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{{Revolution sidebar}}
{{Capitalism sidebar}}
In [[European history]], the '''
==Origins of the
The term itself was used by Karl Polanyi in his ''The Great Transformation: "''Politically, the centralized state was a new creation called forth by the Commercial Revolution...".<ref>{{Cite book|last=Polanyi|first=Karl|author-link=Karl Polanyi|year=2001|orig-year=1944|title=The Great Transformation: The Political and Economic Origins of Our Time|url=https://archive.org/details/greattransformat00karl/|location=Boston|publisher=Beacon Press|page=[https://archive.org/details/greattransformat00karl/page/69 69]|isbn=978-0-8070-5643-1}}</ref> Later the economic historian [[Roberto Sabatino Lopez]],<ref>{{cite book |author=Robert Lopez |title=The Commercial Revolution of the Middle Ages |url=https://archive.org/details/commercialrevolu00lope_006 |url-access=limited |publisher=Cambridge University Press |location=[New York] |year=1976 |pages=[https://archive.org/details/commercialrevolu00lope_006/page/n67 56]–147 }}</ref> used it to shift focus away from the English [[Industrial Revolution]].<ref>{{cite book |author=Ejvind Damsgaard Hansen |title=European Economic History |publisher=Copenhagen Business School Press |location=[Copenhagen] |year=2001 |page=47 |isbn=87-630-0017-2 }}</ref> In his best-known book, ''The Commercial Revolution of the Middle Ages'' (1971, with numerous reprints), Lopez argued that the key contribution of the medieval period to [[European history]] was the creation of a commercial economy between the 11th and the 14th century, centered at first in the Italo-Byzantine eastern [[Mediterranean]], but eventually extending to the [[Italian city-states]] and over the rest of Europe. This kind of economy ran from approximately the 14th century through the 18th century.<ref name="the_basics_of_economics">{{Cite book | last1 = O'Connor | first1 = David Kevin | title = The basics of economics | url = https://archive.org/details/basicseconomics00ocon | url-access = limited | year = 2004 | publisher = Greenwood Press | location = Westport, Conn. | isbn = 978-0-313-32520-5|page = [https://archive.org/details/basicseconomics00ocon/page/n78 48] }}</ref> [[Walt Whitman Rostow]] placed the beginning "arbitrarily" in 1488, the year the first European sailed around the [[Cape of Good Hope]].<ref name="how_it_all_began_a04-107">{{Cite book | last= Rostow | first= Walt Whitman | title= How it all began : origins of the modern economy | year = 1975 | publisher = Methuen | location = London | isbn = 978-0-416-55930-9 | page = 107 }}</ref> Most historians, including scholars such as [[Robert S. Lopez|Robert Sabatino Lopez]], [[Angeliki Laiou]], Irving W. Raymond, and [[Peter Spufford]] indicate that there was a commercial revolution of the 11th through 13th centuries, or that it began at this point, rather than later.<ref name="money_and_its_use_in_medieval_europe_a01">{{Cite book | last1 = Spufford | first1 = Peter | title = Money and its Use in Medieval Europe | url = https://archive.org/details/moneyitsusemedie00spuf_680 | url-access = limited | year =1988 | publisher = Cambridge University Press | location =Cambridge | isbn = 978-0-521-37590-0 | page = [https://archive.org/details/moneyitsusemedie00spuf_680/page/n253 240] }}</ref><ref name="Medieval_Trade_in_the_Mediterranean_World">{{Cite book | last1 = Lopez | first1 = Robert | title = Medieval Trade in the Mediterranean World | year =1955 | publisher = Columbia University Press | location = New York | isbn = 978-0-231-12356-3 | pages = 9, 50, 69, passim }}</ref><ref>{{cite book |author=Kathryn Reyerson |title="Commerce and Communications" in David Abulafia ed., The New Cambridge Medieval History, vol. 5 |publisher=Cambridge University Press|location=Cambridge |year=1999 |pages=50–1 }}</ref><ref>{{cite book |author=Angeliki Laiou |title="Byzantium and the Commercial Revolution" in G. Arnaldi ed., Europa medievale e mondo bizantino |publisher=Istituto Storico per il Medioevo, Studi Storici 40 |location=Rome |year=1997 |pages=239–53 }}</ref>
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[[File:Venezianische Kolonien.png|thumbnail|The [[Venetian Empire]].]]
