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The

Commercial Revolution

Change in the way people did business and


created wealth for others, which eventually led
to the beginnings of industrial production and
capitalism
Do you think the Commercial Revolution
had a impact on slavery?

YES

The Commercial Revolution had an


enormous impact on slavery since the
colonies needed MORE labor to support the
mother country by providing the raw
materials needed.
The Commercial Revolution marked an important step in
Europe from local economies to a global economy.
Mercantilism was the
Mercantilism belief that a nations
power depended on the
ownership of gold and
silver.

In order to acquire gold


and silver, European
countries established
overseas colonies.

Colonies provided gold,


silver and raw materials.
Mercantilists believed that a countrys wealth was
based on the amount of gold and silver it acquired.
Bullionism (gold)
Bullionism was the belief that the economic health of a
nation could be measured by the amount of precious metal,
gold, or silver, which it possessed.

Bullionism dictated a favorable balance of trade.


That is, for a nation to have gold on hand at the end of
the year, it must export more than it imports. Exports
were later defined to include money spent on freight, or
insurance, or travel.
Each nation tried to achieve economic self-sufficiency.

Those who founded new industries should be rewarded by


the state.
What was needed to maintain
mercantilism
Regulation of international trade
State intervention
Monopoly
Protection of manufacturers
Strong state government
Mercantilism, Purpose of Colonies
Fleets
Sea power was necessary to
control foreign markets.
A powerful merchant fleet would
obviate the necessity of using
the ships of another nation and
becoming dependent on foreign
assistance.
In addition, a fleet in being could
add to a nation's prestige and
military power.
Production
Thriving agriculture should be carefully
encouraged.
Domestic production not only precluded
imports of food, but farmers also provided a
base for taxation.
Colonies could provide captive markets for
manufactured goods and sources of raw
material.
A large population was needed to provide a
domestic labor force to people colonies.
Mother Countries and Colonies

Mother countries were conquerors.


The conquered land was a colony.
In addition to mining for gold and silver,
Mother countries imported natural resources
or raw materials and exported finished goods.
Mercantilism in History
Between the 15th and the 18th centuries in Europe,
powerful states were created and were dedicated to
the pursuit of economic power and wealth.
Governments organized their then-limited
capabilities to increase the wealth of the country.
Mercantilist governments promoted
exports over imports
industrialization over agriculture
the protection of domestic production against
competition from imports
the intervention in trade to promote domestic
employment
Mercantilism in History
Jean-Baptiste Colbert (1619-83) an advisor
to Louis XIV, argued that states needed to
accumulate gold and silver to guarantee
power and wealth.
Alexander Hamilton (1757-1804)
advocated policies to protect the growth
of the states manufactures.
Friedrich List (1789-1846) advocated
strong government intervention for
economic development and government
aid to technology, education and, like
Hamilton, to industry.
Mercantilist Perspective
Views of human Humans are aggressive and
have conflictual tendencies
nature Goal is to increase state
Relationship power, achieved by
between regulating economic life;
economics is subordinate to
individuals, state interests.
society, state and International economy is
market conflictual;
Relationship insecurity of anarchy breeds
competition;
between
each state defends itself.
domestic and
international
society
Capitalism
Merchants and bankers
laid the foundations for
capitalism.
In a capitalist system,
business owners risk their
capital (money) to start new
businesses hoping to make
profits.
Individuals formed
joint-stock companies.
The Rise of Capitalism

Individuals and corporations invest money


- using their capital, not labor, to make
more money
Production, distribution, and exchange of
goods are controlled by private individuals
or corporations, not by the state
Prices are set by supply and demand in
the marketplace, not by the government
A stock certificate represents partial
ownership in a business.
Joint Stock Companies
A Joint stock company is
a privately owned
company that sells stock
or partial ownership in
the company to investors.

Investors risk their capital


or money when they
purchase stock.

If the company is
successful, the investor
receives his share of the
profits.
Triangular
trade made
some
continents
wealthy
while it
impoverished
other
continents.
European kings
Increased their
wealth and power
through conquest and
colonization
While European Kings and capitalists
increased their wealth, Native American
Indians and Africans were terribly exploited.
Effects of Commercial
Revolution
The Price Revolution (Inflation): Owing
to the sharp increase in the amount of
money available with no corresponding
increase in supply of goods demanded
Growth of Capitalism: brought about by
increased trade, which led to the
emergence of entrepreneurs and business
class devoted to the goal of making profits

E. Napp
Effects of Commercial
Revolution
Development of new business
methods: new ways of creating wealth
were developed like bookkeeping and joint
stock company
Emergence of the Putting-Out System:
merchants provide the raw materials to
workers; workers produce goods and paid
for their work; merchants sell the products

E. Napp
Reminder: Final Exams Next
Week

Good Luck