Transcript of FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Money to finance nat’l monarchies (FC.79) New...
- Slide 1
- Slide 2
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Money to
finance natl monarchies (FC.79) New business techniques to handle
larger trade volume: Joint stock companies People w/ moderate $ can
also invest More money invested & circulating rather than being
hoarded More tradeMore jobsStimulates increased production
Merchants undercut guilds w/cottage industs (FC.65) Capitalism:
Economic system using large sums of money in large scale trade,
manufacture,or agriculture & characterized by: Private
ownership of means of prod. Unlike guilds strict control Insurance
companies Safer to invest Money to finance Ital. Renaissance
(FC.76) Deposit banks & credit Safer to invest Law of supply
& demand, not guild regulations, determines prices Profit
motive (vs. Church view of profit as sin) Incentive &
innovations Large scale of manuf. Growing gap b/w workers &
owners Black Death especially hurts nobles (FC.71) Agric., popul.,
towns & trade revive by 1450 New mkts w/more people w/modest
amounts of $ Age of Explor. New mkts & sources of $ (FC.81)
Look for new markets & goods outside Europe Middle class
replenishes noble ranks by buying titles & offices from king
Surviving peasants inherit victims property & buy freedom from
serfdom Revival of kings power to safeguard peace & order
Radically alters W. Eurs polit. & social structure: Adoption of
Arabic numerals & accounting Ger. mining boom More $ in
circulation
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- The Black Death radically altered Europes political &
social structure, hurting Church & nobles with the new money
econ., while helping peasants who could buy their freedom, middle
Class who could buy noble titles and offices, & esp. kings whom
everyone looked to safeguard the public peace. -> Econ as
merchants set up cottage industs & the age of exploration
->mkts outside Eur. -> New business techs (banks, credit,
insurance, & joint stock comps), which along with a mining boom
& Arabic numerals & accounting -> Cycle of increasing
investment, trade, production, and employment. -> Capitalism an
econ. system using large sums of money in large scale trade,
manufacture, or agriculture & characterized by private
ownership of the means of prod., the law of supply & demand
determining prices, profit motive, &a growing gap b/w owners
& workers as the scale of prod. increased. -> $ to finance
the Renaissance & rising nation states.
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- Social change FC.75 THE ECONOMIC RECOVERY OF EUROPE
(c.1450-1600) Black Death especially hurts nobles (FC.71) Turmoil
of the Later Middle Ages especially hurt what classes?
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- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Black Death
especially hurts nobles (FC.71) Social change -BD & 100 Yrs
War-> Nobles milit. & econ. (inflation) decline Nobles new
jobs or positions?
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- Social change -BD & 100 Yrs War-> Nobles milit. &
econ. (inflation) decline -Some become courtiers & officers in
kings army; FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600)
Black Death especially hurts nobles (FC.71)
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- Social change -BD & 100 Yrs War-> Nobles milit. &
econ. (inflation) decline -Some become courtiers & officers in
kings army; -Some work-> lose noble status in some countries
FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Black Death
especially hurts nobles (FC.71)
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- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Black Death
especially hurts nobles (FC.71) Social change -BD & 100 Yrs
War-> Nobles milit. & econ. (inflation) decline -Some become
courtiers & officers in kings army; -Some work-> lose noble
status in some countries What did many Middle Class (MC) do?
- Slide 9
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Black Death
especially hurts nobles (FC.71) Radically alters W. Eurs polit.
& social structure: Middle class replenishes noble ranks by
buying titles & offices from king Revival of kings power to
safeguard peace & order Surviving peasants inherit victims
property & buy freedom from serfdom Social change -BD & 100
Yrs War-> Nobles milit. & econ. (inflation) decline -Some
become courtiers & officers in kings army; -Some work-> lose
noble status in some countries Why?
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- Because for some reason, they thought this looked cool
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- THE WOULD BE GENTLEMAN: HOW TO BECOME A NOBLE IN EARLY MODERN
EUROPE Qualifications for nobility were different from one country
to the next. For example, in England, it was purely through
heredity, so there was a fairly small class of nobles (known as the
peers or peerage). However, there was no specific legal status or
class known as the gentry, who have popularly been seen as the
lower nobility.
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- In France, there were three ways to become a noble:
1)inheriting the status from your father if he had permanent noble
status; 2)by a special letter from the king; or 3)buying the
status. By the 1700s, there were 4,000 offices that could be bought
and confer nobility. To buy noble status, one must buy an office
that conferred nobility. Some offices (e.g., judges in the Paris
Parlement and the hundreds of royal secretaries) immediately
conferred permanent nobility on the first generation holding that
office. Others (e.g., mayors and tax collectors) typically did not
receive permanent status until after the third generation of a
family holding that office.
- Slide 13
- Keep in mind that buying an office (and noble status) was like
buying a car or house today. It was the personal property of the
person who bought it and could be handed down to succeeding
generations. By the same token, one could sell an office, thus
depriving ones descendants of that office and noble status, unless
he sold it after attaining permanent noble status, which he could
then hand down to his heirs without the office being attached.
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- Military offices were one category of positions that commoners
could not buy. While this kept a lot of rich people with no
military talent from infecting the army with their incompetence, it
also kept out a lot of potential new talent, often to Frances
detriment in its many wars all the way down to the revolution in
1789.
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- Noble status was just the first step in social climbing among
the elite. There were four main factors determining your position
within the noble hierarchy: how long your family been noble, three
generations being a major threshold; what other families you had
married into; what offices and titles you & your family members
had achieved; and what notable actions they had performed
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- One critical step was finding a suitable marriage into a family
with power, prestige, and wealth, especially the latter, because an
aspiring noble needed a sizable dowry to climb the ladder of
success. However, you had to be careful not to set your sights too
high, because trying to win a bride from an extremely prestigious
and powerful family would likely meet with rejection and damage
your still fragile status.
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- Having children was another important decision for building a
powerful family. Having too many sons could dissipate your wealth,
but having none to succeed you would be the end of the line. Of
course, the fly in the ointment was the high rate of infant and
child mortality, probably 50% by age twenty. But child mortality
varied widely from family to family, so you never know how many, if
any, children will survive you. If you were blessed with several
healthy sons, you could limit the size of your family by finding
romance with a mistress or various peasant girls. (Unfortunately
for your wife, she doesnt have such options, since any children
born would be of suspect legitimacy.) If all your legitimate sons
die, you could have any bastard sons declared legitimate noble
heirs by a letter from the king.
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- Money is important to a noble, not as goal in itself, but as a
means to social prestige. Thus you need to make astute investments
within the legal restrictions of your class. Practicing certain
ignoble occupations, such as retail commerce or manual crafts,
would cost you your noble status. Other trades, such as medicine,
glass blowing, exploitation on mines and maritime and wholesale
commerce are tolerated. So is tilling the soil, as long as it is
your own land and not someone elses. And especially forbidden
was
- Slide 19
- .gambling on giraffe fights
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- Three types of investments are in tax farms, textiles
(wholesale) and land. Tax farms are the most lucrative, but also
disreputable, so getting involved in that might lose status in the
eyes of your peers. Textiles are also lucrative, but also riskier,
while land is the safest, but least dynamic long-term
investment.
- Slide 21
- A noble with Land also has two main options on how to manage
it. You could collect fixed monetary rents, which were stable, but
also more subject to inflation. Or you could let your peasants
sharecrop and take a percentage of their grain as rent. You could
then either sell the grain in town or store it and wait for a year
when grain production is down and then sell it for a greater
profit. One danger here, however, is that rats and spoilage will
reduce your grain stores each year.
