HIS109Y1 Lecture Notes - Lecture 5: Mercantilism, Revolution Renaissance

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19 Aug 2016
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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 Eoo ast lage eough fo ois to e aluale
o Feudal lods took ois the had ad ased the ith aluale etals
o Who produced coins?
Italians made coins - i 5, the oied the Florin
Other European countries have similar names
Veetias 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 selles aket fo laou eisted fo the fist
time in millennia
o Inheritance Effect more money available for wealthy survivors of wealth families
Bankers knew that feudal leaders could ot epa loas/didt hae to ad diffeet
mechanisms had to be created to deal with this
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