From Feudalism to the Commercial Revolution

* Precursors to Growth

- Crusades

-> sets trade routes for spices, luxury goods

-> creates markets in Europe and need to make money to import

- Plague

-> shakes up property ownership

=> deaths without heirs opens up free capital

=> more jobs than workers, high wages

=> entrenched power gone, upstarts can experiment

- Basic industry (late 1300s early Renaissance)

-> cannons, wool, ships

=> organized as Capitalist enterprises

=> for profit, run by entrepreneurs

=> Northern Italy was home to most “industrialized” area

* Early banking 1400s

- trade and factory profits accumulated to be put to use

-> Venetian and Genoan trading families lend some

-> Milanese and Florentine families using wool and iron

trade to build fortunes

=> Medici family in Florence particularly skillful

+> bankers to the Popes

* Putting-Out model (late 1500s)

- previously guilds were the only biggish producers in Middle

Ages

-> good at small quantity, luxury items

-> controlled whole of productive process as a result of

monopoly on skill

- putting-out model starts in textiles:

-> 1) merchant buys wool

-> 2) farm out for spinning (workers put out from home)

-> 3) have thread woven by craftsmen

-> 4) have thread dyed (perhaps by others)

-> 5) collect and distribute

-> NOTE: person with capital controls whole process without

any skill

- putting-out system creates a cash economy

-> even farmers have cash

-> specialization possible since you can buy what you don’t

make

-> specialization also creates need for cash

-> subsistence replaced by interdependence