Commercial Revolution

The Commercial Revolution consisted in the creation of a European economy based on trade, which began in the 11th century and lasted until it was succeeded by the Industrial Revolution in the mid-18th century. Beginning with the Crusades, Europeans rediscovered spices, silks, and other commodities rare in Europe. This development created a new desire for trade, and trade expanded in the second half of the Middle Ages. Newly forming European states, through voyages of discovery, were looking for alternative trade routes in the 15th and 16th centuries, which allowed the European powers to build vast, new international trade networks. Nations also sought new sources of wealth and practiced mercantilism and colonialism. The Commercial Revolution is marked by an increase in general commerce, and in the growth of financial services such as banking, insurance, and investing. The Commercial Revolution consisted in the creation of a European economy based on trade, which began in the 11th century and lasted until it was succeeded by the Industrial Revolution in the mid-18th century. Beginning with the Crusades, Europeans rediscovered spices, silks, and other commodities rare in Europe. This development created a new desire for trade, and trade expanded in the second half of the Middle Ages. Newly forming European states, through voyages of discovery, were looking for alternative trade routes in the 15th and 16th centuries, which allowed the European powers to build vast, new international trade networks. Nations also sought new sources of wealth and practiced mercantilism and colonialism. The Commercial Revolution is marked by an increase in general commerce, and in the growth of financial services such as banking, insurance, and investing. The term itself was used by Karl Polanyi in his The Great Transformation: 'Politically, the centralized state was a new creation called forth by the Commercial Revolution...'. Later the economic historian Roberto Sabatino Lopez, used it to shift focus away from the English Industrial Revolution. In his best-known book, The Commercial Revolution of the Middle Ages (1971, with numerous reprints), Lopez argued that the key contribution of the medieval period to European history was the creation of a commercial economy between the 11th and the 14th century, centered at first in the Italo-Byzantine eastern Mediterranean, but eventually extending to the Italian city-states and over the rest of Europe. This kind of economy ran from approximately the 14th century through the 18th century. Walt Whitman Rostow placed the beginning 'arbitrarily' in 1488, the year the first European sailed around the Cape of Good Hope. Most historians, including scholars such as Robert S. Lopez, Angeliki Laiou, Irving W. Raymond, and Peter Spufford indicate that there was a commercial revolution of the 11th-13th centuries, or that it began at this point, rather than later. Italy first felt huge economic changes in Europe from the 11th to the 13th centuries. Typically there was: In recent writing on the city states, American scholar Rodney Stark emphasizes that they married responsive government, Christianity and the birth of capitalism. He argues that Italy consisted of mostly independent towns, who prospered through commerce based on early capitalist principles and kept both direct Church control and imperial power at arm's length. Cambridge University historian and political philosopher Quentin Skinner has pointed out how Otto of Freising, a German bishop who visited central Italy during the 12th century, commented that Italian towns had appeared to have exited from feudalism, so that their society was based on merchants and commerce. Even northern cities and states were also notable for their merchant republics, especially the Republic of Venice. Compared to absolutist monarchies or other more centrally controlled states, the Italian communes and commercial republics enjoyed relative political freedom conducive to academic and artistic advancement. Geographically, and because of trade, Italian cities such as Venice became international trading and banking hubs and intellectual crossroads. Harvard historian Niall Ferguson points out that Florence and Venice, as well as several other Italian city-states, played a crucial innovative role in world financial developments, devising the main instruments and practices of banking and the emergence of new forms of social and economic organization. It is estimated that the per capita income of northern Italy nearly tripled from the 11th century to the 15th century. This was a highly mobile, demographically expanding society, fueled by the rapidly expanding Renaissance commerce. In the 14th century, just as the Italian Renaissance was beginning, Italy was the economic capital of Western Europe: the Italian States were the top manufacturers of finished woolen products. However, with the Bubonic Plague in 1348, the birth of the English woolen industry and general warfare, Italy temporarily lost its economic advantage. However, by the late 15th century Italy was again in control of trade along the Mediterranean Sea. It found a new niche in luxury items like ceramics, glassware, lace and silk as well as experiencing a temporary rebirth in the woolen industry. During the 11th century in northern Italy a new political and social structure emerged: the city-state or commune. The civic culture which arose from this urbs was remarkable. In some places where communes arose (e.g. Britain and France), they were absorbed by the monarchical state as it emerged. They survived in northern and central Italy as in a handful of other regions throughout Europe to become independent and powerful city-states. In Italy the breakaway from their feudal overlords occurred in the late 12th century and 13th century, during the Investiture Controversy between the Pope and the Holy Roman Emperor: Milan led the Lombard cities against the Holy Roman Emperors and defeated them, gaining independence (battles of Legnano, 1176, and Parma, 1248; see Lombard League).