Growth of Towns and Trade

1
Growth of Towns and Trade
2
Bellwork

• From what you know about how Europe was organized
  (or not organized), what would have caused trade
  in Europe to break down?

Many Small Kingdoms Almost Constant War Shifting
Alliances No Consistent Laws
3
Where did Trade first revive?

• Italy
• Venice
• Florence
• Milan

4

• How did merchants and traders compensate for a
  lack of unified governments and laws?
• The Hanseatic league
• A trading bloc, like the European Union or NAFTA
  is today
• This was an association of cities, eventually 100
  cities participated
• All Members agreed to follow certain rules
• The Association provided protection for its
  members
• The association could also collectively punish
  anyone who harmed one of their member cities

5
The Hanseatic League
6
Market Towns and Fairs

• Think of them as the shopping malls of the middle
  ages
• Certain towns held fairs on a routine basis
• Everyone knew where they could go to sell or buy

7
Growth of Manufacturing

• Domestic System
• Took place in peoples homes

8
Growth of Banking

• Money became standardized
• Wealthy kingdoms and cities minted their own
  money
• Paying with money replaced the barter economy
• People started banks to keep the money safe and
  to lend it!
• Who might need to borrow money?
• Merchants and manufactures to buy supplies
• Kings to finance armies and wage wars

9
So, whats important here?

• The Power Structure in Europe started to shift.
• Now, it wasnt just the king and the other large
  land-owners who were important.
• Bankers, merchants, manufacturers and traders
  were now getting wealthy and powerful.
• They are known as the
• middle class
• Some members of the middle class became more
  wealthy than the nobles!

10
Growth of Capital

• What did they do with this wealth?
• They invested it!
• Capital Accumulated wealth, available for
  investing.
• Capital could now be invested in things like
• Sea Explorations
• Trading Companies (ie. Dutch East Indies Co.)
• Armies!

11
What happened next?

• The economies in Europe began to modernize.
• Wealthy individuals started taking control of the
  land, labor and capital, rather than the king.
• When individuals control land, labor and capital,
  this is called a Market Economy.

12
Exit Passjust to see if you were paying
attention!

• How did the growth of trade and manufacturing
  lead Europe to develop into a market economy?