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” signify?
Describe the growth of European population in the sixteenth century and the nature of this growth.
Explain 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?
Explain the general nature and purpose of mercantilism, citing examples of mercantilist policies and regulations. What comparison may be made between mercantilism and New Monarchies?

3. 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
New Economic Models (mercantilism)
Commercial Revolution
Economic changes in Europe marked by capitalism, transformation from town to nation-centered economy

4. 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
Lack of ability to network in long distance trade, capital to tie up in stocks of unsold wares, knowledge of distant customer needs

5. Changes in Commerce and Production con.
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

6. 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 sheers
sheep
Wool taken to
Spinner
Thread taken to
Weaver
Entrepreneur sells
Finished product
Dyed cloth
Taken to Tailor
Fabric taken to
Dyer

7. 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
Even Church begins to allow “reasonable return”
Usury allowed
Centered in Amsterdam

8. 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

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

11. How did the New Monarchs increase regulation 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
Subsidizing desirable good manufacturers
Encouraged joint-stock companies
Granted monopolies