- Slide 22
- An aspiring noble also wants to get a title, such as duke or
count. In the middle ages, these were titles held by noble families
that had fought their way up in society as members of the warrior
class and established as much power and independence from the king
as they could. However, over the centuries, the monarchy has
gradually regained control of these titles through such things as
marriage and the extinction of family lines, whereby the titles
reverted to the king by a custom known as escheat. By 1600, the
king controlled these titles and could grant them at will to those
gaining his favor. The hierarchy of titles is: 1) Duc (duke) 2)
Marquis (marquis) 3) Comte (earl) 4) Viscomte (viscount) 5) Baron
(baron)
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- Of course, a lowly first generation noble like you cant expect
to get a title on your own. Much like medieval homage, you need
help from a patron, so you should vie for the patronage of a
powerful noble who can work in higher circles of power for your
benefit and protect you from enemies who would try to subject you
to fines, confiscations, and the humiliation of scandal. Thus a
lower nobles fortunes are tied to those of his patron, and if that
patron fell from favor, so did his clients.
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- And no self-respecting noble is going to be taken seriously if
he doesnt have his own castle in the country, or what we now refer
to as a chateaux. Many or most castles fell into disrepair, but a
number of them, in particular along the Loire River close to Paris,
were renovated as country estates. Except now they were built more
for comfort, and less for defensive purposes. Below: Chateau De La
Hulpe (left) and Beloeil castle, both in Belgium.
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- Modave Chateaux Jehaye Chateaux
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- Chambord Chateaux
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- Chateau de Blois, an example of what happened to the luckier
medieval castles during the Renaissance
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- Another French chateau. Notice the simulated giants in the
upper left. The last real giant was executed during the Reign of
Terror in 1794 for trying to sell magic beans to a peasant woman.
Contrary to popular belief, giants rarely attained a height of more
than 10 meters. Those who did were considered freaks by their
fellow giants.
- Slide 29
- Social change -BD & 100 Yrs War-> Nobles milit. &
econ. (inflation) decline -Some become courtiers & officers in
kings army; -Some work-> lose noble status in some countries -MC
settle on Chateaus & waste $ like other nobles FC.75 THE
ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Black Death especially
hurts nobles (FC.71) Radically alters W. Eurs polit. & social
structure: Middle class replenishes noble ranks by buying titles
& offices from king Revival of kings power to safeguard peace
& order Surviving peasants inherit victims property & buy
freedom from serfdom
- Slide 30
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Black Death
especially hurts nobles (FC.71) Radically alters W. Eurs polit.
& social structure: Middle class replenishes noble ranks by
buying titles & offices from king Revival of kings power to
safeguard peace & order Surviving peasants inherit victims
property & buy freedom from serfdom Social change -BD & 100
Yrs War-> Nobles milit. & econ. (inflation) decline -Some
become courtiers & officers in kings army; -Some work-> lose
noble status in some countries -MC settle on Chateaus & waste $
like other nobles What eventually happens to the MC who do
this?
- Slide 31
- Social change -BD & 100 Yrs War-> Nobles milit. &
econ. (inflation) decline -Some become courtiers & officers in
kings army; -Some work-> lose noble status in some countries -MC
settle on Chateaus & waste $ like other nobles -> Constant
turnover in ranks FC.75 THE ECONOMIC RECOVERY OF EUROPE
(c.1450-1600) Black Death especially hurts nobles (FC.71) Radically
alters W. Eurs polit. & social structure: Middle class
replenishes noble ranks by buying titles & offices from king
Revival of kings power to safeguard peace & order Surviving
peasants inherit victims property & buy freedom from
serfdom
- Slide 32
- Social change -BD & 100 Yrs War-> Nobles milit. &
econ. (inflation) decline -Some become courtiers & officers in
kings army; -Some work-> lose noble status in some countries -MC
settle on Chateaus & waste $ like other nobles -> Constant
turnover in ranks - Old nobility called nobles of the sword FC.75
THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Black Death
especially hurts nobles (FC.71) Radically alters W. Eurs polit.
& social structure: Middle class replenishes noble ranks by
buying titles & offices from king Revival of kings power to
safeguard peace & order Surviving peasants inherit victims
property & buy freedom from serfdom
- Slide 33
- Social change -BD & 100 Yrs War-> Nobles milit. &
econ. (inflation) decline -Some become courtiers & officers in
kings army; -Some work-> lose noble status in some countries -MC
settle on Chateaus & waste $ like other nobles -> Constant
turnover in ranks -Old nobility called nobles of the sword -Newer
nobles called Nobility of the robe FC.75 THE ECONOMIC RECOVERY OF
EUROPE (c.1450-1600) Black Death especially hurts nobles (FC.71)
Radically alters W. Eurs polit. & social structure: Middle
class replenishes noble ranks by buying titles & offices from
king Revival of kings power to safeguard peace & order
Surviving peasants inherit victims property & buy freedom from
serfdom
- Slide 34
- Now the new nobles (of the robe) could go hunting, trampling
over peasants crops and children just like the older established
nobles of the sword got to do.
- Slide 35
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Black Death
especially hurts nobles (FC.71) Radically alters W. Eurs polit.
& social structure: Middle class replenishes noble ranks by
buying titles & offices from king Revival of kings power to
safeguard peace & order Surviving peasants inherit victims
property & buy freedom from serfdom Social change -BD & 100
Yrs War-> Nobles milit. & econ. (inflation) decline -Some
become courtiers & officers in kings army; -Some work-> lose
noble status in some countries -MC settle on Chateaus & waste $
like other nobles -> Constant turnover in ranks -Newer nobles
called Nobility of the robe -Old nobility called nobles of the
sword Big winners politically?
- Slide 36
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Black Death
especially hurts nobles (FC.71) Radically alters W. Eurs polit.
& social structure: Middle class replenishes noble ranks by
buying titles & offices from king Revival of kings power to
safeguard peace & order Surviving peasants inherit victims
property & buy freedom from serfdom Social change -BD & 100
Yrs War-> Nobles milit. & econ. (inflation) decline -Some
become courtiers & officers in kings army; -Some work-> lose
noble status in some countries -MC settle on Chateaus & waste $
like other nobles -> Constant turnover in ranks -Newer nobles
called Nobility of the robe -Old nobility called nobles of the
sword What gave kings an edge over nobles?
- Slide 37
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Black Death
especially hurts nobles (FC.71) Radically alters W. Eurs polit.
& social structure: Middle class replenishes noble ranks by
buying titles & offices from king Revival of kings power to
safeguard peace & order Surviving peasants inherit victims
property & buy freedom from serfdom Social change -BD & 100
Yrs War-> Nobles milit. & econ. (inflation) decline -Some
become courtiers & officers in kings army; -Some work-> lose
noble status in some countries -MC settle on Chateaus & waste $
like other nobles -> Constant turnover in ranks -Newer nobles
called Nobility of the robe -Old nobility called nobles of the
sword -Only kings (w/MC help) can buy armies (esp. Guns) &
burs
- Slide 38
- Fairy tales, or more properly folk tales, give us one of the
few insights into how common people felt about medieval society.
Take, for instance, the villains, who typically are evil ministers
or women, often with diabolical magical powers that allow them to
control events. Since the kings ministers and advisors typically
came from the noble classes, their portrayal as evil largely
reflects the commoners views of nobles as the enemy and source of
their troubles.
- Slide 39
- Women also feature prominently among villains, because of the
belief that it was an inversion of the natural order for women to
be in power. Therefore, such women must be evil. This also means
that real women in power, such as Marie de Medici and Marie
Antoinette of France, were typically seen as evil and scheming
(maybe even witches) and had a hard time getting fair treatment
from historians of the time (almost all of them men). Only recently
have historians been reassessing these womens lives & giving
them more balanced treatment ..sometimes.
- Slide 40
- By contrast, kings are seen as good, because they were the
natural allies and protectors of peasants and townsmen against
their common enemy: the nobles. Therefore, if things are going
badly in the kingdom, its not because the kings are bad, but
because they are under the influence (or spell) of evil ministers
or queens. Once the spell is broken, the king or his son the prince
(AKA Prince Charming, right) can again rule and bring the kingdom
prosperity.
- Slide 41
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Black Death
especially hurts nobles (FC.71) Radically alters W. Eurs polit.
