Lesson 1.8 · Unit 1 · CED topic 1.10
The Commercial Revolution and social change
Between 1450 and 1648 the economy of Europe changed, but not as fast as its politics or religion. Learning Objectives M and N ask about commercial and agricultural developments and their economic and social effects. The key idea is that money and markets grew, new elites rose, and old hierarchies persisted, so this is a lesson in both continuity and change. Most Europeans were still peasants, farming the land.
Learning objectives.
- 1M. Explain European commercial and agricultural developments and their economic effects from 1450 to 1648.
- 1N. Explain European commercial and agricultural developments and their social effects from 1450 to 1648.
Historical developments.
- 1.4.I.A. Innovations in banking and finance promoted the growth of urban financial centers and a money economy.
- 1.4.II.A. Subsistence agriculture was the rule in most areas, with three-crop field rotation in the north and two-crop rotation in the Mediterranean; in many cases, farmers paid rent and labor services for their lands.
- 1.4.II.B. The price revolution contributed to the accumulation of capital and the expansion of the market economy through the commercialization of agriculture, which benefited large landowners in western Europe.
- 1.4.III.A. Population recovered to its pre-Great Plague level in the 16th century, and continuing population pressures contributed to uneven price increases; agricultural commodities increased more sharply than wages, reducing living standards for some.
- 1.4.I.B. The growth of commerce produced a new economic elite, which related to traditional land-holding elites in different ways in Europe’s various geographic regions.
- 1.4.II.C. As western Europe moved toward a free peasantry and commercial agriculture, serfdom was codified in the east, where nobles continued to dominate economic life on large estates.
- 1.4.II.D. The attempts of landlords to increase their revenues by restricting or abolishing the traditional rights of peasants led to revolt.
- 1.4.III.B. Migrants to the cities challenged the ability of merchant elites and craft guilds to govern, and strained resources.
- 1.4.IV.C. From the late 16th century on, Europeans responded to economic and environmental challenges, such as the Little Ice Age, by delaying marriage and childbearing. This European marriage pattern restrained population growth and ultimately improved the economic condition of families.
Finance and the growth of commerce
The CED begins with the claim that innovations in banking and finance promoted the growth of urban financial centers and a money economy.
- Banks and credit. Italian merchants developed bills of exchange, deposit banking, and double-entry bookkeeping, which recorded debts and profits accurately. The Medici bank was one of the largest in the fifteenth century. In the sixteenth and seventeenth centuries financial leadership moved north to Antwerp and then Amsterdam, where the Bank of Amsterdam (1609) and a stock exchange supported trade.
- Joint-stock companies. The Dutch East India Company (1602) and the English East India Company (1600) raised capital from many investors for risky overseas ventures.
- Price revolution. From about 1500 to 1650 prices rose steadily, partly from the inflow of American silver and partly from population growth. Agricultural prices rose faster than wages, which reduced living standards for many workers while helping landowners and merchants.
Agriculture: east and west
Farming was the foundation of the economy. The CED notes that subsistence agriculture was the rule in most areas, with three-crop field rotation in the north and two-crop rotation in the Mediterranean, and that in many cases farmers paid rent and labor services for their lands.
But the paths of eastern and western Europe diverged.
- In the west, peasants moved toward a free peasantry and commercialized agriculture: farming for markets, with landlords seeking profit. In England, landlords began enclosing open fields and common land to raise sheep or crops for market, which benefited large landowners and displaced some tenants.
- In the east, nobles used their power to tie peasants to the land. Serfdom was codified in Prussia, Poland, and Russia as nobles built large estates to export grain to the booming western market.
- Revolts. When landlords tried to increase their revenues by restricting or abolishing the traditional rights of peasants, peasants sometimes rebelled, as in the German Peasants' War of 1524 to 1525.
New elites and the city
Commerce created a new economic elite of merchants and bankers, such as the Fuggers of Augsburg and Italian merchant princes. They related to traditional land-holding elites in different ways in Europe's various regions. In France, wealthy bourgeois could buy offices and become nobles of the robe; in England, the gentry and merchants intermarried; in the Dutch Republic, merchant oligarchs ruled the cities.
Cities grew as migrants moved from the countryside. The CED states that migrants to the cities challenged the ability of merchant elites and craft guilds to govern and strained resources. Overcrowding caused sanitation problems, poverty, and crime, and city governments responded with poor relief and policing.
Population and family
Population recovered to its pre-plague level in the sixteenth century. Pressure on land and food contributed to uneven price increases. From the late sixteenth century, Europeans responded to economic and environmental challenges, including the Little Ice Age, a long period of cooler temperatures, by delaying marriage and childbearing. This European marriage pattern (late marriage, many people never marrying) restrained population growth and ultimately improved the economic condition of families.
Description of: Thomas More, Utopia (1516), Book I, in which a character criticizes English landlords who turn farmland into sheep pastures. He says sheep, which are usually "so meek and tame," have become so greedy that they "eat up and swallow down the very men themselves," and he describes tenants evicted from farms and driven to beggary or theft.
Sourcing (HIPP). More was a lawyer and later royal councilor writing a literary work, so his criticism comes through a fictional speaker and a witty exaggeration. The historical situation was early enclosure in England, when wool exports were profitable. His purpose was to criticize greed and social injustice. The passage is good evidence of how educated contemporaries saw enclosure but overstates the speed and scale of the change, and it says little about landlords' reasons.
Claim. More argues that commercial agriculture harmed the poor.
Evidence. The speaker says sheep "eat up and swallow down the very men themselves" and describes evicted tenants forced into begging or theft.
Reasoning. The image of sheep devouring people is a satirical way to describe the loss of farmland and livelihood to profitable wool production, which matches the CED's point about the commercialization of agriculture benefiting large landowners. A limit is that Utopia is fiction, so More's exaggeration shows opinion, not exact numbers.
Question. Explain one way agriculture developed differently in eastern and western Europe between 1450 and 1648.
Model. In western Europe the trend was toward a free peasantry and commercial agriculture, as in England, where landlords enclosed fields for profit. In eastern Europe nobles instead consolidated large estates producing grain for export and tied peasants to the land through serfdom, which was codified. The difference was that in the west market forces reduced feudal obligations, while in the east the market strengthened them.
Learning Objectives M and N require you to connect economic change (banks, companies, prices, enclosure) to social effects (new elites, strained cities, serfdom in the east, revolts, the marriage pattern). Always say who gained and who lost. The best answers also keep continuity in mind: most people were farmers, hierarchies of class and rank endured, and the economy was slow to change. The east-west contrast is a frequent exam theme.
- Name two innovations in banking and finance in this period.
Show answer
Double-entry bookkeeping and joint-stock companies such as the Dutch East India Company, along with new banks like the Bank of Amsterdam.
- What was the price revolution, and who benefited from it?
Show answer
A long rise in prices from about 1500 to 1650; landowners and merchants who sold goods benefited while wage earners lost purchasing power.
- Explain the enclosure movement.
Show answer
Landlords in England fenced off open fields and common land to use for sheep or market crops, benefiting large landowners and displacing small tenants.
- How did serfdom differ in eastern and western Europe?
Show answer
In the west, serfdom declined as peasants became free and farming commercialized; in the east, nobles codified serfdom to run large estates producing grain for export.
- Why did migrants to cities strain urban government?
Show answer
They increased overcrowding, poverty, crime, and sanitation problems, challenging the ability of merchant elites and guilds to govern and provide resources.
- What was the European marriage pattern?
Show answer
A tendency toward later marriage and later childbearing, with many people never marrying, which restrained population growth and improved family economic conditions.