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 The Commercial Revolution
I want to gain while I can.
—Jakob Fugger (1459–1525), German merchant and financier
Modern Europe emerged in the period that began around 1500 with European expansion through trade and colonization. As European society became more closely connected to the wider world, many aspects of daily life were shaped more and more by commercial and agricultural capitalism:
• Capital is wealth in the form of money that can be invested to create more wealth.
• Capitalism is an economic system that includes private ownership of the means of production, such as tools, buildings, and machines.
• In economic terms, the market is where buyers and sellers freely exchange goods and services.
In capitalism, the market, rather than the government, determines what to produce, how to produce it, and who produces it. Thus, capitalism is sometimes called a market economy.
Forms of capitalism emerged in the 15th century. At that time, entrepreneurs, individuals who assumed the risk of a business venture, generally acquired capital for their ventures as merchants. For example, the European woolen industry emerged in the 1400s. Entrepreneurs bought raw wool from many sources. Then they hired home-based workers to process it and sold the finished products throughout northern Europe. This is sometimes referred to as “cottage industry.” Other kinds of work, such as mining or shipbuilding, required workers to come to a place of employment to work.
In the 16th century, this system of producing goods was spread over a wider area, especially in rural England and the western Holy Roman Empire. Commercial capitalism, or capitalism used for large-scale trade or business, that emerged in the 16th and 17th centuries extended to more-distant international markets. At the same time, traditional economic and social structures remained important throughout Europe.
 Essential Question: Between 1450 to 1648, what European commercial and agricultural developments took place and what were the economic effects?
Topic 1.10

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