& social structure: Middle class replenishes noble ranks by
buying titles & offices from king Revival of kings power to
safeguard peace & order Surviving peasants inherit victims
property & buy freedom from serfdom Social change -BD & 100
Yrs War-> Nobles milit. & econ. (inflation) decline -Some
become courtiers & officers in kings army; -Some work-> lose
noble status in some countries -MC settle on Chateaus & waste $
like other nobles -> Constant turnover in ranks -Newer nobles
called Nobility of the robe -Old nobility called nobles of the
sword -Only kings (w/MC help) can buy armies (esp. Guns) & burs
Surviving peasants inherit victims property & do what with
it?
- Slide 42
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Black Death
especially hurts nobles (FC.71) Radically alters W. Eurs polit.
& social structure: Middle class replenishes noble ranks by
buying titles & offices from king Revival of kings power to
safeguard peace & order Surviving peasants inherit victims
property & buy freedom from serfdom Social change -BD & 100
Yrs War-> Nobles milit. & econ. (inflation) decline -Some
become courtiers & officers in kings army; -Some work-> lose
noble status in some countries -MC settle on Chateaus & waste $
like other nobles -> Constant turnover in ranks -Newer nobles
called Nobility of the robe -Old nobility called nobles of the
sword -Only kings (w/MC help) can buy armies (esp. Guns) & burs
- Free peasants Impact on productivity & why?
- Slide 43
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Black Death
especially hurts nobles (FC.71) Radically alters W. Eurs polit.
& social structure: Middle class replenishes noble ranks by
buying titles & offices from king Revival of kings power to
safeguard peace & order Surviving peasants inherit victims
property & buy freedom from serfdom Social change -BD & 100
Yrs War-> Nobles milit. & econ. (inflation) decline -Some
become courtiers & officers in kings army; -Some work-> lose
noble status in some countries -MC settle on Chateaus & waste $
like other nobles -> Constant turnover in ranks -Newer nobles
called Nobility of the robe -Old nobility called nobles of the
sword -Only kings (w/MC help) can buy armies (esp. Guns) & burs
- Free peasants -> Incentive to work -> Productivity rises
Impact on towns & trade?
- Slide 44
- Social change -BD & 100 Yrs War-> Nobles milit. &
econ. (inflation) decline -Some become courtiers & officers in
kings army; -Some work-> lose noble status in some countries -MC
settle on Chateaus & waste $ like other nobles -> Constant
turnover in ranks -Newer nobles called Nobility of the robe -Old
nobility called nobles of the sword -Only kings (w/MC help) can buy
armies (esp. Guns) & burs - Free peasants -> Incentive to
work -> Productivity rises FC.75 THE ECONOMIC RECOVERY OF EUROPE
(c.1450-1600) Black Death especially hurts nobles (FC.71) Radically
alters W. Eurs polit. & social structure: Middle class
replenishes noble ranks by buying titles & offices from king
Revival of kings power to safeguard peace & order Surviving
peasants inherit victims property & buy freedom from serfdom
Agric., popul., towns & trade revive by 1450
- Slide 45
- The Venetian ducat (above), which maintained a purity of 99.9%
for 500 years, and the Florentine florin (below) especially
symbolized the increasingly money based economy
- Slide 46
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Black Death
especially hurts nobles (FC.71) Radically alters W. Eurs polit.
& social structure: Middle class replenishes noble ranks by
buying titles & offices from king Revival of kings power to
safeguard peace & order Surviving peasants inherit victims
property & buy freedom from serfdom Agric., popul., towns &
trade revive by 1450 Social change -BD & 100 Yrs War->
Nobles milit. & econ. (inflation) decline -Some become
courtiers & officers in kings army; -Some work-> lose noble
status in some countries -MC settle on Chateaus & waste $ like
other nobles -> Constant turnover in ranks -Newer nobles called
Nobility of the robe -Old nobility called nobles of the sword -Only
kings (w/MC help) can buy armies (esp. Guns) & burs - Free
peasants -> Incentive to work -> Productivity rises How did
the markets change?
- Slide 47
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Black Death
especially hurts nobles (FC.71) Radically alters W. Eurs polit.
& social structure: Middle class replenishes noble ranks by
buying titles & offices from king Revival of kings power to
safeguard peace & order Surviving peasants inherit victims
property & buy freedom from serfdom Agric., popul., towns &
trade revive by 1450 New mkts w/more people w/modest amounts of $
Social change -BD & 100 Yrs War-> Nobles milit. & econ.
(inflation) decline -Some become courtiers & officers in kings
army; -Some work-> lose noble status in some countries -MC
settle on Chateaus & waste $ like other nobles -> Constant
turnover in ranks -Newer nobles called Nobility of the robe -Old
nobility called nobles of the sword -Only kings (w/MC help) can buy
armies (esp. Guns) & burs - Free peasants -> Incentive to
work -> Productivity rises How did merchants deal w/guilds
restrictions?
- Slide 48
- Social change -BD & 100 Yrs War-> Nobles milit. &
econ. (inflation) decline -Some become courtiers & officers in
kings army; -Some work-> lose noble status in some countries -MC
settle on Chateaus & waste $ like other nobles -> Constant
turnover in ranks -Newer nobles called Nobility of the robe -Old
nobility called nobles of the sword -Only kings (w/MC help) can buy
armies (esp. Guns) & burs - Free peasants -> Incentive to
work -> Productivity rises FC.75 THE ECONOMIC RECOVERY OF EUROPE
(c.1450-1600) Merchants undercut guilds w/cottage industs (FC.65)
Black Death especially hurts nobles (FC.71) Radically alters W.
Eurs polit. & social structure: Middle class replenishes noble
ranks by buying titles & offices from king Revival of kings
power to safeguard peace & order Surviving peasants inherit
victims property & buy freedom from serfdom Agric., popul.,
towns & trade revive by 1450 New mkts w/more people w/modest
amounts of $
- Slide 49
- The rise of cottage industries Once upon a time, there was a
town where the local guild had total jurisdiction & the gates
to lock out any competition Peasant cottages where guild has no
jurisdiction
- Slide 50
- The rise of cottage industries Then one day a bright and
enterprising young merchant came along with some wool to weave and
sell. However, the evil guild masters locked the poor merchant out
of the town & refused to let him do business there. Keep out! $
Baa! Keep out! Stupid sheep
- Slide 51
- The rise of cottage industries But being bright and
resourceful, the merchant had an idea. $ Baa! Keep out! I dont
know, but I dont like it. Whats that coming out of his head?
- Slide 52
- The rise of cottage industries He would give peasants in their
cottages raw wool to spin and weave into cheaper quality cloth
during the off season. $ $ Peasant cottages where guild has no
jurisdiction I dont know, but I dont like it. Whats he up to? Keep
out! $ Baa! = Bag of raw unworked wool
- Slide 53
- The rise of cottage industries Since the wool was only Wal Mart
quality, he could pay the peasants Wal Mart wages (which they
couldnt count anyway) and undersell the guilds outside of town and
their jurisdiction Peasant cottages where guild has no jurisdiction
Hey, stop that! Keep out! $ $ $ $ $ $ $ $ $ Ouch! He just hit me in
my wallet.
- Slide 54
- Everyday the merchant would get richer & richer & give
the peasants even more wool to weave more profits The rise of
cottage industries Peasant cottages where guild has no jurisdiction
Keep out! $ $ $ $ $ $ $ $ $ $
- Slide 55
- The rise of cottage industries Peasant cottages where guild has
no jurisdiction Everyday the merchant would get richer & richer
& give the peasants even more wool to weave more profits $ $ $
$ $ $ $ $ $ $ $
- Slide 56
- The rise of cottage industries $ $ $ $ $ $ $ $ $ $ $ $ Everyday
the merchant would get richer & richer & give the peasants
even more wool to weave more profits
- Slide 57
- The rise of cottage industries Peasant cottages where guild has
no jurisdiction $ $ $ $$ $ $ $ $ $ $ $ $ Everyday the merchant
would get richer & richer & give the peasants even more
wool to weave more profits
- Slide 58
- The rise of cottage industries Peasant cottages where guild has
no jurisdiction $ $ $ $$ $ $ $ $ $ $ $ $ $ Everyday the merchant
would get richer & richer & give the peasants even more
wool to weave more profits
- Slide 59
- The rise of cottage industries Peasant cottages where guild has
no jurisdiction $ $ $ $$ $ $ $ $ $ $ $ $ $ $ Everyday the merchant
would get richer & richer & give the peasants even more
wool to weave more profits
- Slide 60
- The rise of cottage industries Peasant cottages where guild has
no jurisdiction - until one day. $ $ $ $$ $ $ $ $
- Slide 61
- he exploded with money! The rise of cottage industries $
Peasant cottages where guild has no jurisdiction $ $ $ $ $ $ $ $ $
$ $ $ I just got hit in the Head with a quarter! Run for your
lives! $ $ $
- Slide 62
- The rise of cottage industries Peasant cottages where guild has
no jurisdiction $ $ $ $ $ $ $ $ And they all lived happily ever
after except for the guilds. Stupid sheep! Stupid merchant! $ $$ $
Stupid guild!
