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Lecture 3

HIS109Y1 Lecture Notes - Lecture 3: Feudalism, Peruzzi

Course Code
Kenneth Bartlett

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Mercantile Economy and Towns
Best thing for these fighters was to put them in the army and let them kill others
before they killed you
There was also a huge luxery trade going on
The calling of the crusades had an enormous effect on Europe
To take part in the Crusades took an enormous amount of money
Even if you were fighting someone, you were still taking part in their economy
buying their products while you were there
Since these crusaders were dealing with sophisticated economies means that
they probably had money
Europeans need to get money to buy the things they needed from the East
Where did the money come from?
Feudalism began to collapse and With a rush for independent sovereignty, these
Lords began minting coins
These coins were only circulated locally
Really no one was able to build a money economy. Even the people who minted
coins didn’t know what it really meant
Many feudal rulers made quick cash by debasing their coins (copper was the
most common)
Because of the debasing, there wasn’t any means to engage in long distance
The problem of coinage must be solved before we could have liquid capital
It fell to the sophisticated Italian cities to solve the problem of Coinage which was
newly called Money of Account
This began in Florence and Venice
Since both cities engaged in long distance trade needed stable coinage (if its not
stable, you don’t know what its worth)
In 1252 Florence coined the Florin or Florintia (Latin name for coin)
1284 the Venetians coined the Ducat
This created a stable coinage in which all money could be measured
These innovations allowed for a sophisticated growth in these cities
These trade innovations were supported by changes in business practices
It allowed for enterprises to expand, encouraged greater employment, and
encouraged investment
Changes in Business Activity
In order to help financing, double-entry book-keeping was invented in Genoa
It allowed people to keep a tighter control of how much money they had, owed,
and was owed
A system of investment and a shared responsibility and a shared economic
activity allowed for poorer merchants to gain experience in wealth and wealthy
merchants to gain even more wealth, and allowed a class of townsman to gain
more experience and control the economy in Europe
This was an economic revolution that gave rise to a political revolution
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