1. The Commercial Revolution
Section 3.12

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 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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
Entrepreneur sells
Finished product
Dyed cloth
Taken to Tailor
Fabric taken to
Dyer

11. 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

12. Banking
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

13. 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

14. How Mercantilism Works
Raw materials manufactured into finished products.
Finished product is traded for gold.
Raw materials taken back to England
Slave labor is used to acquire raw materials
Slaves are transported to colonies
England trades finished products for slaves

15. 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