Commercial revolution was a very crucial period of colonialism, European economic expansion and mercantilism. European powers had to build strong and vast networks of international trade and generate wealth. Global economy during commercial revolution was based on silver and it allowed traders to purchase a wide range of products including Chinese spices.
Commercial revolution also marked creation and loss of fortunes including gold and silver in England, Spain, Portugal and France. Commercial revolution was also marked by main themes where
- Nations were looking for lucrative trade deals for their new explorations
- They also had a desire for power through their colonial empires and
- They sought new sources of wealth, practiced new economic theories and learnt how to make the most of generated wealth.
- The economy during the commercial revolution was marked by mercantilism that existed only to the advantage of mother country.
- Bullionism was also evident during the period and it involved accumulation of metals as a symbol of power.
- Commercial revolution was also marked by capitalism and it involved more of private means of distribution and production. Capital was invested in order to generate more money.
There was also the emergence of new eco-system and it was characterized by new European banking interests, joint stock companies, insurance companies, new charter banks including the Bank of Amsterdam and the Bank of London.
Commercial revolution was also marked by the development of a new domestic system. This increased specialization of skills, supplementation of income by different families, capitalist entrepreneurship that could also operate without any restrictions imposed by urban guilds.
Commercial revolution and European discovery
Commercial revolution was also a period of European discovery. This is the time when European colonial empires in Asia and America were established. Encomienda system in Latin America and French trade in Southeast Asia was also established.
Similarly, the first conquistadores and Columbus were also established during the period. This involved destruction of American-Indian cultures as well as ecological exchange. Effects of ecological exchange and its effects were felt across Africa, America and Europe.
What were the effects of commercial revolution?
Effects of commercial revolution were felt across different parts of the globe. They included:
- Population increase that was marked with the emergence of the middle class
- Price revolution that led to inflation
- Economic depression
- Trade triangle and African slave trade was also established
- Changes in the role of nobility was evident as well as different changes in social structure especially in Western and Eastern Europe
- There was also an increase in world trade
- Shift from the old market ports of Mediterranean to Trans-Atlantic trade
- New trade restrictions were also established for example East India Co-royal monopolies
- Peasants were also forced out of their rural areas leading to urbanization and in the end, industrial revolution as well as American Revolution
- Free trade policies were established
- Portugal started to control trade between the west and the east
Commercial revolution was also the beginning of a foundation of wealth that was initially needed for industrial revolution. It was a crucial period where European powers had to sit down and come up with strategies that could help in building international trade.
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