3.3 Continuities and Changes to Economic Practice and Development from 1648-1815

The rise of England, Spain, and the Netherlands in the 17th century is contextualized by economic changes and commercial developments!

By 1450, the European population slowly began to recover from the Black Death, rising until the mid-17th century. The commercial and manufacturing center shifted from the Mediterranean to northwestern Europe, and England and France joined the Spanish in establishing overseas colonies, while Dutch traders explored new trade routes to the East Indies (Southeast Asia). Spain, France, and England emerged as the leading colonial empires, establishing colonies and developing worldwide trade networks.

The Dutch would also experience a Golden Age in the 17th century, yet both the Dutch United Provinces and Spain declined by the end of the century. 

Increased agricultural production and the expansion of trade drove economic changes in the 16th and 17th centuries. The Agricultural Revolution, especially in Britain, greatly increased food production and further boosted the population. This, in turn, increased the demand for food, which, again, could be met by increased production. Thus, a positive feedback loop formed. Farmers adopted a four-field rotation system, making the soil more fertile and increasing food production in comparison to the Medieval two-field crop rotation system.

Pasture land was converted to arable farming land, bringing more land into cultivation, and in the Netherlands, the Dutch reclaimed thousands of acres of land from the sea, converting it to farmland. Most agricultural progress and the manufacturing improvements that accompanied it took place in Western Europe.

In addition, new trade routes fueled the establishment of colonies that provided agricultural goods and resources. Most notably, agricultural goods from the Americas, such as potatoes and corn, greatly increased the European population and fueled a demand for more goods. 

Population growth also provided the labor and demand for small-scale manufacturing of textiles and metal goods. In the cottage industry (also known as the putting-out system), textile manufacturers utilized rural labor. Peasant families spun or wove cloth and linens at home and then sent them to manufacturers, where they were made into finished products. 

The expansion of trade and the increase in agricultural and manufactured commodities combined with population increases helped create a price revolution and a more globally interconnected economy. 🧶

Spain’s discovery of gold and silver in the Americas (most notably in Peru) created inflation and rising prices, which took a heavier toll on poorer populations and created an economic depression in the late 1600s, contributing to the decline of the Spanish Empire. 

A more global economy also caused a shift from town-and-guild-centered economies to nation-centered economic systems. It fueled the rise of merchant capitalists. Merchants and bankers, such as the Medici in Italy and the Fuggers in Germany, emerged as successful entrepreneurs who could finance new opportunities. Expanding trade networks with the Americas and Asia provided new outlets for European goods. The printing press created a market for books and print material, trade fueled shipbuilding enterprises, and larger militaries increased the need for cannons and muskets.

These changes contributed to the Commercial Revolution: changes in the trade-based economy that led to a growing middle class, an accumulation of wealth and entrepreneurship, and changes in business practices. Bills of exchange helped develop the banking industry, as bankers provided loans with interest. Joint-stock companies invested in overseas ventures, such as the Virginia Company, which established England’s first permanent colony in the Americas: Jamestown. 💸

Finally, there was an overall shift in Europe’s economic centers. The Italian city-states like Venice lost their monopoly on trade with Asia as new overseas routes were established, shifting economic centers to northwest Europe. The rise of capitalism increased investments, privatized land and businesses, and gave rise to a market economy in which the bourgeoisie (middle-class entrepreneurs) enjoyed more power and influence.