The Commercial
Revolution
th
17
CENTURY
EUROPE
Although most of Europe remained agricultural
during this period, the fastest growing part of the
European economy was the trade of goods. This
was due to European exploration.
GLOBAL TRADE
The Commercial Revolution in Europe marked
an important step from Europe being a local
economy TO the formation of a truly global
economy.
TRADE
• People began to produce
more goods for sale rather
than for their own use.
• Europe imported goods
from the Americas, Ming
China, and India.
• Europe exported goods
such as woolen cloth,
lumber, and finished
goods.
MERCANTILISM
European kings hoped to increase their
power through the system of mercantilism.
Mercantilism - an economic system used to
unify and increase the power and monetary
wealth of a country by strict government
regulation of trade and foreign trading
monopolies.
MERCANTILISM
• Mercantilists
removed trade
barriers with other
countries.
• Wealth and power
were based on
amassing gold and
silver to pay soldiers
to defend the state.
• For this reason,
European countries
began to establish
overseas colonies.
MERCANTILISM
• What is the easiest
way to ensure you
have the resources
you need?
– Take over that land,
and take the
resources (colonies)
– This led to a series
of wars between
the major European
powers. They each
wanted control for
resources.
TRANS-OCEANIC TRADE
• The creation of European colonial empires
resulted in increased trans-oceanic trade
(trade across oceans).
• As a result, new institutions were created to
aid people in trade. These included
– Banks
– Stock Exchanges
– Insurance Companies
CAPITALISM
• The rise of capitalism occurred as
the private ownership of goods
and opportunities for investment
led to a merchant class.
• Business owners risked their
capital (money) in a business in
order to make profits.
• The growth of new businesses led
to a demand for huge sums of
money.
• Over time, a middle class grew and
money became a sign of wealth in
the growing social classes.
Merchant Class
JOINT-STOCK COMPANIES
• To raise the large sums,
joint-stock companies were
formed. They were
privately owned companies
that sold stock to investors.
Investors buying stock
– Investors bought the stock
for a share of the profit.
– It reduced individual risk in
new expeditions.
– When investors purchased
stock, the companies
accumulated money to buy
large amounts of raw
materials.
BANKING
• Banks developed new
ways of raising and
lending money.
• Bankers and merchants
became more
influential in
government.
• Banking became a
respectable profession
as the Church eased
restrictions on money
lending and the
charging of interest.
THE COMMERICAL REVOLUTION
A SUMMARY
• The Commercial Revolution occurred as
Europeans entered a new age of global trade.
• As a result of the Commercial Revolution,
Europeans had many more products from which
to choose.
– tea, sugar, coffee, cotton cloth
– more books and new forms of learning and
entertainment
– more choices in occupation as well as consumption
– these advances led to a rising standard of living