Chapter 15 Part 7

1. Chapter 15Part 7 The Commercial Revolution 1500-1700

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

3. Nation States • Tried to increase economic power

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

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

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

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

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

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

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

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

12. New Consumer goods • Sugar, rice, etc

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

14. The Commercial Revolution • 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 • Since wealth could be taxed, it led to powerful nation-states • Could now finance voyages of discovery

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

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

17. BUT • 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 • The Bourgeoisie grew in political and economic significance

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

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