- Slide 63
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) Merchants
undercut guilds w/cottage industs (FC.65) Black Death especially
hurts nobles (FC.71) Radically alters W. Eurs polit. & social
structure: Middle class replenishes noble ranks by buying titles
& offices from king Revival of kings power to safeguard peace
& order Surviving peasants inherit victims property & buy
freedom from serfdom Agric., popul., towns & trade revive by
1450 New mkts w/more people w/modest amounts of $ Social change -BD
& 100 Yrs War-> Nobles milit. & econ. (inflation)
decline -Some become courtiers & officers in kings army; -Some
work-> lose noble status in some countries -MC settle on
Chateaus & waste $ like other nobles -> Constant turnover in
ranks -Newer nobles called Nobility of the robe -Old nobility
called nobles of the sword -Only kings (w/MC help) can buy armies
(esp. Guns) & burs - Free peasants -> Incentive to work
-> Productivity rises How else did markets & resources
expand?
- Slide 64
- Social change -BD & 100 Yrs War-> Nobles milit. &
econ. (inflation) decline -Some become courtiers & officers in
kings army; -Some work-> lose noble status in some countries -MC
settle on Chateaus & waste $ like other nobles -> Constant
turnover in ranks -Newer nobles called Nobility of the robe -Old
nobility called nobles of the sword -Only kings (w/MC help) can buy
armies (esp. Guns) & burs - Free peasants -> Incentive to
work -> Productivity rises FC.75 THE ECONOMIC RECOVERY OF EUROPE
(c.1450-1600) Merchants undercut guilds w/cottage industs (FC.65)
Black Death especially hurts nobles (FC.71) Radically alters W.
Eurs polit. & social structure: Middle class replenishes noble
ranks by buying titles & offices from king Revival of kings
power to safeguard peace & order Surviving peasants inherit
victims property & buy freedom from serfdom Agric., popul.,
towns & trade revive by 1450 New mkts w/more people w/modest
amounts of $ Look for new markets & goods outside Europe
- Slide 65
- Social change -BD & 100 Yrs War-> Nobles milit. &
econ. (inflation) decline -Some become courtiers & officers in
kings army; -Some work-> lose noble status in some countries -MC
settle on Chateaus & waste $ like other nobles -> Constant
turnover in ranks -Newer nobles called Nobility of the robe -Old
nobility called nobles of the sword -Only kings (w/MC help) can buy
armies (esp. Guns) & burs - Free peasants -> Incentive to
work -> Productivity rises FC.75 THE ECONOMIC RECOVERY OF EUROPE
(c.1450-1600) Merchants undercut guilds w/cottage industs (FC.65)
Black Death especially hurts nobles (FC.71) Age of Explor. New mkts
& sources of $ (FC.81) Radically alters W. Eurs polit. &
social structure: Middle class replenishes noble ranks by buying
titles & offices from king Revival of kings power to safeguard
peace & order Surviving peasants inherit victims property &
buy freedom from serfdom Agric., popul., towns & trade revive
by 1450 New mkts w/more people w/modest amounts of $ Look for new
markets & goods outside Europe
- Slide 66
- Social change -BD & 100 Yrs War-> Nobles milit. &
econ. (inflation) decline -Some become courtiers & officers in
kings army; -Some work-> lose noble status in some countries -MC
settle on Chateaus & waste $ like other nobles -> Constant
turnover in ranks -Newer nobles called Nobility of the robe -Old
nobility called nobles of the sword -Only kings (w/MC help) can buy
armies (esp. Guns) & burs - Free peasants -> Incentive to
work -> Productivity rises FC.75 THE ECONOMIC RECOVERY OF EUROPE
(c.1450-1600) New business techniques to handle larger trade
volume: Merchants undercut guilds w/cottage industs (FC.65) Black
Death especially hurts nobles (FC.71) Age of Explor. New mkts &
sources of $ (FC.81) Radically alters W. Eurs polit. & social
structure: Middle class replenishes noble ranks by buying titles
& offices from king Revival of kings power to safeguard peace
& order Surviving peasants inherit victims property & buy
freedom from serfdom Agric., popul., towns & trade revive by
1450 New mkts w/more people w/modest amounts of $ Look for new
markets & goods outside Europe Deposit banks & credit Safer
to invest Joint stock companies People w/ moderate $ can also
invest Insurance companies Safer to invest
- Slide 67
- Social change -BD & 100 Yrs War-> Nobles milit. &
econ. (inflation) decline -Some become courtiers & officers in
kings army; -Some work-> lose noble status in some countries -MC
settle on Chateaus & waste $ like other nobles -> Constant
turnover in ranks -Newer nobles called Nobility of the robe -Old
nobility called nobles of the sword -Only kings (w/MC help) can buy
armies (esp. Guns) & burs - Free peasants -> Incentive to
work -> Productivity rises FC.75 THE ECONOMIC RECOVERY OF EUROPE
(c.1450-1600) New business techniques to handle larger trade
volume: Merchants undercut guilds w/cottage industs (FC.65) Black
Death especially hurts nobles (FC.71) Age of Explor. New mkts &
sources of $ (FC.81) Radically alters W. Eurs polit. & social
structure: Middle class replenishes noble ranks by buying titles
& offices from king Revival of kings power to safeguard peace
& order Surviving peasants inherit victims property & buy
freedom from serfdom Agric., popul., towns & trade revive by
1450 New mkts w/more people w/modest amounts of $ Look for new
markets & goods outside Europe Deposit banks & credit Safer
to invest Joint stock companies People w/ moderate $ can also
invest Insurance companies Safer to invest
- Slide 68
- Social change -BD & 100 Yrs War-> Nobles milit. &
econ. (inflation) decline -Some become courtiers & officers in
kings army; -Some work-> lose noble status in some countries -MC
settle on Chateaus & waste $ like other nobles -> Constant
turnover in ranks -Newer nobles called Nobility of the robe -Old
nobility called nobles of the sword -Only kings (w/MC help) can buy
armies (esp. Guns) & burs - Free peasants -> Incentive to
work -> Productivity rises Credit & deposit banks -Eng
clergy & Ital. Merch both need to transfer $ w/o carrying
it
- Slide 69
- Florence Rome $
- Slide 70
- France Florence Rome $
- Slide 71
- France Florence Rome $ England Sicily
- Slide 72
- France Florence Spain Portugal Rome $ England Sicily
- Slide 73
- France Florence Spain Portugal N. Africa Rome $ Sicily
England
- Slide 74
- France Florence Spain Portugal N. Africa Rome $ Sicily England
Japan
- Slide 75
- France Florence Spain Portugal N. Africa Rome $ A bunch of
stuff in between Sicily England Japan
- Slide 76
- France Florence Spain Portugal N. Africa Rome $ Japan A bunch
of stuff in between Sicily England A Florentine merchant sends his
agent to England with 5,000 florins to buy wool he plans to weave
into fine woolen fabric back at Florence. 5k$ cash
- Slide 77
- France Florence Spain Portugal N. Africa Rome Japan A bunch of
stuff in between Sicily England A Florentine merchant sends his
agent to England with 5,000 florins to buy wool he plans to weave
into fine woolen fabric back at Florence. 5k$ cash
- Slide 78
- France Florence Spain Portugal N. Africa Rome Japan A bunch of
stuff in between Sicily England $ A Florentine merchant sends his
agent to England with 5,000 florins to buy wool he plans to weave
into fine woolen fabric back at Florence. Unfortunately, on the way
there
- Slide 79
- France Florence Spain Portugal N. Africa Rome Japan A bunch of
stuff in between Sicily England $ A Florentine merchant sends his
agent to England with 5,000 florins to buy wool he plans to weave
into fine woolen fabric back at Florence. Unfortunately, on the way
there, a storm hits
- Slide 80
- France Florence Spain Portugal N. Africa Rome Japan A bunch of
stuff in between Sicily England A Florentine merchant sends his
agent to England with 5,000 florins to buy wool he plans to weave
into fine woolen fabric back at Florence. Unfortunately, on the way
there, a storm hits $ Gosh darn it $ Well, shiver me timbers* *
Whatever that means
- Slide 81
- France Florence Spain Portugal N. Africa Rome Japan A bunch of
stuff in between Sicily England A Florentine merchant sends his
agent to England with 5,000 florins to buy wool he plans to weave
into fine woolen fabric back at Florence. Unfortunately, on the way
there a storm hits & sinks his ship with all his money (not to
mention his agent).
