key term - Commercial Revolution Causes

Definition

The Commercial Revolution refers to the period of European economic expansion, colonialism, and mercantilism that spanned from the 11th to the 18th century. This transformation was driven by several factors, including the rise of trade routes, advancements in navigation and shipbuilding, and the emergence of new financial practices. These developments significantly shaped global markets, facilitating the exchange of goods and ideas across continents and laying the groundwork for modern capitalism.

5 Must Know Facts For Your Next Test

1. The revival of trade routes after the Crusades contributed significantly to increased commerce between Europe and Asia, sparking interest in new goods such as spices and silk.
2. Technological innovations like the magnetic compass and improvements in ship design allowed for longer voyages and better navigation, which facilitated overseas exploration.
3. The establishment of joint-stock companies in England and the Netherlands enabled merchants to invest in trade expeditions without bearing all the risks themselves.
4. Mercantilist policies led nations to seek colonies to provide raw materials and markets for finished goods, resulting in increased competition among European powers.
5. The influx of precious metals from the New World into Europe led to inflation but also fueled economic growth and the rise of a wealthy merchant class.

Review Questions

• What were some key technological advancements that contributed to the Commercial Revolution, and how did they impact global trade?
  • Key technological advancements during the Commercial Revolution included improvements in navigation tools such as the astrolabe and magnetic compass, as well as innovations in shipbuilding like the caravel. These advancements allowed European explorers to undertake longer voyages with greater accuracy, opening up new trade routes and facilitating direct contact with Asia, Africa, and the Americas. This shift not only increased the volume of goods traded but also expanded the geographical scope of commerce, creating a truly global market.
• Analyze how mercantilist policies influenced European competition during the Commercial Revolution.
  • Mercantilist policies were central to European nations' economic strategies during the Commercial Revolution. By emphasizing state control over trade and the accumulation of wealth through a favorable balance of trade, countries sought to acquire colonies that could provide raw materials while serving as markets for their manufactured goods. This led to intense competition among European powers for territorial acquisitions and control over lucrative trade routes, shaping international relations and conflicts during this period.
• Evaluate the long-term economic effects of the Commercial Revolution on global markets and trade systems.
  • The long-term economic effects of the Commercial Revolution were profound and transformative. It laid the foundation for modern capitalism by establishing practices such as joint-stock companies and stock exchanges, which facilitated larger-scale investments. The increased interconnectivity fostered by global trade networks resulted in a shift from localized economies to a more integrated world market. This change not only affected economic structures but also influenced social dynamics, leading to greater wealth disparity and the rise of a consumer culture that persists today.

Related terms

Mercantilism:

An economic theory that emphasizes the role of the state in managing the economy to enhance national power, often through regulation of trade and accumulation of wealth.

Joint-Stock Companies:

Business entities where different stocks can be bought and owned by shareholders, enabling the pooling of capital for large-scale ventures, particularly in overseas trade.

Columbian Exchange:

The widespread transfer of plants, animals, culture, human populations, technology, and ideas between the Americas and the Old World following Christopher Columbus's voyages.