* a rise in population―the population doubled in this period (the demographic explosion)
* an emergence of large cities (Venice, Florence and Milan had over 100,000 inhabitants by the 13th century in addition to many others such as [[Genoa]], [[Bologna]] and [[Verona]], which had over 50,000 inhabitants)
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It is estimated that the per capita income of northern Italy nearly tripled from the 11th century to the 15th century. This was a highly mobile, demographically expanding society, fueled by the rapidly expanding [[Renaissance]] commerce.
In the 14th century, just as the Italian Renaissance was beginning, Italy was the economic capital of Western
During the 11th century in northern Italy a new political and social structure emerged: the city-state or [[medieval commune|commune]]. The civic culture which arose from this ''[[urbs]]'' was remarkable. In some places where communes arose (e.g. Britain and France), they were absorbed by the monarchical state as it emerged. They survived in northern and central Italy as in a handful of other regions throughout Europe to become independent and powerful city-states. In Italy the breakaway from their feudal overlords occurred in the late 12th century and 13th century, during the [[Investiture
Similar town revolts led to the foundation of city-states throughout medieval Europe, such as in Russia ([[Novgorod Republic]], 12th century), in Flanders ([[Battle of Golden Spurs]], 14th century) in Switzerland (the towns of the [[Old Swiss Confederacy]], 14th century), in Germany (the [[Hanseatic League]], 14th–15th century), and in [[Prussia]] ([[Thirteen Years' War (1454–66)|Thirteen Years' War]], 15th century).
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By 1300, most of these republics had become princely states dominated by a [[Signore]]. The exceptions were [[Republic of Venice|Venice]], [[Florence]], [[Lucca]], and a few others, which remained republics in the face of an increasingly monarchic Europe. In many cases by 1400 the Signori were able to found a stable dynasty over their dominated city (or group of regional cities), obtaining also a nobility title of sovereignty by their formal superior, for example in 1395 [[Gian Galeazzo Visconti]] bought for 100,000 gold [[Florin (Italian coin)|florins]] the title of [[Duke of Milan]] from the emperor [[Wenceslaus, King of the Romans|Wenceslaus]].
In the fourteenth and fifteenth centuries, [[Milan]],
==Colonialism and mercantilism==
{{Further|Mercantilism}} {{Further|Age of Discovery}}
[[Image:Portuguese discoveries and explorationsV2en.png|thumb|300px|[[Portuguese discoveries]] and explorations from 1415 to 1543: first arrival places and dates; main Portuguese [[spice trade]] routes in the
Geopolitical, monetary, and technological factors drove the Age of Discovery. During this period (
===Geopolitical factors===
In 1453, the [[Ottoman Empire|Ottoman Turks]] took over [[Constantinople]], which cut off (or significantly increased the cost of) overland trade routes between Europe and the
Rivalry between the European powers produced intense competition for the creation of colonial empires, and fueled the rush to sail out of Europe.<ref>{{Cite book | last1 = Diamond | first1 = Jared M. | title = Guns, germs, and steel: the fates of human societies | url = https://archive.org/details/gunsgermssteelfa0000diam | url-access = registration | year = 1997 | publisher = W.W. Norton | location = New York | isbn = 0-393-03891-2 }}
</ref>
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Another issue was that European mines were exhausted of silver ore and gold. What ore remained was too deep to recover, as water would fill the mine, and technology was not sufficiently advanced enough to successfully remove the water to get to the ore or gold.<ref>{{cite web | url=http://www-geology.ucdavis.edu/~cowen/~GEL115/115CH7.html | title=Exploiting the Earth | access-date=2007-10-17 | author=Cowen, Richard | url-status=dead | archive-url=https://web.archive.org/web/20071009180929/http://www-geology.ucdavis.edu/~cowen/~GEL115/115CH7.html | archive-date=2007-10-09 }}</ref>
A second argument is that trade during the youth of the
===Technological factors===
[[File:OrteliusWorldMap1570.jpg|thumb|In 1570 (May 20) Gilles Coppens de Diest at [[Antwerp]] published 53 maps created by [[Abraham Ortelius]] under the title ''[[Theatrum Orbis Terrarum]]'', considered the "first modern atlas". Latin editions, besides Dutch, French and German editions appeared before the end of 1572; the atlas continued to be in demand until about 1612. This is the world map from this atlas.]]
