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Events that took place between 1450 and 1800 are known as the “Commercial Revolution”. These events marked a transition from a mostly slow economy in mediaeval Europe into a more rapidly evolving system that was more dynamic. In this sense, the term “Commercial Revolution” refers to the growth in trade and commerce from the 15th century onward. We call it a revolution because it was so big and well-planned. These countries took the initiative to grow and strengthen their economic and political power, leading to this growth. Spain, Portugal, Holland, and England were the countries in this group.
Let’s now look at some of the most important parts of the Commercial Revolution, such as the discovery and conquest of new countries around the world.
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Impacts on Trade
Europe used land routes to trade with countries in the East, like India and China, for a long time. The cities of Venice and Genoa in the north of Italy were the most important places for trade.
People who bought spices and silks from the East had to pay a lot for them because Italy had a monopoly on the trade. So, Portugal and Spain wanted to find a way to get to the Orient that was not controlled by Italy. As a result, trade underwent the following changes:
- The Sea Routes: In this way, a shift from land routes to sea routes began. The Portuguese were the first people to try new things when it came to navigation and exploration
- Vasco da Gama’s Voyage: You probably know about the historic voyage of Vasco da Gama, who sailed around the southern tip of Africa and landed on the Indian coast in 1498
- Christopher Columbus: Christopher Columbus, an Italian who was a friend of the Spanish King and Queen, set sail for India from the coast of Spain. That didn’t stop him from getting to North America
This discovery of America by accident was advantageous for Spain. It set the stage for what would become a Spanish empire in the Americas.Soon, Britain, France, and Holland came after Spain and Portugal. They took control of parts of India and the African parts of Africa and Malacca. They also took over the Spice Islands, West Indies, and South America. Commerce grew into a global business. The Italian cities lost their monopoly.
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The Textile Industry Flourished
- People from the East brought spices and textiles to Europe
- Tobacco came from North America. Cocoa, chocolate, and quinine came from South America
- Ivory came from Africa. Slaves were brought from Africa
- There were more places to trade when the Americas were found
- Spices and cloth were on the list before, but gold and silver were later added
As the Commercial Revolution went on, the status of Portugal and Spain decreased. England, Holland, and France took over Europe and the rest of the world.
The Growth of the Banking Sector
One of the most important things about the Commercial Revolution was the rise of banking. This made it easier for businesses across Europe to run their own businesses. The “cheque” was invented in the 1800s. Paper money took over for gold and silver coins.
As trade and commerce grew, businesses had to come up with new ways to deal with this growth:
- In the 16th century, “regulated companies” began to appear. These were groups of merchants who worked together for a common goal
- New ventures called “joint-stock” companies emerged in the 17th century. Here, many people received a share of the money
- In some cases, their governments gave them a “charter” or a contract that made them the only ones to carry out certain functions in a certain area. British East India Company and Dutch East India Company are two examples
A New Class Evolved
As we discussed earlier in this section, one of the unique things about this time was the middle class’s rise to economic power
By the end of the 17th century, the middle class has become a powerful group in almost every country in Western Europe. It was made up of merchants, bankers, shipowners, and investors. At this point, their power was mostly based on money. Later in the unit, we will see how they rose to power in the 19th century. In other words, the world is becoming more like Europe. When we use this term, we imply when people from Europe start living and acting like people in other countries. Europe began to spread to the Americas because of the activities of traders, missionaries, and people who tried to take over the land. When colonialism became more powerful, this process spread to Asia and Africa as well.
During this time, the monarchy get stronger, the Church went away, and the middle class grew. It marked the start of “Europeanisation,” which reached its peak with colonialism.Thus, Europe found new places for business to grow. The whole world was now Europe’s oyster.
Mercantilism Was Chosen
Eager to get more money for their royal treasuries, western European governments became interested in economic issues. To help the country grow, these governments used the following economic ideas of mercantilism:
- To be rich, you need to get as much gold and silver as possible
- Export more than you import, which means you’ll get paid for the difference in gold and silver
- Encourage domestic industries with subsidies
- Make it more difficult for foreign manufacturers to come into your country by putting tariffs on their products
- Limit the production of colonial goods
- Buy colonies to ensure there are raw materials and markets for your goods
- Colonies are there for the benefit of the country they came from
Conclusion
Herein, we have learned about the Commercial Revolution and how these events transformed mediaeval Europe to a more rapidly evolving global system. This was a critical time in European history. As the nobility began to lose influence, the rigidity of the class system began to erode. We have also learned about the impacts of the revolution of trade and commerce in Europe during that period, the evolution of the banking sector, and the adoption of mercantilism.
