Revival of Trade 14-2

The High Middle Ages

Big idea - 9.4a - Eurasian trans-regional trade networks grew across land and bodies of water. Specifically, overland trade routes grew for example as trade increased following the Crusades, trade along the Silk Road which connected China to the Middle East grew. Merchants traveled via ship from China through the Malay straight around India up through the Red Sea to get their goods to growing markets. Of course, within this time period, as ships traveled so did disease. Between 1347 - 1350, one third of the population of Europe was wiped out from the Black Death (Bubonic plague)

Section 2: The transition away from Feudalism and the Manorial System

A revolution refers to some type of change. Revolutions can be political, economic and/or social revolution. To understand a revolution, we look at life before the change and compare it to life after the change. For example before the Neolithic Revolution, man satisfied his basic need for food by hunting animals who traveled in herds and gathering berry and other edible food items as they traveled in their nomadic lifestyle. As man learned to domesticate grains and animals, he could farm in a permanent settlement and no longer had to move with their previous food source. The effect of the this change is that some permanent settlements developed into flourishing civilizations.

During feudal times, people lived on manors which were self sufficient. They grew and produced what they needed to survive and had little interaction with other areas. Once the Crusades occurred, new products were introduced to Europe and demand for products like silks, spices from far east increased. Therefore, there was an increase in trade. Trade extended from Europe across the Silk Road to China.

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The increase in trade led to economic, political and social changes. as trade increased, towns grew. You had the introduction of banking, insurance and finance industries. Craftsmen and merchants organized into guilds. A middle class in towns started to increase. New ideas were introduced into towns as travel increased. Kings and Queens no longer needs the nobles for protection as they were able to hire professional armies with their increase in wealth by collecting taxes from increased trade. Over the next few hundred years, the economic changes that took place in Western Europe following the Crusades is known as the Commercial Revolution.

The Commercial Revolution

In this section:

1. You will learn about the factors that led to the revival of trade in Europe.

2. You will discover what kinds of goods were traded, and why fairs began.

3. You will find out what important business developments resulted from the growth of trade.

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Vocabulary

Barter economy: Exchange of one good or service for another. This is common in a traditional economic setting.

Manufacturing - the process of producing a good for sale ex. - producing a shirt.

Domestic system: Method of production that takes place in the worker’s home rather than in a shop or factory

Usury: Policy of charging high interest on loans

Capital: Wealth that is earned, saved, and invested to make profits

Market economy: Economy in which land, labor, and capital are controlled by individual persons

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Focus Questions

1. How did the geographic locations of Italy, Kiev, and Flanders and the power of the Hanseatic League revive trade in Europe?

2. Why were fairs important during the Middle Ages?

3. What new business systems developed because of the revival of trade in Europe?

Section 2 Summary

In the early Middle Ages, manors grew or made everything they needed (self sufficient). Trade declined, and towns and cities shrank. After the Crusades, trade began to grow again, especially in Italy. Italy’s location between northern Europe and southwest Asia favored trade because it is between the Middle East and most of Europe.

Northern Europeans wanted Asian goods, which could be purchased in southwest Asia. Italian ships carried crusaders to Palestine and brought back trade goods. These goods then traveled overland into northern Europe.

Trade also grew in northern Europe. Kiev, in present-day Ukraine, became a trading center. Viking traders from Kiev traveled to Constantinople and collected Asian goods to bring back to Europe. Flanders was also the meeting of several trade routes. In the 1100s traders came to Flanders from England, France, Germany, and the Baltic Sea. German cities on the Baltic and North Seas also became important trading centers.

Germany’s central government was weak. Some 100 trading cities joined together to form the Hanseatic League. They set up trading posts in England, Flanders, Russia, and Scandinavia and greatly increased trade. Member cities had to follow strict rules or lose their trading rights. Rulers could also be pressured to respect traders, or the league would stop shipping to their countries. They invested in building lighthouses to protect ships carrying trade goods.

As trade grew, merchants needed places where they could exchange goods. Villages held weekly market days, but these were small. Rulers began allowing fairs for the sale of imported goods. Goods were taxed in return for protection by armed guards. At first, fairs were a simple barter economy. Goods and services were exchanged for other goods and services. Later, a fixed value was placed on goods, and local rulers issued coins. Money changers exchanged coins from different regions. Fairs were important social events.

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Clowns, jugglers, and musicians entertained. People traveled great distances and shared news and ideas. Fairs broadened their outlook on the world. The revival of trade led to three important business developments.

First, a system of manufacturing developed, called the domestic system. Production took place in the worker’s home. For example, in the woolen industry, each worker completed a different task, such as spinning, weaving, or dyeing

. The second new business system was banking. Money changers were the first bankers. Then they began lending money. Jews, who could not own land or join groups of skilled workers, often became moneylenders. The Christian church did not allow usury, or charging high interest on loans. But as more Christians became moneylenders, laws changed. Bankers also developed notes called bills of exchange. These could be carried to another city and exchanged for cash.

The third new business system was investing capital. Capital is wealth that is earned, saved, and invested to make profits. Sometimes several investors formed a partnership. Additionally joint stock companies were introduced. Each partner shared in the costs as well as the profits of the business. Manufacturing, banking, and investing were the first steps toward the creation of a market economy. In a market economy, individual persons control land, labor, and capital. Our modern capitalist system grew out of the market economy.

Answers to the focus questions:

1. How did the geographic locations of Italy, Kiev, and Flanders and the power of the Hanseatic League revive trade in Europe?

• Italy, Kiev, Flanders, and the cities of the Hanseatic League were located along major sea and overland trade routes between northern Europe and southwest Asia. The Hanseatic League, which had 100 member cities, was powerful in increasing trade. The Hanseatic league could pressure cities and even countries to cooperate or lose trade.

2. Why were fairs important during the Middle Ages?

• • Fairs were important because they promoted economic growth and developed easier ways to trade. They also became centers of social activity, allowing people to communicate with others from great distances. This communication helped broaden people's outlook on the world.

3. What new business systems developed because of the revival of trade in Europe?

• The business systems that developed because of the revival of trade in Europe were manufacturing, banking, and investing. These were the first step toward the creation of a market economy.