- Slide 82
- France Florence Spain Portugal N. Africa Rome $ Church taxes
Japan A bunch of stuff in between Sicily England After the funeral
(for his money) the merchant has an idea. He knows the Church
collects taxes in England to be sent to Italy, risking the same
dangers as he does.
- Slide 83
- France Florence Spain Portugal N. Africa Rome $ Church taxes
Japan A bunch of stuff in between Sicily England So he gets a
letter of credit* from the pope for 5,000 florins and sends a new
agent with it to England. *marked in red to distinguish it from
green cash) $
- Slide 84
- France Florence Spain Portugal N. Africa Rome $ Church taxes
Japan A bunch of stuff in between Sicily England So he gets a
letter of credit from the pope for 5,000 florins and sends a new
agent with it to England. On the way, the ship is waylaid by
pirates. ARRRH! $
- Slide 85
- France Florence Spain Portugal N. Africa Rome Church taxes
Japan A bunch of stuff in between Sicily England So he gets a
letter of credit from the pope for 5,000 florins and sends a new
agent with it to England. On the way, the ship is waylaid by
pirates. ARRRH! 5k$ cash $
- Slide 86
- France Florence Spain Portugal N. Africa Rome Japan A bunch of
stuff in between Sicily England So he gets a letter of credit from
the pope for 5,000 florins and sends a new agent with it to
England. On the way, the ship is waylaid by pirates. ARRRH! Church
taxes 5k$ cash $
- Slide 87
- Too bad. This is all Ive got France Florence Spain Portugal N.
Africa Rome Japan A bunch of stuff in between Sicily England
Unfortunately (for the pirates) all they find is a worthless letter
of credit worth 5,000 florins. But, since they cant read, they let
the ship go on its way. Yes, but can you read? Well.no I said ARRRH
Church taxes 5k$ cash $
- Slide 88
- France Florence Spain Portugal N. Africa Rome Japan A bunch of
stuff in between Sicily England Unfortunately (for the pirates) all
they find is a worthless letter of credit worth 5,000 florins. But,
since they cant read, they let the ship go on its way. ARRRH!
Stupid pirates Church taxes 5k$ cash $
- Slide 89
- France Florence Spain Portugal N. Africa Rome Japan A bunch of
stuff in between Sicily England Unfortunately (for the pirates) all
they find is a worthless letter of credit worth 5,000 florins. But,
since they cant read, they let the ship go on its way. Church taxes
5k$ cash $
- Slide 90
- France Florence Spain Portugal N. Africa Rome Japan A bunch of
stuff in between Sicily England Unfortunately (for the pirates) all
they find is a worthless letter of credit worth 5,000 florins. But,
since they cant read, they let the ship go on its way. Church taxes
5k$ cash $
- Slide 91
- France Florence Spain Portugal N. Africa Rome Japan A bunch of
stuff in between Sicily England When he gets to England, the agent
gives the credit note worth 5000 florins to the archbishop in
charge of collecting church taxes. He gets 5000 florins from the
archbishop & proceeds to buy a bunch of wool. Baa! Church taxes
5k$ cash 1k$ cash 1k$ cash 1k$ cash 1k$ cash 1k$ cash Rich sheep
herders $
- Slide 92
- France Florence Spain Portugal N. Africa Rome $ Japan A bunch
of stuff in between Sicily England On the way home, the agent is
waylaid by the same pirates who dont recognize him because his ship
is turned backwards. ARRRHBaa! 5k$ credit
- Slide 93
- France Florence Spain Portugal N. Africa Rome $ Japan A bunch
of stuff in between Sicily England On the way home, the agent is
waylaid by the same pirates who dont recognize him because his ship
is turned backwards. Once again, since they cant read and they hate
the smell of wool, the pirates let the agent go. ARRRH Baa! 5k$
credit
- Slide 94
- France Florence Spain Portugal N. Africa Rome $ Japan A bunch
of stuff in between Sicily England On the way home, the agent is
waylaid by the same pirates who dont recognize him because his ship
is turned backwards. Once again, since they cant read and they hate
the smell of wool, the pirates let the agent go. Baa! 5k$
credit
- Slide 95
- France Florence Spain Portugal N. Africa Rome $ Japan A bunch
of stuff in between Sicily England On the way home, the agent is
waylaid by the same pirates who dont recognize him because his ship
is turned backwards. Once again, since they cant read and they hate
the smell of wool, the pirates let the agent go. Baa! 5k$
credit
- Slide 96
- France Florence Spain Portugal N. Africa Rome $ Japan A bunch
of stuff in between Sicily England On the way home, the agent is
waylaid by the same pirates who dont recognize him because his ship
is turned backwards. Once again, since they cant read and they hate
the smell of wool, the pirates let the agent go. Baa! Stupid sheep
5k$ credit
- Slide 97
- France Florence Spain Portugal N. Africa Rome 10k $ cash Japan
A bunch of stuff in between Sicily England So the agent returns
home safely & then has the wool woven and sold for 10,000
florins, a profit of 5,000 florins.
- Slide 98
- France Florence Spain Portugal N. Africa Rome 5k$ cash Japan A
bunch of stuff in between Sicily England So the agent returns home
safely & then has the wool woven and sold for 10,000 florins, a
profit of 5,000 florins after he sends $5,000 to his branch office
in Rome to repay the pope. Thanks $ 5k$ cash
- Slide 99
- France Florence Spain Portugal N. Africa Rome Japan A bunch of
stuff in between Sicily England With his increased credit rating,
the merchant can borrow 10,000 florins & send two ships out at
a time, thus doubling his profit to 10,000 florins after paying
back the loan. $10,000 5k$ credit 5k$ credit
- Slide 100
- France Florence Spain Portugal N. Africa Rome Japan A bunch of
stuff in between Sicily England With that increased credit rating,
the merchant can borrow 20,000 florins & send four ships out at
a time, thus doubling his profit again to 20,000 florins after
paying back the loan, etc., etc.,etc. $20,000 5k$ credit 5k$ credit
5k$ credit 5k$ credit
- Slide 101
- Lets review
- Slide 102
- -MC settle on Chateaus & waste $ like other nobles ->
Constant turnover in ranks -Newer nobles called Nobility of the
robe -Old nobility called nobles of the sword -Only kings (w/MC
help) can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash FC.75A THE BIRTH OF BANKING
- Slide 103
- -MC settle on Chateaus & waste $ like other nobles ->
Constant turnover in ranks -Newer nobles called Nobility of the
robe -Old nobility called nobles of the sword -Only kings (w/MC
help) can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash FC.75A THE BIRTH OF BANKING Storms
- Slide 104
- -MC settle on Chateaus & waste $ like other nobles ->
Constant turnover in ranks -Newer nobles called Nobility of the
robe -Old nobility called nobles of the sword -Only kings (w/MC
help) can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash FC.75A THE BIRTH OF BANKING PiratesStorms
- Slide 105
- -MC settle on Chateaus & waste $ like other nobles ->
Constant turnover in ranks -Newer nobles called Nobility of the
robe -Old nobility called nobles of the sword -Only kings (w/MC
help) can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash FC.75A THE BIRTH OF BANKING PiratesStorms Church
collects taxes all over W. Europe
- Slide 106
- -MC settle on Chateaus & waste $ like other nobles ->
Constant turnover in ranks -Newer nobles called Nobility of the
robe -Old nobility called nobles of the sword -Only kings (w/MC
help) can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash FC.75A THE BIRTH OF BANKING PiratesStorms Church
collects taxes all over W. Europe Need to send those taxes to Pope
in Italy
- Slide 107
- FC.75A THE BIRTH OF BANKING PiratesStorms Church collects taxes
all over W. Europe Need to send those taxes to Pope in Italy N.
