Download Commercial Revolution

Commercial Revolution
{
16th Century: Approx. 1500-1700

A switch from land-based manorialism as the
main economic system to one based on capital
(i.e. money)
The “Change”
Significance: brought about the
age of discovery and exploration



Population growth – 60 million in 1400; 75
million in 1500; 100 million in 1600
Desire for spices and luxury goods – without
having to use expensive Italian merchants or
Muslims (Turks blocked land routes)
Rise of capitalism (laissez-faire); entrepreneurs;
bourgeoisie at the forefront
Causes



Had existed prior to Manorialism
Investment and money lending limited by
Church laws
Revived in the Middle Ages through trade and
population growth
Capitalism



Developed better navigational techniques,
maps (printing press), astrolabe
Monarchs needed wealth to consolidate their
power to become: ABSOLUTE MONARCHS
Desire to spread Catholic faith (especially with
rise of Protestant movements)
Causes (of Exploration)



Rise of banks – Medici in Florence. Would lend out
money to individuals, countries, and even Popes.
Charge interest and could invest.
Joint-Stock Companies (Dutch East India Company)
– merchants combine funds to raise large amount of
capital – each partner receives a share
Rise of the Middle Class (burgesses, bourgeoisie) –
nobles looked down on them because not of high
birth, church looked down on them for capitalist
ideas, monarchy liked because they could tax
Results
Which revolution led to the concept of banking,
the creation of guilds, and the development of
capitalism in Europe?
a. Commercial
b. Agricultural
c. Scientific
d. Industrial
Practice Question
How did the Commercial Revolution change
economic practices in Europe?
a. The manorial system was established
b. A capitalist economy was developed
c. The Church became a major economic
power
d. Colonies were granted independence
Practice Question

Mercantilism- economic system in which the
nation-state carefully controls most economic
activities, especially colonies, in order to
strengthen a nation’s economic wealth and
power (measured by gold and silver).
Goal –
Favorable
Balance of
Trade
Results Cont.

Exploration & Colonies existed to enrich
home country. They would send raw materials
to mother country where a finish product was
made. The colony would then be forced to buy
the finished product at a profit.
Results cont.
Which idea is most closely associated with the
economic concept of mercantilism?
a. Colonies existed to provide raw
materials and markets for a colonial power.
b. Wealth and power are based on land
exchanged between nobles.
c. Goods and services are traded without
government interference.
d. Property is owned collectively and
administered by the state.
Practice Question




Imports of silver from the New World and
population growth led to inflation – effected the
poor and peasants the most.
Landowners, merchants, artisans grow richreinvest money in exploration ventures
Population Growth and enclosure pushed
people of the land into the cities
Tariffs – heavy taxes placed on foreign goods to
protect home industries
Results cont.


Decline in guilds – replaced by domestic
system where raw goods were sent to
individuals to produce final product at home
Spurred Industrial Revolution by providing
increased resources and encouraging
consumer demand for finished products
Long-term Results

Colonization will lead to:


Forced Labor system of natives, then Africans as
slaves
Abuse of native peoples and destruction of
culture and Meso/South-Americans populations
(diseases)
Long-term Results




Cultural Diffusion of western beliefs to New
World
Demographic shifts with migrations of peoples
(Europeans for opportunities, Africans as labor)
Competition between European nation states
leading to eventual world wars.
Increase banking systems and financial
institutions
Long-Term Results