GLBL ST 1 Lecture Notes - Lecture 6: Spanish Navy, Merchant Capitalism, Triangular Trade
Week 3 Lecture 2: Europe and Merchant Capitalism (1500-1700)
● European countries/states really started to spread out to rest of the world trying to create empires (for
redistribution)
○ At the same time: increased emphasis on market exchange=principle for organizing economic
transactions
○ Trade in the 1400s
■ Other parts of the world (once periphery) took up the challlenge to establish their own economy
● Colonialism and market exchange
■ Feudalism in the central belt of europe → development of merchant capitalism
● Driven by rebirth of trade that had collapsed under feudalism
● Merchant competition (characteristic of market exchange) rather than a monopoly
○ The shift of Economic Gravity Within Europe (1450-1700)
■ Three snapshots:
● 1450: centered in mediterranean; most dramatic transformation from feudalism, florence
at the center
○ (image): red lines show banking/loaning routes from Venice; expansive network
■ Floran (coinage currency) backed by guarantee; not governmental
enterprise; by the bankers themselves (NOT under centralized control)
● Big shift from redistributive system
○ Medici family; bankers and politcal rulers
■ IMPORTANT Shift in priority from Feudalism to Merchant Capitalism:
Politics for wealth, controlling transactions and profitiing from trade and
lending RATHER THAN territorial conquest and creating larger
territories for themselves
○
● 1530
○ Spanish and Portuguese conquistadores exploring; find silver mines and other
precious metals; shipping them back to Europe and compeletely transforming
prior system
○ Shift of center of gratvity (banker system) towards CENTRAL EUROPE
(Augsburg, not spain nor portugal surprisingly
■ Territories of Hapsburg dynasty, center at the Holy Roman Empire under
Charles V
■ Trying to use resources to build empire based on redistribution rather
than market exchange
● More focus on territorial control rather than transactional control
● Using control over vast amounts of bullion as basis for
establishing political/territorial dominiance around Europe
● Build up Spanish Navy;
○ 1588: Spanish Armada sailed from Spain in attempt to
conquer/impress England and didn’t go well (fiasco!)
■ Not entirely successful, faced w/ revolts, other (political) conflicts
● Rebellion of the Dutch, other conflicts
● “privateering”=entrepreneurial pirates, sometiems licensed by
English government (Elizabeth I) to loot Spanish ships from the
colonies (trade diversion)
○ By the end of century, shifted to Northern Europe
● 1600s-1700s
○ Northern Europe Triangular Trade
■ Combination of redistribution and market exchange
■ Habsburg has failed, Europe remains poltiically fragmented,
credit/banking shifts towards Northern Europe because they are able to
capture new trade flows not only in Europe but beyond the shores
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Week 3 lecture 2: europe and merchant capitalism (1500-1700) European countries/states really started to spread out to rest of the world trying to create empires (for redistribution) At the same time: increased emphasis on market exchange=principle for organizing economic transactions. Other parts of the world (once periphery) took up the challlenge to establish their own economy. Feudalism in the central belt of europe development of merchant capitalism. Driven by rebirth of trade that had collapsed under feudalism. Merchant competition (characteristic of market exchange) rather than a monopoly. The shift of economic gravity within europe (1450-1700) 1450: centered in mediterranean; most dramatic transformation from feudalism, florence at the center (image): red lines show banking/loaning routes from venice; expansive network. Floran (coinage currency) backed by guarantee; not governmental enterprise; by the bankers themselves (not under centralized control) Important shift in priority from feudalism to merchant capitalism:
