1. 16th and 17th Century Society and Economy

2. Commercial Revolution 1500-1800
Causes
Roots were in the Middle Ages (e.g. Hanseatic League- German economic alliance that controlled trade in much of northern Europe well into the 16th century.
Population growth recovered to its pre-Plague level: 70 million in 1500; 90 million in 1600; thus, more consumers existed.
The “Price revolution”: long slow upward trend in prices
It resulted from increased food prices, increased volume of money, and the influx of gold and silver from the New World, which led to an increase in the supply of goods and an accumulation of capital among large landowners who oversaw the commercialization of agriculture.
States and emerging empires sought to increase their economic power.
Rise in capitalism (laissez-faire): entrepreneurs invested money in their own businesses or other business ventures.
The middle class (bourgeoisie) led the way.

3. Features of Commercial Revolution
Banking: Antwerp-->Amsterdam were the financial centers of Europe in the 16th and 17th cent.
Chartered companies: state-provided monopolies like the Dutch East India Company
Joint-stock companies: investors pooled resources for a common purpose
This was an early prime example of capitalism.
Stock markets emerged: e.g., the bourse in Antwerp
First Enclosure movement in England: Wealthy landowners enclosed their lands to improve sheep herding and thus the supply of wool for the production of textiles.
The “putting-out” Industry emerged in the countryside for the production of cloth.
Some farmers, displaced by enclosures, supplemented their income by producing textiles at home.
New industries and New consumer goods: sugar (most important), rice, and tea
Sugar production resulted in an enormous slave trade in the Atlantic.

8. Mercantilism Replaced feudalism in most areas of Europe
Presupposed that there was a limited amount of wealth in the world and so each country tried to maximize its wealth by increasing exports and limiting imports; goal was to create a favorable balance of trade
Increased the role of the government in the economy
Countries that practiced mercantilism strove for self-sufficiency
Colonies became increasingly important to economic success

9. Significance
A slow transition occurred from a European society that was almost completely rural and isolated, to a society that was more developed with the emergence of towns.
Many serfs, mostly in western Europe, improved their social position as a result. (Serfdom was revived in eastern Europe in the 18th century)
Migration to towns and cities resulted in problems such as crime, poverty, unemployment, and sanitation problems.
Town elites such as bankers, merchants, and craft guilds struggled to govern effectively and experienced inadequate resources.
The emergence of more powerful nation states occurred.
Wealth was increasingly taxed for state purposes.
The age of exploration emerged as competing nations sought to create new empires overseas.
The bourgeoisie grew in political and economic significance.

10. Decline of Spain

11. Decline of Spanish Empire
Remember:
1. The reign of Ferdinand and Isabella began the process of centralizing power (“New Monarchs”).
2. The foundation for absolutism in Spain was laid by Charles V ( ) and Phillip II.
3. Spain’s power reached its zenith under Philip II (r )
4. The Spanish Inquisition continued to persecute those seen as heretics (especially Jews and Moors).
Decline of the Spanish economy in the 17th century
1. The Spanish economy was hurt by the loss of middle class
Moors and Jews.
2. Spanish trade with its colonies fell 60% between 1610 and 1660, largely due to English and Dutch competition.
3. The Spanish treasury was bankrupt

12. Decline of Spanish Empire Cont.
National taxes hit the peasantry particularly hard.
Inflation from the “price revolution” hurt domestic industries that were unable to export goods.
A poor work ethic stunted economic growth.
a. Upper classes hated work and continued a life of luxury.
b. Capitalism was far less prevalent than it was in the Netherlands and England.

13. Decline of Spanish Empire Cont. (Politically)
England’s defeat of the Spanish Armada in 1588 was symbolic of the beginning of the end for Spain. However, Spain had the most formidable military until the mid-17th century.
Poor leadership by three successive kings in the 17th century damaged Spain’s political power
a. Philip III, Philip IV and Charles II (one of worst
rulers in Habsburg history and the last)
b. Inbreeding may have played a role.**
Spain’s defeat in Thirty Years’ War under Philip IV was politically and economically disastrous.
a. Spain officially lost the Netherlands.
b. In 1640, Portugal reestablished its independence.
Treaty of the Pyrenees (1659): marked end of Spain as a Great Power
a. The war between Spain and France continued for 11 years after the end of the Thirty Years’ War.

14. Cont.
b. Spain lost parts of the Spanish Netherlands and territory in northern Spain to France.
The War of the Spanish Succession ( ) saw Spain lose most of its European possessions at Utrecht.

15. Golden Age of the Dutch First Half of the 17th Century

16. Dutch Republic
It developed an oligarchy of urban gentry and rural landholders to promote trade and to protect traditional rights.
The government was dominated by the bourgeoisie whose wealth and power limited the power of the state.
The government consisted of an organized confederation of seven provinces, each with representative gov’t
1. Each province sent a representative to the Estates General.
2. Each province and city was autonomous (self-governing)
4. Each province elected a stadholder (governor) and military leader.
5. During times of crisis, all seven provinces would elect the same stadholder, usually from the House of Orange (thus William of Orange)

17. Innovations in banking and finance promoted the growth of urban financial centers and a money economy.
Amsterdam became the banking and commercial center of Europe.
It was the richest city in Europe with a population of over 100,000 people.
The Bank of Amsterdam (founded in 1609)- First central bank in European history
Offered far lower interest rates than English banks; this was the major reason for its banking dominance.
It had to rely on commerce since it had few natural resources at its disposal.
a. The Dutch had the largest fleet in the world dedicated to trade.
b. They had several outstanding ports that became a hub of European trade.
It lacked government controls and monopolies that interfered with free enterprise.
The Dutch East India Company and Dutch West India Company were organized as cooperative ventures of private enterprise and the state.

18. Foreign policy
Dutch participation against the Habsburgs in the Thirty Years’ War led to its recognition as an independent country, free from Spanish influence.
War with England and France in the 1670s damaged the Dutch Republic.
Dikes in Holland were opened in 1672 (during the Dutch War) and much of the region was flooded in order to prevent the French army from taking Amsterdam.
By the end of the War of the Spanish Succession in 1713, the Dutch Republic saw a significant economic decline.
Britain and France were now the two dominant powers in the Atlantic trade.

19. The Rise of England