1.10 The Commercial Revolution
3 min read•january 8, 2023
Christine Lin
Isabela Padilha Vilela
Christine Lin
Isabela Padilha Vilela
Economic Effects
The was a sweeping reform of Europe’s economic system centered around trade and developing ideas of . New innovations in banking and finance promoted growth for financial centers and the economy. Here are some important innovations in banking and finance:
- Financial trasactions began to be registered twice, as any trasaction results in someone's debit and someone else's credit. This was an important measure that revolutionized the way finance was dealt with at the time and has implications to the field until this day.
- It was a Dutch Bank established in the 17th Century known to be the first modern central bank. It set the model for the other central banks that were created centuries after its creation.
The 🇳🇱🇮🇳 - Known to be the first Multinational company of history, it was created with the purpose of facilitating economic ties between the Dutch and East Asia. It played a major role in the enrichment of the Dutch Republic.
The 🇬🇧🇮🇳- Similarly to the , it granted a monopoly of East Asian traded goods to the English empire.
Agricultural innovation was catalyzed by the in the north and the in the Mediterranean. There were also commercial innovations in the selling of crops, for example:
- It was a period in which public/collective lands began to have private owners. This measure obviously affected the poorest classes the most, as they lost lands they needed for their livelihood.
Freehold tenure - It refers to the idea that the land owner has the property of a land for perpetuity, or rather, for an indefinite amount of time. It granted significant power to elites that were able to make profits out of a land for long periods of time.
It is possible to say that, although agriculture became more predominant and productive in Europe, these technological advancements also deepened inequality and caused great demographic transformations. 👩🌾
Western Europe gained many commodities from the New World which changed the lives of those living in Europe. Potatoes, corn, tobacco, sugar, and chocolate were all imported from the New World (through the ). Gold and silver were also imported and were used as currency. Consumers now had more access to these metals, leading to inflation, especially in Spain.
This prompted the , which was a period of high inflation caused by the expanding market economy as a result of commercializing agriculture. Population also recovered to Pre-Plague levels, which caused uneven price increases and a generally higher cost for agricultural commodities. Living standards plummeted due to stagnant wages in an increasingly pricey economy.
Image Courtesy of The Great Courses Daily
Social Effects
With the advancing commercial and economic revolutions, tradition of hierarchy and status continued. However due to economic changes, there was a growth of a new economic elite class that grew in power and wealth.
The abundance of food also led to an increase in the population. This increase in population led to the migration from rural areas to urban centers. Cities offered opportunities for business owners and offered the idea of . Merchants, bankers, and capitalists became the middle class and grew in size and economic power.
Due to this Commercial Revolutions, Western Europe shifted to free peasantry and commercial agriculture. However, in the East, serfdom continued and nobles continued to dominate economic life on large estates. In cities, migrants challenged the and crafted guilds to govern as a revolt to the elites.
As a response to these economic and environmental challenges for the population, events like the occurred which would delay marriages and childbearing. This ultimately led to a decrease in population growth and a decreased economic burden for families.
In addition, some demographic regional differences occurred in the social hirearchy system of Europe. For instance, whereas the west of Europe exhibited a free peasant class, serfdom was still codified in the east and nobles had a lot of political power there.
