HIS109Y1 Lecture Notes - Lecture 5: Mercantilism, Revolution Renaissance
Ibraheem Aziz Sep 28/2015
HIS109Y – L0101 Lec 05
Mercantile Economy and Towns
• Trading was common amongst even enemies
• Crusaders were trading with people in areas of the world where they fought
• A common cash currency was required to facilitate trade
• Where did money come from?
o Sovereigns produced coins – feudal lords began
o Eoo ast lage eough fo ois to e aluale
o Feudal lods took ois the had ad ased the ith aluale etals
o Who produced coins?
▪ Italians made coins - i 5, the oied the Florin
▪ Other European countries have similar names
▪ Veetias ade the ducats’ in 1284
▪ These systems were based and stable
• Allowed investment, employment, growth – led to later capitalism
• Double ledger-bookkeeping and investment/shared responsibility allowed for merchants to gain
wealth and experience
o Allowed townsmen to grow and control European economies
o Mercantile elite grew to an extent where feudal order was changed
o Economic revolution – political revolution – Renaissance and Reformation
• Crusades and long-distance trade developed mechanism called commenda – one way contract
enforceable by law that dictated roles and conditions of trades
o Several investors would put money into an enterprise
o Younger merchants would travel to trading area and engage in trade
o Other merchants would insure the enterprise
o Returns could be greater than capital investment by going on voyage
▪ Led to greater learning and understanding
• Mercantile class was sophisticated and rich as well
• Towns became places of stable coinage, standard weights and measures
• Roads and harbours/infrastructure was created due to trade and mercantilism
• Levers of economic power came under control of merchants
• Bankers were people with surplus wealth who could afford to lend it out and charge
usury/interest to people
• Ability to earn money simply by having money led to many people banking their money with
wealthy merchants
• In 1343, the Bardi and Medici banking families were defaulted by the King of England – banks
went bankrupt – European economy collapsed and trade/economic activity stalled
• Black Death in 1348 recapitalized Europe
o 50% of population died in some areas – selles aket fo laou eisted fo the fist
time in millennia
o Inheritance Effect – more money available for wealthy survivors of wealth families
• Bankers knew that feudal leaders could ot epa loas/didt hae to ad diffeet
mechanisms had to be created to deal with this
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