Commercial revolution

[5] Most historians, including scholars such as Robert Sabatino Lopez, Angeliki Laiou, Irving W. Raymond, and Peter Spufford indicate that there was a commercial revolution of the 11th through 13th centuries, or that it began at this point, rather than later.

Typically there was: In recent writing on the city states, American scholar Rodney Stark emphasizes that they married responsive government, Christianity and the birth of capitalism.

[10] He argues that Italy consisted of mostly independent towns, who prospered through commerce based on early capitalist principles and kept both direct Church control and imperial power at arm's length.

Cambridge University historian and political philosopher Quentin Skinner[11] has pointed out how Otto of Freising, a German bishop who visited central Italy during the 12th century, commented that Italian towns had appeared to have exited from feudalism, so that their society was based on merchants and commerce.

[12] Compared to absolutist monarchies or other more centrally controlled states, the Italian communes and commercial republics enjoyed relative political freedom conducive to academic and artistic advancement.

Harvard historian Niall Ferguson[13] points out that Florence and Venice, as well as several other Italian city-states, played a crucial innovative role in world financial developments, devising the main instruments and practices of banking and the emergence of new forms of social and economic organization.

However, with the Black Death in 1348, the birth of the English woolen industry and general warfare, Italy temporarily lost its economic advantage.

It found a new niche in luxury items like ceramics, glassware, lace and silk as well as experiencing a temporary rebirth in the woolen industry.

The Maritime Republics were one of the main products of this new civic and social culture based on commerce and exchange of knowledge with other areas of the world outside western Europe.

But many of the new city-states also housed violent factions based on family, confraternity and brotherhood, who undermined their cohesion (for instance the Guelphs and Ghibellines).

The 1454 Peace of Lodi ended their struggle for hegemony in Italy, attaining a balance of power and creating the conditions for the artistic and intellectual changes produced by the Italian Renaissance.

During this period (1450–17th century), the European economic center shifted from the Islamic Mediterranean to Western Europe (Portugal, Spain, France, the Netherlands, and to some extent England).

This shift was caused by the successful circumnavigation of Africa, which opened up sea-trade with the east: after Portugal's Vasco da Gama rounded the Cape of Good Hope and landed in Calicut, India in May 1498, a new path of eastern trade was possible, ending the monopoly of the Ottoman Turks and the Italian city-states.

[17] Because of the Reconquista, the Spanish had a warrior culture ready to conquer still more people and places, so Spain was perfectly positioned to develop their vast overseas empire.

[18] Rivalry between the European powers produced intense competition for the creation of colonial empires, and fueled the rush to sail out of Europe.

They developed new sail arrangements for ships, skeleton-based shipbuilding,[22] the Western "galea" (at the end of the 11th century), sophisticated navigational instruments, and detailed charts and maps.

In 1676, the British Parliament declared that navigation was the greatest scientific problem of the age and in 1714 offered a substantial financial prize for the solution to finding longitude.

The scarcity of money did not help;[26] however, the European economic system had begun to change in the 14th century, partially as a result of the Black Death, and the Crusades.

[30] The aristocracy made failed attempts to counteract this situation by creating short-term leases of their lands to allow periodic revaluation of rent.

The Bank of Amsterdam, following the example of a private Stockholm corporation, began issuing paper money to lessen the difficulty of trade, replacing metal (coin and bullion) in exchanges.

Individuals could participate in the lucrative East India trade by purchasing bills of credit from these banks, but the price they received for commodities was dependent on the ships returning (which often did not happen on time) and on the cargo they carried (which often was not according to plan).

Trade in this period was a risky business: war, weather, and other uncertainties often kept merchants from making a profit, and frequently an entire cargo would disappear all together.

[38] Other ways of dealing with the risk and expense associated with all of the new trade activity include insurance and joint stock companies which were created as formal institutions.

[39] Even though the ruling classes would not often directly assist in trade endeavors, and individuals were unequal to the task,[40] rulers such as Henry VIII of England established a permanent Royal Navy, with the intention of reducing piracy, and protecting English shipping.

[39] Historian Fernand Braudel suggests that in Cairo in the 11th-century Muslim and Jewish merchants had already set up every form of trade association and had knowledge of every method of credit and payment, disproving the belief that these were invented later by Italians.

The Dutch "pioneered short selling, option trading, debt-equity swaps, merchant banking, unit trusts and other speculative instruments, much as we know them.

Due the massive die-off of the indigenous people, the Americas had a local deficit of labor required for the extraction of resources (such as gold and silver) and farming.

Europe was also recovering from the Black Plague and its resurgences, and population growth was slowed by intermittent warfare by European nations among themselves and against the Ottoman Empire.

In France, for example, the Ordinance of Marine of Louis XIV was published under the auspices of Colbert in 1691, and was the first complete code of maritime and commercial law; and "when we consider the originality and extent of the design and the ability with which it is executed, we shall not hesitate to admit that it deserves to be ranked among the noblest works that legislative genius and learning have ever accomplished."

Higher caloric yields of the New World staple crops reduced the percentage of the workforce engaged in agricultural labor and accelerated urbanization.