Image Courtesy of Wikipedia
🎥 Watch: AP European History - Medieval Europe
Key Terms to Review (16)
Bank of Amsterdam
: The Bank of Amsterdam was a public bank established in 1609 in Amsterdam, Netherlands. It played a significant role in the city's financial system and was one of the earliest examples of a central bank.British East India Company
: The British East India Company was an English company formed for the exploitation of trade with East and Southeast Asia and India, incorporated by royal charter on December 31, 1600.Capitalism
: Capitalism is an economic system where private entities own the factors of production. The four factors are entrepreneurship, capital goods, natural resources, and labor.Columbian Exchange
: The Columbian Exchange refers to the widespread transfer of plants, animals, culture, human populations (including slaves), technology, diseases between America and Afro-Eurasian hemispheres following Christopher Columbus' voyages in 1492.Commercial Revolution
: The Commercial Revolution refers to the period of European economic expansion, colonialism, and mercantilism which lasted from approximately the late 13th century until the early 18th century. It was characterized by an increase in trade, exploration, and wealth accumulation.Craft Guilds
: Craft guilds were associations of artisans or merchants who controlled the practice of their craft in a particular town during the Middle Ages.Double-entry bookkeeping
: Double-entry bookkeeping is a method that all businesses use to keep their books - each financial transaction is entered twice into the system - once as debit and once as credit.Dutch East India Company
: The Dutch East India Company was a powerful company established by royal charter in 1602 to establish and direct trade throughout Asia.Enclosure movement
: This was a process in England during 18th century where fencing or hedging large blocks of arable land were done for experiments with new farming methods. It led to increased productivity but also caused displacement of small farmers.Freehold Tenure
: Freehold tenure is a type of land ownership where the owner has complete control over the property, including the right to sell or pass it on to heirs. It was common in medieval Europe.Little Ice Age
: The Little Ice Age was a period of cooling that occurred after the Medieval Warm Period. It took place from the 14th to the 19th century and was characterized by harsh winters, shorter growing seasons, and a general decrease in agricultural productivity.Merchant Elites
: Merchant elites refer to individuals or families who have gained significant wealth and influence through trade and commerce.Price Revolution
: The Price Revolution refers to the period in European history when inflation rose rapidly over a long period, and money devalued. This occurred from the late 15th century to the first half of the 17th century.Social Mobility
: Social mobility refers to the ability of an individual or family to move up or down the social and economic ladder within a society.Three-crop field rotation
: This is a farming practice where three types of crops are grown in the same field, but at different times of the year. This method helps to maintain soil fertility and reduce pest and disease problems.Two-crop rotation
: This is an agricultural technique where two types of crops are grown on the same land but during different seasons. It helps prevent nutrient depletion and controls weeds and pests.1.10 The Commercial Revolution
3 min read•january 8, 2023
Christine Lin
Isabela Padilha Vilela
Christine Lin
Isabela Padilha Vilela
Economic Effects
The was a sweeping reform of Europe’s economic system centered around trade and developing ideas of . New innovations in banking and finance promoted growth for financial centers and the economy. Here are some important innovations in banking and finance:
- Financial trasactions began to be registered twice, as any trasaction results in someone's debit and someone else's credit. This was an important measure that revolutionized the way finance was dealt with at the time and has implications to the field until this day.
- It was a Dutch Bank established in the 17th Century known to be the first modern central bank. It set the model for the other central banks that were created centuries after its creation.
The 🇳🇱🇮🇳 - Known to be the first Multinational company of history, it was created with the purpose of facilitating economic ties between the Dutch and East Asia. It played a major role in the enrichment of the Dutch Republic.
The 🇬🇧🇮🇳- Similarly to the , it granted a monopoly of East Asian traded goods to the English empire.
Agricultural innovation was catalyzed by the in the north and the in the Mediterranean. There were also commercial innovations in the selling of crops, for example:
- It was a period in which public/collective lands began to have private owners. This measure obviously affected the poorest classes the most, as they lost lands they needed for their livelihood.
Freehold tenure - It refers to the idea that the land owner has the property of a land for perpetuity, or rather, for an indefinite amount of time. It granted significant power to elites that were able to make profits out of a land for long periods of time.
It is possible to say that, although agriculture became more predominant and productive in Europe, these technological advancements also deepened inequality and caused great demographic transformations. 👩🌾
Western Europe gained many commodities from the New World which changed the lives of those living in Europe. Potatoes, corn, tobacco, sugar, and chocolate were all imported from the New World (through the ). Gold and silver were also imported and were used as currency. Consumers now had more access to these metals, leading to inflation, especially in Spain.
