THE COMMERCIAL REVOLUTION
Main Themes:
1. Nations were looking for new trade routes which led to new explorations.
2. Nations sought new sources of wealth and new economic theories and practices to
deal with
this new-found wealth.
3. Nations had the desire for increased world power through their colonial empires.
I. The Economy of the Commercial Revolution:
A. mercantilism --> the colony existed for the benefit of the mother country; a
monpolistic global eco.
system.
B. bullionism --> the accumulation of precious metals by governments was seen as
very important to the
prestige and power of a modern nation.
C. capitalism --> private ownership of the means of production and
distribution; capital is invested in
order to produce more capital.
D. Emergence of a new eco. system:
-- new No. European banking interests --> Fugger family.
-- charter banks --> Bank of Amsterdam (1609); bank of London (1694).
-- stock exchange --> Bourse at Antwerp.
-- insurance companies --> Lloyd's of London (maritime -- ship
catalogs/classifications).
-- joint-stock companies.
E. Development of the Domestic System:
-- increased specialization of skills within a more efficient system of over-all
production.
-- farm families can supplement their incomes.
-- the accumulation of capital in the hands of the entrepreneur made possible the
purchase of raw
material in greater bulk.
-- the capitalist entrepreneur could now operate without the restrictions imposed
by the urban guilds.
II. The Age of European Discovery:
A. Columbus and the first conquistadores.
-- ecological exchange and its effects on both the Americas and Europe and
Africa.
-- destruction of Amer-Indian cultures.
B. Establishment of European Colonial Empires in the Americas and Asia.
-- encomienda system (Latin America).
-- Portuguese/Dutch/British/French trade in Southeast Asia.
III. Effects of the Commercial Revolution:
A. inflation --> "price revolution".
B. population increase --> emergence of the middle class.
C. increase in world trade.
D. shift from the old market ports of the Mediterranean to the trans-Atlantic trade.
E. new trade restrictions (ex.: East India Co. --> royal monopolies).
F. economic depression at the end of the 16c.
G. African slave trade established (Triangle Trade).
H. changes in the social structure (role of the nobility, esp.) in Eastern and Western
Europe.