in European history, a fundamental change in the quantity and scope of commerce. In the later Middle Ages steady economic expansion had seen the rise of towns and the advent of private banking, a money economy, and trading organizations such as the Hanseatic League. Under the new national monarchies, most notably those of Portugal, Spain, the Netherlands, and England, markets grew wider and more secure. Commercial expansion was supported by technical improvements in seafaring, and from about 1450 explorations were made, first to Africa, then to the Asia and the New World. By the mid-16th cent. the Asia carrying trade had been wrested from the Arabs, and Eastern goods poured into Europe. From the New World came gold and silver, which in less than a century more than doubled European prices and greatly stimulated economic activity.

The focus of commerce shifted from Mediterranean to Atlantic ports, chartered companies were organized, and continued improvements in navigation and ship construction sped long voyages. As a worldwide trade evolved, the principles of mercantilism were adopted, and local trade barriers were abrogated, stimulating internal commerce. Modern credit facilities also appeared; new institutions included the state bank, the bourse, and the futures market, and the promissory note and other new media of exchange were created. Quickened commercial activity brought economic specialization, thus leading to the transformations in production associated with modern capitalism. By 1700 the stage was set for the Industrial Revolution.

See H. A. Miskimin, The Economy of Early Renaissance Europe, 1300–1460 (1969); J. Gies, Merchants and Moneymen (1972); M. M. Postan, Medieval Trade and Finance (1973); P. Spufford, Power and Profit: The Merchant in Medieval Europe (2003).

The Columbia Encyclopedia, Sixth Edition Copyright© 2004, Columbia University Press. Licensed from Lernout & Hauspie Speech Products N.V. All rights reserved.

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