The economy of the Roman Empire had been based on money, but after the Empire's fall, money became scarce; power and wealth became strictly land based, and local fiefs were self-sufficient. Because trade was dangerous and expensive, there were not many traders, and not much trade. The scarcity of money did not help;however, the European economic system had begun to change in the 14th century, partially as a result of the Black Plague, and the Crusades.
Banks, stock exchanges, and insurance became ways to manage the risk involved in the renewed trade. New laws came into being. Travel became safer as nations developed. Economic theories began to develop in light of all of the new trading activity. The increase in the availability of money led to the emergence of a new economic system, and new problems to go with it. The Commercial Revolution is also marked by the formalization of pre-existing, informal methods of dealing with trade and commerce.
Banks, stock exchanges, and insurance became ways to manage the risk involved in the renewed trade. New laws came into being. Travel became safer as nations developed. Economic theories began to develop in light of all of the new trading activity. The increase in the availability of money led to the emergence of a new economic system, and new problems to go with it. The Commercial Revolution is also marked by the formalization of pre-existing, informal methods of dealing with trade and commerce.
The economy of the Roman Empiehad been based on money, but after the Empire's fall, money became scarce; power and wealth became strictly land based, and local fiefs were self-sufficient. Because trade was dangerous and expensive, there were not many traders, and not much trade. The scarcity of money did not help; however, the European economic system had begun to change in the 14th century, partially as a result of the Black Plague, and the Crusades.
Banks, stock exchanges, and insurance became ways to manage the risk involved in the renewed trade. New laws came into being. Travel became safer as nations developed. Economic theories began to develop in light of all of the new trading activity. The increase in the availability of money led to the emergence of a new economic system, and new problems to go with it. The Commercial Revolution is also marked by the formalization of pre-existing, informal methods of dealing with trade and commerce.
Banks, stock exchanges, and insurance became ways to manage the risk involved in the renewed trade. New laws came into being. Travel became safer as nations developed. Economic theories began to develop in light of all of the new trading activity. The increase in the availability of money led to the emergence of a new economic system, and new problems to go with it. The Commercial Revolution is also marked by the formalization of pre-existing, informal methods of dealing with trade and commerce.
Inflation
An Eight Escudo Coin, used from 1566 - 1833
Spain legally amassed approximately 180 tons of gold and 8200 tons of silver through its endeavors in the New World, and another unknown amount through smuggling, spending this money to finance wars and the arts. The spent silver, suddenly being spread throughout a previously cash starved Europe, caused widespread inflation. The inflation was worsened by a growing population but a static production level, low employee salaries and a rising cost of living. This problem, combined with underpopulation (caused by the Black Death), affected the system of agriculture. The landholding aristocracy suffered under the inflation, since they depended on paying small, fixed wages to peasant tenants that were becoming able to demand higher wages. The aristocracy made failed attempts to counteract this situation by creating short-term leases of their lands to allow periodic revaluation of rent. The manorial system (manor system of lord and peasant tenant) eventually vanished, and the landholding aristocrats were forced to sell pieces of their land in order to maintain their style of living. Such sales attracted the rich bourgeois(from "burghers", the city-dwelling middle class), who wanted to buy land and thereby increase their social status. Former "common lands" were fenced by the landed bourgeois, a process known as "enclosure" which increased the efficiency of raising livestock (mainly sheep's wool for the textile industry). This "enclosure" forced the peasants out of rural areas and into the cities, resulting in urbanization and eventually the industrial revolution.