From the 16th to 18th centuries, Europeans made remarkable maritime [[innovation]]s. These innovations enabled them to expand overseas and set up colonies, most notably during the 16th and 17th centuries. They developed new [[sail]] arrangements for ships, skeleton-based shipbuilding,<ref>{{cite book |author=Marcus Rautman |title=Daily life in the Byzantine Empire |publisher=Greenwood Press |location=Westport, Conn |year=2006 |page=150 |isbn=0-313-32437-9 }}</ref> the Western
After Isaac Newton published the ''[[Philosophiae Naturalis Principia Mathematica|Principia]]'', navigation was transformed, because sailors could predict the motion of the moon and other [[celestial object]]s using Newton's theories of motion.<ref>{{cite book | title=The Family Magazine| page=436 | year=1838 | publisher=Redfield & Lindsay}}</ref> Starting in 1670, the entire world was measured using essentially modern latitude instruments. In 1676, the British Parliament declared that navigation was the greatest scientific problem of the age and in 1714 offered a substantial [[Longitude rewards|financial prize]] for the solution to finding longitude. This spurred the development of the [[marine chronometer]], the [[lunar distance method]] and the invention of the [[octant (instrument)|octant]] after 1730.<ref>{{cite book |author=Haven, Kendall F. |title=100 Greatest Science Inventions of All Time |publisher=Libraries Unlimited |location=Littleton, Colo |year= 2006|page=69 |isbn= 1-59158-264-4 }}</ref> By the late 18th century, navigators replaced their prior instruments with octants and sextants.
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===Key Features===
The economy of the [[Roman Empire]] had been based on [[Roman currency|money]], but after the Empire's fall, money became scarce; power and wealth became strictly land based, and local [[fief]]s were (at least theoretically) self-sufficient. Because trade was dangerous and expensive, there were not many traders, and not much trade. The scarcity of money did not help;<ref name="webster">{{cite book |author=Webster, Hutton |author-link=Hutton Webster |title=Medieval and Modern History|url=https://archive.org/details/medievalandmode01websgoog |publisher=D.C. Heath & Co |year=1919 |location= Boston}}</ref> however, the European economic system had begun to change in the 14th century, partially as a result of the [[Black Death]], and the [[Crusades]].<ref name="lewis">{{cite book|author=Lewis, Archibald|title=Nomads and Crusaders: AD
Banks, stock exchanges, and insurance became ways to manage the risk involved in the renewed trade. New laws came into being.{{clarify |date=July 2016 |reason= Which laws, and in which countries?}} Travel became safer as nations developed. Economic theories{{clarify |date=July 2016 |reason= Which theories?}} began to develop in light of all of the new trading activity. The
===Inflation===
{{Further|Price revolution}}
[[File:Potosì 8 reales 1768 131206.jpg|thumb|right|[[Potosí]] (Bolivia)
[[File:doubloon.jpg|thumb|right|Spanish gold [[doubloon]] stamped as minted in 1798]]
[[Habsburg Spain|Spain]] legally amassed approximately 180 [[ton]]s of
===Banks===
{{Further|History of banking}}
[[Image:Matsys the moneylender.jpg|left|thumb|''The Moneylender and his Wife'' (1514)<br/> Oil on panel, 71 x 68 cm [[Musée du Louvre]], Paris]]
Various legal and religious developments in the late Middle Ages allowed for development of the modern banking system at the beginning of the 16th century.
