4 - Mercantilism

ucla | GEOG 4 | 2023-10-11 09:27

Table of Contents

Feudalism to Mercantilism

  • the modern economy developed from feudalism as it emerged in post-roman Mediterranean loci
  • the main differences in merchant economy is:
    • politics - the expectation of those at the bottom on the top’s obligation to increase the quality of life for all
    • trade networks - long-distance large-scale connections between regions enable a widespread market of goods -> financial services, and commodities
    • status competition - caste systems, social hierarchy, competition
  • By the 1400s, pandemics of the 1300s and trade hubs across Eurasia and innovations in technology/agriculture-> people moved to trade hubs -> urbanization and trade powers emerged

    Geography of Europe’s transition (Feudalism to Capitalism)

  • city-state Europe (1400s-1530)
    • rise of merchant class, banking systems
    • This happened in a belt running from central and northern Italy northwards to Flanders - the center of European merchant capitalism
    • credit-exchange -> market exchange enabled by merchants -> spread of wealth and ideas
    • pressure under Spanish and Portuguese conquest -> increased learning and spread of ancient Greek and arab philosophers and texts
    • creation of new arts, architecture, paintings, etc. paid by merchants and church
  • discoveries, early colonialism, the spread of Spanish/Portuguese wealth through the military (1500-1600)
    • spanish/Portuguese leaders turn their wealth through gold and precious metals from Mexico, Peru, etc.
    • an overspending and thin spread of rule across the Iberian peninsula and central Europe ( Habsburg, now Italy, Venice, Genoa, Rome) -> threatened by emerging English, french, and Dutch republics
    • biggest failures: The Spanish Armada of 1588 - mostly due to invasion of England in bad weather, dutch revolt, and rebellion - led to sovereignty of Dutch Republic
  • mercantilism in NW Europe (England, France, Netherlands) (1550-1700)
    • balance of payments - accumulate capital with low imports, high exports -> currency control (storing gold and silver), encouraging risky foreign ventures by underwriting them publically and sanctioning by govt
    • privateering/bullion - government-sanctioned pirating to steal gold/silver bullion of Spanish, Arab, and Mughal ships in the high sea
    • state-licensed companies - East India, Dutch East India, Hudson’s bay companies -> monopolies over regions of Eurasia
    • much more government-organized mercantilism as compared to 1530 mercantilism of Italy

      Summary

  • Market Exchange in Medieval Europe
  • rise of trade overtaking feudalism
  • fragmentation of political power
  • fragmented powers challenged by redistributive impulses from colonization (Spanish, Portuguese)
  • mercantilism in NW Europe based on trading but operating alongside colonial empires
  • merchant capitalism led to increasing power in the hands of wealth and commerce over the control of land (feudalism)
  • a world economy: a world that should know no boundaries in the search for profit