Chapter 15 Part 7 The Commercial Revolution

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

Nation States Tried to increase economic power Tried to increase economic power

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

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

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

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

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

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

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

The Emergence of Cottage Industries The “Putting Out” system The “Putting Out” system 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 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 First for cloth production: spinning and weaving First for cloth production: spinning and weaving Then household goods: buttons, musical instruments, printing, muskets, etc. Then household goods: buttons, musical instruments, printing, muskets, etc. Families often subcontracted spinsters Families often subcontracted spinsters

New Consumer goods Sugar, rice, etc Sugar, rice, etc

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

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

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

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

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

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

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