Italian merchants trade all over W. Eur. -MC settle on Chateaus
& waste $ like other nobles -> Constant turnover in ranks
-Newer nobles called Nobility of the robe -Old nobility called
nobles of the sword -Only kings (w/MC help) can buy armies (esp.
Guns) & burs - Free peasants -> Incentive to work ->
Productivity rises Credit & deposit banks -Eng clergy &
Ital. Merch both need to transfer $ w/o carrying it -> Flor.
Merch. w/letter of credit borrows $ from church in Eng -> Ch.
Cleric carries letter of credit to Italy & cashes it -> Both
get cash in others country w/o carrying cash -> Others wanting
to transfer $ pay Fl. merch. to move it w/letters of credit to
their Fl. Merchs branch offices -> Banks -Credit -> Merch.
could send sev. agents, each w/ letter of credit worth all his cash
-> Can work w/sev. X more $ as he has cold hard cash
- Slide 108
- -MC settle on Chateaus & waste $ like other nobles ->
Constant turnover in ranks -Newer nobles called Nobility of the
robe -Old nobility called nobles of the sword -Only kings (w/MC
help) can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash FC.75A THE BIRTH OF BANKING PiratesStorms Church
collects taxes all over W. Europe Need to send those taxes to Pope
in Italy N. Italian merchants trade all over W. Eur. Need to send $
from Italy to do business
- Slide 109
- -MC settle on Chateaus & waste $ like other nobles ->
Constant turnover in ranks -Newer nobles called Nobility of the
robe -Old nobility called nobles of the sword -Only kings (w/MC
help) can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash FC.75A THE BIRTH OF BANKING PiratesStorms Church
collects taxes all over W. Europe Need to send those taxes to Pope
in Italy N. Italian merchants trade all over W. Eur. Need to send $
from Italy to do business Risky to carry cash long distances
- Slide 110
- -MC settle on Chateaus & waste $ like other nobles ->
Constant turnover in ranks -Newer nobles called Nobility of the
robe -Old nobility called nobles of the sword -Only kings (w/MC
help) can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash FC.75A THE BIRTH OF BANKING Merchants send agents to
other countries who borrow local Church taxes & use them for
their business PiratesStorms Church collects taxes all over W.
Europe Need to send those taxes to Pope in Italy N. Italian
merchants trade all over W. Eur. Need to send $ from Italy to do
business Risky to carry cash long distances
- Slide 111
- -MC settle on Chateaus & waste $ like other nobles ->
Constant turnover in ranks -Newer nobles called Nobility of the
robe -Old nobility called nobles of the sword -Only kings (w/MC
help) can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash FC.75A THE BIRTH OF BANKING Merchants send agents to
other countries who borrow local Church taxes & use them for
their business PiratesStorms Church collects taxes all over W.
Europe Need to send those taxes to Pope in Italy N. Italian
merchants trade all over W. Eur. Need to send $ from Italy to do
business Risky to carry cash long distances Send letters of credit
back to N. Italy worth the amount of Church taxes they had
borrowed
- Slide 112
- -MC settle on Chateaus & waste $ like other nobles ->
Constant turnover in ranks -Newer nobles called Nobility of the
robe -Old nobility called nobles of the sword -Only kings (w/MC
help) can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash FC.75A THE BIRTH OF BANKING Merchants send agents to
other countries who borrow local Church taxes & use them for
their business PiratesStorms Church collects taxes all over W.
Europe Need to send those taxes to Pope in Italy N. Italian
merchants trade all over W. Eur. Need to send $ from Italy to do
business Risky to carry cash long distances Send letters of credit
back to N. Italy worth the amount of Church taxes they had borrowed
Home office repays the pope in Italy the Church taxes it had
borrowed abroad without either party having to transfer cash across
Europe
- Slide 113
- -MC settle on Chateaus & waste $ like other nobles ->
Constant turnover in ranks -Newer nobles called Nobility of the
robe -Old nobility called nobles of the sword -Only kings (w/MC
help) can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash FC.75A THE BIRTH OF BANKING Merchants send agents to
other countries who borrow local Church taxes & use them for
their business PiratesStorms Church collects taxes all over W.
Europe Need to send those taxes to Pope in Italy N. Italian
merchants trade all over W. Eur. Need to send $ from Italy to do
business Risky to carry cash long distances Send letters of credit
back to N. Italy worth the amount of Church taxes they had borrowed
Home office repays the pope in Italy the Church taxes it had
borrowed abroad without either party having to transfer cash across
Europe Other people deposit money with wool merchants branch
offices in one place & take letters of credit to withdraw money
in other branch offices so they do not have to carry cash across
Europe
- Slide 114
- -MC settle on Chateaus & waste $ like other nobles ->
Constant turnover in ranks -Newer nobles called Nobility of the
robe -Old nobility called nobles of the sword -Only kings (w/MC
help) can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash FC.75A THE BIRTH OF BANKING Merchants send agents to
other countries who borrow local Church taxes & use them for
their business PiratesStorms Church collects taxes all over W.
Europe Need to send those taxes to Pope in Italy N. Italian
merchants trade all over W. Eur. Need to send $ from Italy to do
business Risky to carry cash long distances Send letters of credit
back to N. Italy worth the amount of Church taxes they had borrowed
Home office repays the pope in Italy the Church taxes it had
borrowed abroad without either party having to transfer cash across
Europe Other people deposit money with wool merchants branch
offices in one place & take letters of credit to withdraw money
in other branch offices so they do not have to carry cash across
Europe Merchants charge service fees for transferring funds from
one branch office to the next
- Slide 115
- -MC settle on Chateaus & waste $ like other nobles ->
Constant turnover in ranks -Newer nobles called Nobility of the
robe -Old nobility called nobles of the sword -Only kings (w/MC
help) can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash FC.75A THE BIRTH OF BANKING Merchants send agents to
other countries who borrow local Church taxes & use them for
their business PiratesStorms Church collects taxes all over W.
Europe Need to send those taxes to Pope in Italy N. Italian
merchants trade all over W. Eur. Need to send $ from Italy to do
business Risky to carry cash long distances Send letters of credit
back to N. Italy worth the amount of Church taxes they had borrowed
Home office repays the pope in Italy the Church taxes it had
borrowed abroad without either party having to transfer cash across
Europe Other people deposit money with wool merchants branch
offices in one place & take letters of credit to withdraw money
in other branch offices so they do not have to carry cash across
Europe Merchants charge service fees for transferring funds from
one branch office to the next Merchants start to use the money
deposited with them for loans & investments
- Slide 116
- -MC settle on Chateaus & waste $ like other nobles ->
Constant turnover in ranks -Newer nobles called Nobility of the
robe -Old nobility called nobles of the sword -Only kings (w/MC
help) can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash FC.75A THE BIRTH OF BANKING Merchants send agents to
other countries who borrow local Church taxes & use them for
their business PiratesStorms Church collects taxes all over W.