This prompted the , which was a period of high inflation caused by the expanding market economy as a result of commercializing agriculture. Population also recovered to Pre-Plague levels, which caused uneven price increases and a generally higher cost for agricultural commodities. Living standards plummeted due to stagnant wages in an increasingly pricey economy.
Image Courtesy of The Great Courses Daily
Social Effects
With the advancing commercial and economic revolutions, tradition of hierarchy and status continued. However due to economic changes, there was a growth of a new economic elite class that grew in power and wealth.
The abundance of food also led to an increase in the population. This increase in population led to the migration from rural areas to urban centers. Cities offered opportunities for business owners and offered the idea of . Merchants, bankers, and capitalists became the middle class and grew in size and economic power.
Due to this Commercial Revolutions, Western Europe shifted to free peasantry and commercial agriculture. However, in the East, serfdom continued and nobles continued to dominate economic life on large estates. In cities, migrants challenged the and crafted guilds to govern as a revolt to the elites.
As a response to these economic and environmental challenges for the population, events like the occurred which would delay marriages and childbearing. This ultimately led to a decrease in population growth and a decreased economic burden for families.
In addition, some demographic regional differences occurred in the social hirearchy system of Europe. For instance, whereas the west of Europe exhibited a free peasant class, serfdom was still codified in the east and nobles had a lot of political power there.
Image Courtesy of Wikipedia
🎥 Watch: AP European History - Medieval Europe
Key Terms to Review (16)
Bank of Amsterdam
: The Bank of Amsterdam was a public bank established in 1609 in Amsterdam, Netherlands. It played a significant role in the city's financial system and was one of the earliest examples of a central bank.British East India Company
: The British East India Company was an English company formed for the exploitation of trade with East and Southeast Asia and India, incorporated by royal charter on December 31, 1600.Capitalism
: Capitalism is an economic system where private entities own the factors of production. The four factors are entrepreneurship, capital goods, natural resources, and labor.Columbian Exchange
: The Columbian Exchange refers to the widespread transfer of plants, animals, culture, human populations (including slaves), technology, diseases between America and Afro-Eurasian hemispheres following Christopher Columbus' voyages in 1492.Commercial Revolution
: The Commercial Revolution refers to the period of European economic expansion, colonialism, and mercantilism which lasted from approximately the late 13th century until the early 18th century. It was characterized by an increase in trade, exploration, and wealth accumulation.Craft Guilds
: Craft guilds were associations of artisans or merchants who controlled the practice of their craft in a particular town during the Middle Ages.Double-entry bookkeeping
: Double-entry bookkeeping is a method that all businesses use to keep their books - each financial transaction is entered twice into the system - once as debit and once as credit.Dutch East India Company
: The Dutch East India Company was a powerful company established by royal charter in 1602 to establish and direct trade throughout Asia.Enclosure movement
: This was a process in England during 18th century where fencing or hedging large blocks of arable land were done for experiments with new farming methods. It led to increased productivity but also caused displacement of small farmers.Freehold Tenure
: Freehold tenure is a type of land ownership where the owner has complete control over the property, including the right to sell or pass it on to heirs. It was common in medieval Europe.Little Ice Age
: The Little Ice Age was a period of cooling that occurred after the Medieval Warm Period. It took place from the 14th to the 19th century and was characterized by harsh winters, shorter growing seasons, and a general decrease in agricultural productivity.Merchant Elites
: Merchant elites refer to individuals or families who have gained significant wealth and influence through trade and commerce.Price Revolution
: The Price Revolution refers to the period in European history when inflation rose rapidly over a long period, and money devalued. This occurred from the late 15th century to the first half of the 17th century.Social Mobility
: Social mobility refers to the ability of an individual or family to move up or down the social and economic ladder within a society.Three-crop field rotation
: This is a farming practice where three types of crops are grown in the same field, but at different times of the year. This method helps to maintain soil fertility and reduce pest and disease problems.Two-crop rotation
: This is an agricultural technique where two types of crops are grown on the same land but during different seasons. It helps prevent nutrient depletion and controls weeds and pests.
Resources
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.