Banks in the Italian Peninsula had great difficulty operating at the end of the 14th century, for lack of silver and gold coin.<ref name="isbn0-521-37590-8">{{cite book |author=Spufford, Peter |title=Money and its Use in Medieval Europe |url=https://archive.org/details/moneyitsusemedie00spuf |url-access=limited |publisher=Cambridge University Press |location=Cambridge, UK |year= 1993|page=[https://archive.org/details/moneyitsusemedie00spuf/page/n362 349] |isbn=0-521-37590-8 }}</ref> Nevertheless, by the later 16th century, enough bullion was available that many more people could keep a small amount hoarded and used as [[Capital (economics)|capital]].<ref>{{cite book | title=The Growth of English Industry and Commerce in Modern Times | url=https://archive.org/details/growthenglishin01cunngoog | author= Cunningham, William| page= [https://archive.org/details/growthenglishin01cunngoog/page/n34 14] | year=1892 | publisher = University Press}}</ref>
In response to this extra available money, northern European banking interests came along; among them was the [[Fugger]] family. The Fuggers were originally
Antwerp had one of the first money exchanges in Europe, a [[Exchange (organized market)|Bourse]], where people could change currency. After the [[Siege of Antwerp (1584-1585)]], the majority of business transactions were moved to Amsterdam. The [[Bank of Amsterdam]], following the example of a private [[Stockholm]] corporation, began issuing [[paper money]] to lessen the difficulty of trade, replacing metal (coin and bullion) in exchanges. In 1609 the ''[[Amsterdamsche Wisselbank]]'' (Amsterdam Exchange Bank) was founded which made Amsterdam the financial center of the world until the [[Industrial Revolution]]. In a notable example of crossover between stock companies and banks, the [[Bank of England]], which opened in 1694, was a joint-stock company.<ref>{{cite book |author=Keyser, Henry |title=The law relating to transactions on the stock exchange |publisher=Oxford University Press |location=Oxford [Oxfordshire] |year=1850 |page=1 }}</ref>
Banking offices were usually located near centers of trade, and in the late 17th century, the largest centers for commerce were the ports of [[Amsterdam]],
===Managing risk===
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Other ways of dealing with the risk and expense associated with all of the new trade activity include insurance and [[Joint-stock company|joint stock companies]] which were created as formal institutions. People had been informally sharing risk for hundreds of years, but the formal ways they were now sharing risk was new.<ref name="isbn0-19-829508-1">{{cite book |author=Michie, R. C. |title=The London Stock Exchange: a history |publisher=Oxford University Press |location=Oxford [Oxfordshire] |year=1999 |page=34 |isbn=0-19-829508-1 }}</ref>
Even though the ruling classes would not often directly assist in trade endeavors, and individuals were unequal to the task,<ref>{{cite book| author=Fisk, John | publisher=
====Joint stock companies and stock exchanges====
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[[Stock exchange]]s were developed as the volume of stock transactions increased. The London [[Royal Exchange (London)|Royal Exchange]] established in 1565 first developed as a securities market, though by 1801 it had become a stock exchange.<ref name="isbn0-19-829508-1"/>
Historian [[Fernand Braudel]] suggests that in [[Cairo]] in the 11th-century Muslim and Jewish merchants had already set up every form of [[trade association]] and had knowledge of every method of credit and payment, disproving the belief that these were invented later by Italians. In 12th century
"In the middle of the 13th century [[Venice|Venetian]] bankers began to trade in [[Government debt|government securities]]. In 1351 the Venetian government outlawed spreading rumors intended to lower the price of government funds."<ref name="common_sense_aint_common"/> Bankers in [[Pisa]], [[Verona]], [[Genoa]] and [[Florence]] also began trading in government securities during the 14th century. This practice was only possible, because these independent city states were not ruled by a duke but a council of influential citizens. The Dutch later started [[Joint-stock company|joint stock companies]], which let [[shareholder]]s invest in business ventures and get a share of their profits
The [[Amsterdam Stock Exchange]] (or Amsterdam Beurs) is also said to have been the first stock exchange to introduce continuous trade in the early 17th century. The Dutch "pioneered [[Short (finance)|short selling]], [[Options strategies|option trading]], debt-equity swaps, [[merchant bank]]ing, unit [[Trust law|trusts]] and other [[Speculation|speculative instruments]], much as we know them."<ref>{{cite web | last = Sayle | first = Murray | title = LRB · Murray Sayle: Japan goes Dutch | url = http://www.lrb.co.uk/v23/n07/sayl01_.html | publisher = London Review of Books XXIII.7 | date = 5 April 2001 | access-date = 25 October 2009 }}</ref>
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====Insurance companies====
[[image:Insurance Contact 2.jpg|thumb|right|A sample insurance contract. Documents such as this helped traders survive losses.]]