Europe Need to send those taxes to Pope in Italy N. Italian
merchants trade all over W. Eur. Need to send $ from Italy to do
business Risky to carry cash long distances Send letters of credit
back to N. Italy worth the amount of Church taxes they had borrowed
Home office repays the pope in Italy the Church taxes it had
borrowed abroad without either party having to transfer cash across
Europe Other people deposit money with wool merchants branch
offices in one place & take letters of credit to withdraw money
in other branch offices so they do not have to carry cash across
Europe Merchants charge service fees for transferring funds from
one branch office to the next Merchants start to use the money
deposited with them for loans & investmentsBirth of
banking
- Slide 117
- -MC settle on Chateaus & waste $ like other nobles ->
Constant turnover in ranks -Newer nobles called Nobility of the
robe -Old nobility called nobles of the sword -Only kings (w/MC
help) can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash FC.75A THE BIRTH OF BANKING Rise of capitalism
(FC.75) Merchants send agents to other countries who borrow local
Church taxes & use them for their business PiratesStorms Church
collects taxes all over W. Europe Need to send those taxes to Pope
in Italy N. Italian merchants trade all over W. Eur. Need to send $
from Italy to do business Risky to carry cash long distances Send
letters of credit back to N. Italy worth the amount of Church taxes
they had borrowed Home office repays the pope in Italy the Church
taxes it had borrowed abroad without either party having to
transfer cash across Europe Other people deposit money with wool
merchants branch offices in one place & take letters of credit
to withdraw money in other branch offices so they do not have to
carry cash across Europe Merchants charge service fees for
transferring funds from one branch office to the next Merchants
start to use the money deposited with them for loans &
investmentsBirth of banking
- Slide 118
- Social change -BD & 100 Yrs War-> Nobles milit. &
econ. (inflation) decline -Some become courtiers & officers in
kings army; -Some work-> lose noble status in some countries -MC
settle on Chateaus & waste $ like other nobles -> Constant
turnover in ranks -Newer nobles called Nobility of the robe -Old
nobility called nobles of the sword -Only kings (w/MC help) can buy
armies (esp. Guns) & burs - Free peasants -> Incentive to
work -> Productivity rises Credit & deposit banks -Eng
clergy & Ital. Merch both need to transfer $ w/o carrying it
-> Flor. Merch. w/letter of credit borrows $ from church in Eng
-> Ch. Cleric carries letter of credit to Italy & cashes it
-> Both get cash in others country w/o carrying cash ->
Others wanting to transfer $ pay Fl. merch. to move it w/letters of
credit to their Fl. Merchs branch offices -> Banks Banking
centers in Europe Bruges (c.1487) Augsburg (c.1485-1525) Antwerp
(1500s)Lyons (1500s)
- Slide 119
- A merchant dealing money from a counter (banco)
- Slide 120
- Quentin Metsys, Banker and his Wife, 1514. The presence of the
bankers wife in this and the next slide reflect a somewhat higher
status for women in Northern Europe, where they actively helped in
their husbands business. In England, a guild masters widow could
run his business if she had no sons or until her sons were old
enough to take over on their own. Notice how she is leafing through
a book, indicating she is literate.
- Slide 121
- Marinus Claesron van Reymerwarle (late 1400s-1567), The
Moneychanger and His Wife, 1539
- Slide 122
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) New
business techniques to handle larger trade volume: Merchants
undercut guilds w/cottage industs (FC.65) Black Death especially
hurts nobles (FC.71) Age of Explor. New mkts & sources of $
(FC.81) Radically alters W. Eurs polit. & social structure:
Middle class replenishes noble ranks by buying titles & offices
from king Revival of kings power to safeguard peace & order
Surviving peasants inherit victims property & buy freedom from
serfdom Agric., popul., towns & trade revive by 1450 New mkts
w/more people w/modest amounts of $ Look for new markets &
goods outside Europe Deposit banks & credit Safer to invest
Joint stock companies People w/ moderate $ can also invest
Insurance companies Safer to invest -MC settle on Chateaus &
waste $ like other nobles -> Constant turnover in ranks -Newer
nobles called Nobility of the robe -Old nobility called nobles of
the sword -Only kings (w/MC help) can buy armies (esp. Guns) &
burs - Free peasants -> Incentive to work -> Productivity
rises Credit & deposit banks -Eng clergy & Ital. Merch both
need to transfer $ w/o carrying it -> Flor. Merch. w/letter of
credit borrows $ from church in Eng -> Ch. Cleric carries letter
of credit to Italy & cashes it -> Both get cash in others
country w/o carrying cash -> Others wanting to transfer $ pay
Fl. merch. to move it w/letters of credit to their Fl. Merchs
branch offices -> Banks -Credit -> Merch. could send sev.
agents, each w/ letter of credit worth all his cash -> Can work
w/sev. X more $ as he has cold hard cash Florence pro-papal
(Guelph)-> right to collect church taxes How could they involve
investors who each have only a little cash?
- Slide 123
- I only have $100 We only have $100 I only have $100 I only have
garbage I only have $100 I only have 10, 20, 30,40,50,60,70, 80,
90, $100 I only have $100 One day, a bunch of characters wanted to
send out a trading expedition and make a ton of money.
Unfortunately, none of them had the $1,000 needed to finance the
voyage. I only have $100
- Slide 124
- Then one of them had a great idea: Lets cooperate!
- Slide 125
- Heres my$100 Heres my$100 from record sales Heres my$100 Heres
my garbage Heres my$100 Heres my 10, 20, 30,40,50,60,70, 80, 90,
$100 Heres my$100 And they did. Heres my$100
- Slide 126
- So they bought a ship and sent it sailing off to make tons of
money through off-shore tax shelters You sure dont get much for
your money anymore, do you?
- Slide 127
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) New
business techniques to handle larger trade volume: Merchants
undercut guilds w/cottage industs (FC.65) Black Death especially
hurts nobles (FC.71) Age of Explor. New mkts & sources of $
(FC.81) Radically alters W. Eurs polit. & social structure:
Middle class replenishes noble ranks by buying titles & offices
from king Revival of kings power to safeguard peace & order
Surviving peasants inherit victims property & buy freedom from
serfdom Agric., popul., towns & trade revive by 1450 New mkts
w/more people w/modest amounts of $ Look for new markets &
goods outside Europe Deposit banks & credit Safer to invest
Joint stock companies People w/ moderate $ can also invest
Insurance companies Safer to invest -MC settle on Chateaus &
waste $ like other nobles -> Constant turnover in ranks -Newer
nobles called Nobility of the robe -Old nobility called nobles of
the sword -Only kings (w/MC help) can buy armies (esp. Guns) &
burs - Free peasants -> Incentive to work -> Productivity
rises Credit & deposit banks -Eng clergy & Ital. Merch both
need to transfer $ w/o carrying it -> Flor. Merch. w/letter of
credit borrows $ from church in Eng -> Ch. Cleric carries letter
of credit to Italy & cashes it -> Both get cash in others
country w/o carrying cash -> Others wanting to transfer $ pay
Fl. merch. to move it w/letters of credit to their Fl. Merchs
branch offices -> Banks -Credit -> Merch. could send sev.
agents, each w/ letter of credit worth all his cash -> Can work
w/sev. X more $ as he has cold hard cash Florence pro-papal
(Guelph)-> right to collect church taxes What also made
investing safer?
