The Commercial Revolution

A significant period marking the shift in economic practices and social structures.

Definition: A gradual economic transition from feudalism to industrial capitalism, representing a fundamental change in how economies functioned.

The Crusades: Expansions in trade around the Mediterranean Sea led to the rise of powerful Italian city-states as mercantile forces.
The Black Death: Resulted in mass mortality in Europe, causing a labor shortage that allowed surviving peasants to negotiate higher wages and gain more personal freedoms.

Colonialism: The establishment of new empires by the English, French, Spanish, and Portuguese in the Americas resulted in an influx of raw materials that enriched Europe.
Mercantilism: This economic theory focused on maximizing profits through exports and was pivotal in structuring capitalistic practices.
The Printing Press: Increased the accuracy and detail of record-keeping, facilitating better business practices and economic management.

The prices of goods became directly linked to supply and demand, shifting business focus solely toward profit.

End of Feudalism: The feudal system, based on land and loyalty, was supplanted by a capital-dominated structure emphasizing monetary wealth.
Urbanization: Many individuals migrated to cities for job opportunities in manufactories, although agriculture remained the primary employment for much of the global population.

Emergence of joint-stock companies allowed investors to pool resources, minimizing risk.
- Examples:
  - 1600: English East India Company
  - 1602: Dutch East India Company
  - 1664: French East India Company
Rise of manufacturing paired with private investment led to larger businesses and set the stage for the Industrial Revolution.

Increased Demand for Labor:
- Movement of serfs to towns marked a labor shift where workers were compensated for their work.
Boost in Trade:
- Expansion of cash transactions, banking, and lending facilitated more business growth.
Wealth Accumulation:
- Merchants gained wealth and power, strengthening their influence.
- Increased taxes from merchants augmented the king's power and wealth.

Definition: Capitalism is characterized as an economic and political system where private owners control trade and industry for profit, contrasting with a state-controlled mercantilist system.
- Example: The United States exemplifies a modern capitalist economy.

Noteworthy profits emerged in sectors like mining, shipbuilding, textiles, and food.
Enhanced accessibility to various services.
Transition of many individuals in Western Europe out of serfdom, though it placed a burden of increased rents and higher taxes to sustain the capital-based system.
The rise of significant and visible economic inequality contributed to numerous revolutions throughout the 1800s and 1900s.