3.3 Economic Changes & Continuities in the 17-18th centuries

Agricultural Revolution definition + effects

a massive revolution in farming at the end of the 17th century

effects: increased the food available in Europe and contributed to longer life spans among the population now

prior to the end of the 17th century period 80% of people in Europe ____?

lived and died by farming

how did the two-field and three-field system work out for the people?

they feed a lot of people but there was only enough food to survive (not an abundance)

what were set backs from progressing in farming

• every 8-10 years there was a climate crisis that caused crop failures in large portions —> many people went hungry + died

• soil exhaustion (all the nutrients in the soil eventually ran out because of how much the same soil was used to grow crops)

what happened in the 18th century in Britain and in the Dutch Republic

they began to switch methods that eventually spread to the rest of Europe because of their increased efficiency with even less people working on the farms (half of the farmers but still tripled their agricultural output)

what did the British and Dutch use to increase their agricultural output (therefore increasing their economic output)

they replaced the two field & three-field crop system with a new system that alternated crops that leached (removed) nutrients from the soil with crops that put nutrients back into the soil like potatoes and clover (especially clover because they put nitrogen back into the soil) —> they don’t have to take a break to let soil gain nutrients again —> rising agricultural output

effects of an increase in food production (because the new British and Dutch farming tactics)

food output increased —> populations also increased

new farming technology

seed drill and the mechanical hoe

how does the Columbian exchange tie into the Agricultural Revolution

one of the many things that were exchanged was food which included potatoes from the Americas to Europe —> Europeans used to think they were too good for the potato but then it became very popular among the peasants because it was very filling w/ nutrients —> changed the peasant’s lives

how is the population explosion effecting the people

many people didn’t have enough work (because fewer people were working on farms due to better farming techniques) —> this contributed to the expansion of the cottage industry

cottage industry

a way to earn money by making goods for sale in your house

why did people turn to the cottage industry

less and less people were needed for farming, therefore rural households earned money with the cottage industry

putting-out system + what it laid the foundation for

a system where merchant capitalists would provide raw material to rural workers that manufactured the materials. the rural workers, that were paid by the capitalists, would send the finished goods back to the capitalists who sold them to the market

this system laid the foundation for the industrial revolution’s factory system

effects of the cottage industry in rural areas

labor and trade was freed from traditional restrictions imposed by governments & corporate elites:

their work would compete with urban guide workers (if you were an artisan that was getting paid in the city, you had to be a guide worker which normally excluded anyone other than white non jewish males) but the new cottage industry allowed for the previously excluded people to be able to scratch out a living doing the same things

the growth of the cottage industry led to an increased demand for manufactured goods which ….

led to a push to get manufacturing out of people’s homes and into factories (mainly in England)

Wool industry

The British wool industry was leading because the Putting-out system enabled many workers to specialize in their trades.

For example: Some workers raised sheep, other processed wool, other woven fabrics, and still others dyed it.

How to wool industry affects Britain and its economy

increased wool production —> more people working + earning decent wages (with money) —> a growing money economy

Money economy

An economy that runs on money

For example: pretty much everywhere that has a money currency that’s the main form of currency/exchanging things.

the growing money economy + the growing market economy worked hand in hand to create an explosive economic shift. Why?

They led to new financial institutions and financial practices (like insurance)

Market economy

a market economy is one in which production and prices are determined strictly by competition between privately owned businesses —> Europe laid a foundation of “which is in another video”

Adam Smith

An economist who published a book, in 1776, called The Wealth of Nations in which he critiques mercantilism and argued for an ungoverned market (so it would work by supply and demand not the state’s pricing of everything)

Insurance

A monthly premium that insurance companies would recoup in entrepreneur’s losses of something catastrophic that could happen like a fire

Impact of insurance

Security and entrepreneurs, especially in England, gained confidence to invest significant amounts of money into new factories and growing inventories of goods for sale.

What do banks/venture capital represent

The evolution of financial institutions and capitalistic practice that fueled economic expansion during the Industrial Revolution.

Before vs after Banks/venture capital

Before 1750: if you were an entrepreneur and wanted to build (something like a factory), they would need to ask their family for the funds

After: the explosion of commerce due to the rise of the factory system, specialty banks arose which kept only some of the money people deposited and loaned the rest out as venture capital to be paid back with interest