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Mercantile Economy.docx

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University of Toronto St. George
Anthony Cantor

Mercantile Economy Bardi Peruzzi Medici Fugger florin ducat Habsburg Crusades (lasted for hundreds of years, on and off): an important cause of money economy  Constituted moving of tens of thousands of Euro. knights & their entourages across Mediterranean to fight a war in what is now Palestine, Syria & Israel (required enormous resources: had to pay people to support them, build boats, eat, etc.)  couldn’t have barter system under these conditions (needed something everyone across continents would accept)  trading lines (continuous connection between civilizations) had to be established so knights could be presented w/ necessary, available equipment, horses, food, replacement knights, etc.  Europe was in contact w/ more sophisticated, money economies (ex. Byzantine Empire)  people wanted to adapt what they saw in foreign societies in their own, so a common medium of exchange was required  new instruments were required to change political, social & economic structure Things that began in order to make sure Crusaders were properly serviced:  New system of keeping track of money (double-entry system was invented): revolutionary, allowed people to save more & concentrate more $ in one place  New forms of business organization & rules (where did $ come from?)  In Middle Ages: individuals attracted as much money as they could from relatives & people close to them in order to keep money with them for trade during travel, which was insecure & inefficient (didn’t work in Crusades”commendo?” developed: allowed for entrepreneurial undertakings)  Merchants knew they could be rich by travelling to buy spices in Constantinople & back to Europe to sell them again, so they needed investors for pooling of capital, as well as others w/ less money did the travelling to get the spices (young merchants travelled the world, became more sophisticated & eventually became the investors)  everybody got a share of profit (broke old mold of family being the only ones you could trust)  merchants could see profits grow while being able to stay in their home cities & get richer & richer (in position to govern their cities: had skills, numeracy, literacy & economic experience)  advantageous: a social revolution resulted, cities became concentrations of wealth & economic activity & focuses for economic & social elite & the basis for a new political model (then-modern merchants despised old ways of feudalism b/c they stood in the way of trade)  tension that will drive historical change: people of new principles fighting against those of traditional principles  those of new principles saw cities & towns almost as laboratories to see new social change (tension: nobles saw merchants as peasants b/c they didn’t fight on horsebacks, nobles didn’t like being in debt to merchants)  nobles also saw towns & cities as places where they could take whatever they wanted (feudal law: royal nobility was responsible for those towns & cities) people learned of the concept of sovereignty through Roman (& Justinian) Law, cities fell under imperial jurisdiction: kings were supposedly descendants of Roman rulers, saw that they had right to stand up against feudal law  expansion of long-distance trade was extension of power of the group that feudal society never recognized: Merchants didn’t really fit in the structural division of society *How should the wealth of the community be distributed among the diff. levels of society?  capital attracts capital: merchants had a lot of $, but didn’t always need all of it (between major Crusading ventures)  excess capital led to creation of banks so merchants realized they could build capital by borrowing from others (always ch
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