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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