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It was the period of European economic expansion which included colonialism and mercantilism which lasted from approximately the late 13th century until the early eighteenth century.
Commercial Revolution played an important role in connecting Europe with rest of the world by the way of trade, commerce and investing. The European countries were influenced due to commercial revolution from other countries on the other hand other countries were also influenced by the Europeans.
The important aspect of commercial revolution was not only made possible by the European exploration in other countries through trading of goods.
Cause:
There were 4 key factors which were responsible for commercial revolution.
1. There was increase in the population growth of Europe from the year 100 to 1300 which eventually led to organization. Climatic changes also favored for the increased population growth as the population growth was highly unusual even led to urbanization.
This demographic increase made the economic life more sophisticated and eventually trade also increased.
2. During the middle age the opening of new ocean trade quotes began. It has an increase in the economic life of Europe after 1000 which gave rise to increase in trade and commercial exchange in Europe.
Cities with more than ten thousands of inhabitants made merchants start to travel in other countries more which was not possible before 1000. These merchants are accountable for the increase in the commercial exchange.
For the margins Italy played an important role as a broker between Europe and rest of the other countries.
The fairs which they held periodically the merchants from the other countries such as England Germany Spain gathered to buy the products from the Italian merchants which they had brought. The merchants introduced various luxury items from the East in several parts of Europe.
3. Development of Europe overseas colonies. After the urbanization to improve the economic life trade increased. Earlier countries colonized by European followed the principle of mercantilism with the objective of strengthening the European country economy.
Later on in the mid 19th century the British Empire give up on the policies of mercantilism and restricted trade, but agreed with free trade with few restrictions. This helped many overseas colonies with development and improvements. It also reined the aspects of the money system.
4. Inflation was another factor for commercial revolution. Due to the demographic growth in Europe various new factors affects as earlier small population dependent upon agriculture for the survival which led to inflation.
As the standard of living increased and the employees with low salary. There was a limit to the physical money e existence in the form of silver coinage in European monetary system which was very less.
Origin:
Origin of the term was itself coined on the middle of the 20th century by the economic historian Roberto Sabatini Lopez who shifted the focus away from the English industrial revolution.
During the period of 14th century till 19th century Europe through tremendous changes in history as which was affected economically.
It was the capitalist economy and it became a national centre for economic system because it adopted the principle of mercantilism. The expansion created desire for trade which increased in the middle ages.
Later on the European Nations were looking for new trade routes which led to new exploration. Discovery of America was increased in the trade of European nation. This was the time when European controlled overseas colonies and global market was created.
Effects:
1. In Europe the commercial revolution increased the imports and world trade. Main comedies from the new world and the far East imported by western Europe such as tobacco, tea, quinine etc.
Many essential commodities were available through the commercial exchange which helped to improve West European living standards.
2. In the 17th century insurance company was founded to reduce the risk of loss to ships goods from storm, fire and piracy, was Lloyd's of London. Large quantity of gold and silver was received from the new World mines also affected the Western Europe's economy.
3. There was a shift in the economic powers especially the Western Europe major trade route shifted from Mediterranean to the Atlantic.
While population increased in part due to the availability of additional food supply and cities also had promises of great social mobility Rich culture existence and a wider variety of lifestyle. The middle class in the Western Europe such as the merchant bankers capitalist grave in number and achieve greater power.
4. It helped in moving towards the economic system of capitalism. Many entrepreneurs engaged in business enterprises taking the risk facing the competition and making profit.
To raise the capital joint stock company sold to numerous the joint stock companies was the forerunner of present-day Corporation.
5. In the Western Europe to meet the needs of business enterprise for funds banks arose. The increased supply of currency and bangas divorced various new credit facilities like bill of exchange, cheque, banknotes.
6. The expansion of Europeans affected rest of the world as the Europeans migrated to overseas colonies for improving their personal economic condition.
Written by: Rakhi Sharma
Edited by: Gourav Chowdhury
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