Insurance companies were another way to mitigate risk.
[[Lloyd's of London]] came into being in 1688 in English coffee shops that catered to sailors, traders, and others involved in trade. Lloyd's coffeehouse published a newspaper, which gave news from various parts of the world, and helped the underwriters of the insurance at the coffeehouse to determine the risk.<ref>{{cite book| title= The History of Lloyd's and of Marine Insurance in Great Britain| url= https://archive.org/details/historyoflloydso00martuoft| author= Martin, Frederick|year=1876|publisher = MacMillan and Company, London|pages=[https://archive.org/details/historyoflloydso00martuoft/page/65 65]–80}}</ref> This innovation was one of many that allowed for the categorization of risk. Another innovation was the use of ship catalogs and classifications.
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{{Further|History of Economic Thought}}
As the economy grew through the
===Trade monopolies===
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A [[triangular trade]] occurred in this period: between Africa, North and South America, and Europe; and it worked in the following way: Slaves came from Africa, and went to the Americas; raw materials came from the Americas and went to Europe; from there, finished goods came from Europe and were sold back to the Americas at a much higher price.
Due the [[Population history of indigenous peoples of the Americas#Depopulation from disease|massive die-off]] of the indigenous people, the Americas had a local deficit of labor required for the extraction of resources (such as gold and silver) and farming. Europe was also recovering from the [[Black Plague]] and its resurgences, and population growth was slowed by intermittent warfare by European nations
==Law==
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==Effects==
The
For more than 2000 years
[[Christopher Columbus]] and the [[conquistador]]s, through their travels, were indirectly responsible for the [[Population history of indigenous peoples of the Americas#Depopulation from disease|massive depopulation]] of South America. They conquered the [[Inca]], [[Aztec]], and [[Maya civilization|Maya]] peoples and incorporated their territories into the Spanish Empire. Other Europeans similarly affected the peoples of North America as well.
An equally important consequence of the
Stellenbosch, South Africa's Department of Modern Foreign Languages's Historical Background article ''South America'' says: "Yellow fever was an uninvited "guest" brought to the Americas on the slave ships from West Africa. Yellow fever is caused by a virus spread by the bite of a species of mosquito native to West Africa, the ''[[aedes aegypti]]''. This mosquito was accidentally carried across the Atlantic in water barrels on the slave ships. Yellow fever struck communities from New York to Rio de Janeiro, but ''aedes aegypti'' flourished in tropical zones. The mosquito, and with it yellow fever, spread rapidly throughout the Amazon River valley. The disease was so lethal to Europeans, who had little immunity to it, that mass settlement of the Amazon region was not possible until present times."</ref> [[Cocoa bean|Cocoa]] (chocolate),
Europe's commercial revolution also created a foundation of wealth needed for the [[
==See also==
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