The Commercial Revolution
The Commercial Revolution
• What?
– A five century economic transition from feudalism to
industrial capitalism
• Manor  Town  Nation
– Rise of capitalism
• Early Developments
– Crusades  Revival of Trade in Mediterranean
– Growth of Italian City-States and Hanseatic League
• Major Aspects of the CR – (1500-1700)
– Commercialization of Industry
• Cottage Industry, aka “Putting out” System
– New Capitalistic Ventures
– Mercantilism
Causes of the CR
• Three factors that furthered the growth of the
CR between 1500-1700
– Opening of the Atlantic
– Population growth during the 16th century
– “Price Revolution”
• Long, slow upward trend in prices of consumer goods
• Major Cause: Population increase  Increase in demand
– Additional Cause: Influx of gold and silver from New World
• Effect: Increased the economic status of the bourgeoisie
while hurting the economic status of the nobility
Features of the CR
1) Commercialization of Industry
– Cottage Industry Emerges
• Supported by national monarchs, these merchantcapitalists began to usurp the economic power held by
guilds since the Middle Ages
• Profits will fund the birth of several new industries!
2) New Capitalistic Ventures
– Development of Banking
• Family banking (Fuggers and Medicis) replaced by state
banks in Holland
• Antwerp: Financial Center in 16th century
• Amsterdam: Financial Center in 17th century
Features of the CR
2) New Capitalistic Ventures
– Stock Markets Emerge
• Surplus capital will be invested in developing
industries
– Bourse in Antwerp
– Amsterdam Exchange
– London Stock Exchange
– Joint-Stock Companies
• Prime example of early capitalism
• Investors pool money to fund economic pursuits
(oftentimes, overseas)
– Dutch East India Company
– British East India Company
Features of the CR
2) New Capitalistic Industries
– Mining
– Shipbuilding
– Artillery
– Printing
– Global Trade
• Triangular Trade, aka “Atlantic System”
• Result: Culture of Leisure Consumption
– Thanks to Columbian Exchange and settlement of New
World
– Sugar, rice, tea, coffee, chocolate, tobacco
Features of the CR
3) Mercantilism – 17th cent. development
– Goal: Self-sufficient national economy
– How: Create a favorable balance of trade through
exporting more than importing
• Why? Bullionism!!! Political power rested upon
economic power, and economic power was based upon
a country’s supply of gold and silver
– MUST HAVES:
• Colonies!!!
– Provide raw materials and markets for finished goods
• Protectionist Tariffs
• Dominant merchant marine and navy
• Mother country has manufacturing industries
Significance of the CR
• Emergence of powerful sovereign states
– Spain  Dutch Republic  France  England
• Bourgeoisie experienced huge increase in political
and economic status
– Evident in Renaissance Italy, the Dutch Republic, Age
of French Absolutism, and English Parliament during
the 17th century
• Establishment of an “Old Regime” social structure
– Long Term Cause of Enlightenment Criticism and
French Revolution
• Establishes the foundations necessary for the AR
and the IR!!!!