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COMMERCIAL REVOLUTION

COMMERCIAL REVOLUTION. (16th century: approx. 1500-1700). Significance: brought about age of discovery and exploration. Causes . population growth: 60 million in 1400; 75 million in 1500; 100 million in 1600

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COMMERCIAL REVOLUTION

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  1. COMMERCIAL REVOLUTION (16th century: approx. 1500-1700)

  2. Significance: brought about age of discovery and exploration

  3. Causes • population growth: 60 million in 1400; 75 million in 1500; 100 million in 1600 • “price revolution”: (long slow upward trend); increased food prices, increased volume of money, influx of gold & silver from the New World. • rise of capitalism (laissez-faire):entrepreneurs; bourgeoisie at the forefront

  4. Capitalism • Capitalism had existed in some forms in antiquity, but faded away with manorial system of the Middle Ages. • Investment and money lending (usury) limited by Church laws. • Revived in the late Middle Ages through trade (Hanseatic League) and population growth. • Entrpenuers ignore church laws banning usury, leading to growth in banking.

  5. Banking • First major banking firms being in northern Italy (Medici) • Northern Europe: • Fugger family of Augsburg • Jakob Fugger (1459-1525) • Financed Charles V.

  6. New Kinds of Business • Banking expanded to Antwerp in 16th c., Amsterdam in 17th c. • chartered companies: state provided monopolies in certain area (BEIC, DEIC), governments profited from ventures. • joint-stock companies: investors pooled resources for common purpose (forerunner of modern corporation), reduced risk.

  7. Other Causes • stock markets: e.g., Bourse in Germany • “Putting-out” Industry –cottage industries grow. • new industries: cloth production, mining, printing, book trade, shipbuilding, cannons & muskets • consumer goods: rice, sugar, tea, spices • mercantilism: nations sought self-sufficient economy; “bullionism”

  8. Results • Imports of silver from the New World and population growth led to inflation – effected the poor and peasants the most. • Landowners, merchants, artisans grow rich – reinvest money in exploration ventures. • Population growth and enclosure pushed people of the land into cities • Establishment of poor relief

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