spice Route

Arabian-Peninsula route

The Silk Road

The Amber Road

2.3 Growth of towns and markets  Populations increased, people began to settle in communities and towns  Towns developed near a resource  End of feudalism lead to growing towns and cities  Trade development lead to increase in town contact.  Population was due to a demand for manufactured goods  Merchants playing active role in growth of towns  Fighting for the rights of citizens and had leading role in matters

 Towns acquired new forms of government systems  Council and Mayor elected to manage towns.  Cities divided into 3 groups  Commercial cities  Industrial cities  Administrative cities

2.4 Specialisation of labour and the emergence of guilds  Variety of products increased  Different settlements specialised in different products  Due to different resources and abilities  New middle class developed  Guilds formed  Each occupation had its own guild

Aims of guilds  Groups were formed to protect their trade or profession  First : exclude outside traders from doing business in a certain area  Fix and maintain prices, wages, quality,standards of workmanship and working conditions  Took care of members and their families  Arrange festivals for members  Provide training

2.5 Mercantile law and development of business forms  Improvement in transport and growth of trade led o increase in international trade.  Business concepts were adopted and improved by different countries  Mercantile law  Establishes standard of conduct acceptable to local authorities.  Standards were minimal  Formed basis of contracts, bill of sale, warehouse receipts etc  Any merchant who violated the code was expelled

Development of legal business formats  Forming societies of merchants  Early form of partnership developed  One provided capital other undertook the handling  Commercial practices became standardised

 Company as a business standard developed  Companies began to have numerous partners  This established a corporation  Companies were involved in trading,mining, and bankning  British East India company

Main legal business formats  Simple partnerships: equally liable  Limited partnership: only active partner is liable  Corporations: limited liability

2.6 Technological progress  Progress impacted agriculture, mining and building construction  Technological innovations are linked to economic activities of the times

Mining  Improved technology  Establishment of new mining sites  Resulted in large scale and better quality production  Water power used in raising ore from shafts

Navigation  Advances in shipbuilding  Navigational techniques

Military Technology  Military technology improved with the development of plate armour  Steel crossbows  Gunpowder  Cannons

Architecture  High rising Gothic style  Medieval fortifications  Era titled “Age of Castles”

Cottage industry  Spinning Wheel  Increased productivity and thread-making

Printing  Cheap paper  Paper mills  Mechanical printing mills

Other inventions  Water mills  Wind mills  Spectacles  Mechanical clocks  Wheelbarrows