On the other hand, the increase in the availability of silver coin allowed for commerce to expand in numerous ways. Inflation was not all bad
An Eight Escudo Coin, used from 1566 - 1833
Spain legally amassed approximately 180 tons of gold and 8200 tons of silver through its endeavors in the New World, and another unknown amount through smuggling, spending this money to finance wars and the arts. The spent silver, suddenly being spread throughout a previously cash starved Europe, caused widespread inflation. The inflation was worsened by a growing population but a static production level, low employee salaries and a rising cost of living. This problem, combined with underpopulation (caused by the Black Death), affected the system of agriculture. The landholding aristocracy suffered under the inflation, since they depended on paying small, fixed wages to peasant tenants that were becoming able to demand higher wages.The aristocracy made failed attempts to counteract this situation by creating short-term leases of their lands to allow periodic revaluation of rent. The manorial system (manor system of lord and peasant tenant) eventually vanished, and the landholding aristocrats were forced to sell pieces of their land in order to maintain their style of living. Such sales attracted the rich bourgeois (from "burghers", the city-dwelling middle class), who wanted to buy land and thereby increase their social status. Former "common lands" were fenced by the landed bourgeois, a process known as "enclosure" which increased the efficiency of raising livestock (mainly sheep's wool for the textile industry). This "enclosure" forced the peasants out of rural areas and into the cities, resulting in urbanization and eventually the industrial revolution.
On the other hand, the increase in the availability of silver coin allowed for commerce to expand in numerous ways. Inflation was not all bad.
An Eight Escudo Coin, used from 1566 - 1833
Spain legally amassed approximately 180 tons of gold and 8200 tons of silver through its endeavors in the New World, and another unknown amount through smuggling, spending this money to finance wars and the arts. The spent silver, suddenly being spread throughout a previously cash starved Europe, caused widespread inflation. The inflation was worsened by a growing population but a static production level, low employee salaries and a rising cost of living. This problem, combined with underpopulation (caused by the Black Death), affected the system of agriculture. The landholding aristocracy suffered under the inflation, since they depended on paying small, fixed wages to peasant tenants that were becoming able to demand higher wages. The aristocracy made failed attempts to counteract this situation by creating short-term leases of their lands to allow periodic revaluation of rent. The manorial system (manor system of lord and peasant tenant) eventually vanished, and the landholding aristocrats were forced to sell pieces of their land in order to maintain their style of living. Such sales attracted the rich bourgeois(from "burghers", the city-dwelling middle class), who wanted to buy land and thereby increase their social status. Former "common lands" were fenced by the landed bourgeois, a process known as "enclosure" which increased the efficiency of raising livestock (mainly sheep's wool for the textile industry). This "enclosure" forced the peasants out of rural areas and into the cities, resulting in urbanization and eventually the industrial revolution.
On the other hand, the increase in the availability of silver coin allowed for commerce to expand in numerous ways. Inflation was not all bad
An Eight Escudo Coin, used from 1566 - 1833
Spain legally amassed approximately 180 tons of gold and 8200 tons of silver through its endeavors in the New World, and another unknown amount through smuggling, spending this money to finance wars and the arts. The spent silver, suddenly being spread throughout a previously cash starved Europe, caused widespread inflation. The inflation was worsened by a growing population but a static production level, low employee salaries and a rising cost of living. This problem, combined with underpopulation (caused by the Black Death), affected the system of agriculture. The landholding aristocracy suffered under the inflation, since they depended on paying small, fixed wages to peasant tenants that were becoming able to demand higher wages.The aristocracy made failed attempts to counteract this situation by creating short-term leases of their lands to allow periodic revaluation of rent. The manorial system (manor system of lord and peasant tenant) eventually vanished, and the landholding aristocrats were forced to sell pieces of their land in order to maintain their style of living. Such sales attracted the rich bourgeois (from "burghers", the city-dwelling middle class), who wanted to buy land and thereby increase their social status. Former "common lands" were fenced by the landed bourgeois, a process known as "enclosure" which increased the efficiency of raising livestock (mainly sheep's wool for the textile industry). This "enclosure" forced the peasants out of rural areas and into the cities, resulting in urbanization and eventually the industrial revolution.
On the other hand, the increase in the availability of silver coin allowed for commerce to expand in numerous ways. Inflation was not all bad.
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