- Slide 128
- -MC settle on Chateaus & waste $ like other nobles ->
Constant turnover in ranks -Newer nobles called Nobility of the
robe -Old nobility called nobles of the sword -Only kings (w/MC
help) can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash Florence pro-papal (Guelph)-> right to collect
church taxes FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600)
New business techniques to handle larger trade volume: Merchants
undercut guilds w/cottage industs (FC.65) Black Death especially
hurts nobles (FC.71) Age of Explor. New mkts & sources of $
(FC.81) Radically alters W. Eurs polit. & social structure:
Middle class replenishes noble ranks by buying titles & offices
from king Revival of kings power to safeguard peace & order
Surviving peasants inherit victims property & buy freedom from
serfdom Agric., popul., towns & trade revive by 1450 New mkts
w/more people w/modest amounts of $ Look for new markets &
goods outside Europe Deposit banks & credit Safer to invest
Joint stock companies People w/ moderate $ can also invest
Insurance companies Safer to invest
- Slide 129
- France Florence Spain Portugal N. Africa Rome $ A bunch of
stuff in between Sicily England Japan Some businessman notices that
1/11 (9%) ships dont make it back for whatever reason
- Slide 130
- France Florence Spain Portugal N. Africa Rome $ A bunch of
stuff in between Sicily England Japan Some businessman notices that
1/11 (9%) ships dont make it back for whatever reason
- Slide 131
- France Florence Spain Portugal N. Africa Rome $ A bunch of
stuff in between Sicily England Japan Some businessman notices that
1/11 (9%) ships dont make it back for whatever reason
- Slide 132
- France Florence Spain Portugal N. Africa Rome $ A bunch of
stuff in between Sicily England Japan Some businessman notices that
1/11 (9%) ships dont make it back for whatever reason
- Slide 133
- France Florence Spain Portugal N. Africa Rome $ A bunch of
stuff in between Sicily England Japan Some businessman notices that
1/11 (9%) ships dont make it back for whatever reason
- Slide 134
- France Florence Spain Portugal N. Africa Rome $ A bunch of
stuff in between Sicily England Japan Some businessman notices that
1/11 (9%) ships dont make it back for whatever reason
- Slide 135
- France Florence Spain Portugal N. Africa Rome $ A bunch of
stuff in between Sicily England Japan Some businessman notices that
1/11 (9%) ships dont make it back for whatever reason
- Slide 136
- France Florence Spain Portugal N. Africa Rome $ A bunch of
stuff in between Sicily England Japan Some businessman notices that
1/11 (9%) ships dont make it back for whatever reason
- Slide 137
- France Florence Spain Portugal N. Africa Rome $ A bunch of
stuff in between Sicily England Japan Some businessman notices that
1/11 (9%) ships dont make it back for whatever reason I dont think
were welcome here.
- Slide 138
- Some businessman notices that 1/11 (9%) ships dont make it back
for whatever reason. -> He sells insurance worth 10% value of
the expeditions to merchants sending them out.
- Slide 139
- Some businessman notices that 1/11 (9%) ships dont make it back
for whatever reason. -> He sells insurance worth 10% value of
the expeditions to merchants sending them out. -> If each
expedition costs 1000 ducats & he sells 11 policies ->
- Slide 140
- Some businessman notices that 1/11 (9%) ships dont make it back
for whatever reason. -> He sells insurance worth 10% value of
the expeditions to merchants sending them out. -> If each
expedition costs 1000 ducats & he sells 11 policies -> He
gets 1100 ducats ->
- Slide 141
- Some businessman notices that 1/11 (9%) ships dont make it back
for whatever reason. -> He sells insurance sells insurance worth
10% value of the expeditions to merchants sending them out. ->
If each expedition costs 1000 ducats & he sells 11 policies
-> He gets 1100 ducats -> If the odds play out & 1
expedition doesnt make it back ->
- Slide 142
- Some businessman notices that 1/11 (9%) ships dont make it back
for whatever reason. -> He sells insurance sells insurance worth
10% value of the expeditions to merchants sending them out. ->
If each expedition costs 1000 ducats & he sells 11 policies
-> He gets 1100 ducats -> If the odds play out & 1
expedition doesnt make it back -> He pays out 1000 ducats for
that policy ->
- Slide 143
- Some businessman notices that 1/11 (9%) ships dont make it back
for whatever reason. -> He sells insurance sells insurance worth
10% value of the expeditions to merchants sending them out. ->
If each expedition costs 1000 ducats & he sells 11 policies
-> He gets 1100 ducats -> If the odds play out & 1
expedition doesnt make it back -> He pays out 1000 ducats for
that policy -> He makes 100 ducats profit for doing what?
- Slide 144
- Some businessman notices that 1/11 (9%) ships dont make it back
for whatever reason. -> He sells insurance sells insurance worth
10% value of the expeditions to merchants sending them out. ->
If each expedition costs 1000 ducats & he sells 11 policies
-> He gets 1100 ducats -> If the odds play out & 1
expedition doesnt make it back -> He pays out 1000 ducats for
that policy -> He makes 100 ducats profit for doing nothing
Nothing!!!
- Slide 145
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) New
business techniques to handle larger trade volume: Merchants
undercut guilds w/cottage industs (FC.65) Black Death especially
hurts nobles (FC.71) Age of Explor. New mkts & sources of $
(FC.81) Radically alters W. Eurs polit. & social structure:
Middle class replenishes noble ranks by buying titles & offices
from king Revival of kings power to safeguard peace & order
Surviving peasants inherit victims property & buy freedom from
serfdom Agric., popul., towns & trade revive by 1450 New mkts
w/more people w/modest amounts of $ Look for new markets &
goods outside Europe Deposit banks & credit Safer to invest
Joint stock companies People w/ moderate $ can also invest
Insurance companies Safer to invest -Only kings (w/MC help) can buy
armies (esp. Guns) & burs - Free peasants -> Incentive to
work -> Productivity rises Credit & deposit banks -Eng
clergy & Ital. Merch both need to transfer $ w/o carrying it
-> Flor. Merch. w/letter of credit borrows $ from church in Eng
-> Ch. Cleric carries letter of credit to Italy & cashes it
-> Both get cash in others country w/o carrying cash ->
Others wanting to transfer $ pay Fl. merch. to move it w/letters of
credit to their Fl. Merchs branch offices -> Banks -Credit ->
Merch. could send sev. agents, each w/ letter of credit worth all
his cash -> Can work w/sev. X more $ as he has cold hard cash
Florence pro-papal (Guelph)-> right to collect church taxes
Insurance Example: -1/11 ships crash -> Charge 10% value of
exped. for insur. -> 1% profit for doing NOTHING Trade? What
also increased $$ supply?
- Slide 146
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) New
business techniques to handle larger trade volume: Merchants
undercut guilds w/cottage industs (FC.65) Black Death especially
hurts nobles (FC.71) Age of Explor. New mkts & sources of $
(FC.81) Radically alters W. Eurs polit. & social structure:
Adoption of Arabic numerals & accounting Ger. mining boom More
$ in circulation Middle class replenishes noble ranks by buying
titles & offices from king Revival of kings power to safeguard
peace & order Surviving peasants inherit victims property &
buy freedom from serfdom Agric., popul., towns & trade revive
by 1450 New mkts w/more people w/modest amounts of $ Look for new
markets & goods outside Europe Deposit banks & credit Safer
to invest Joint stock companies People w/ moderate $ can also
invest Insurance companies Safer to invest -Only kings (w/MC help)
can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash Florence pro-papal (Guelph)-> right to collect
church taxes Insurance Example: -1/11 ships crash -> Charge 10%
value of exped. for insur. -> 1% profit for doing NOTHING Trade?
What helped record keeping?
- Slide 147
- -Only kings (w/MC help) can buy armies (esp. Guns) & burs -
Free peasants -> Incentive to work -> Productivity rises
Credit & deposit banks -Eng clergy & Ital. Merch both need
to transfer $ w/o carrying it -> Flor. Merch. w/letter of credit
borrows $ from church in Eng -> Ch. Cleric carries letter of
credit to Italy & cashes it -> Both get cash in others
country w/o carrying cash -> Others wanting to transfer $ pay
Fl. merch. to move it w/letters of credit to their Fl. Merchs
branch offices -> Banks -Credit -> Merch. could send sev.
agents, each w/ letter of credit worth all his cash -> Can work
w/sev. X more $ as he has cold hard cash Florence pro-papal
(Guelph)-> right to collect church taxes Insurance Example:
-1/11 ships crash -> Charge 10% value of exped. for insur. ->
1% profit for doing NOTHING FC.75 THE ECONOMIC RECOVERY OF EUROPE
(c.1450-1600) New business techniques to handle larger trade
volume: Merchants undercut guilds w/cottage industs (FC.65) Black
Death especially hurts nobles (FC.71) Age of Explor. New mkts &
sources of $ (FC.81) Radically alters W. Eurs polit. & social
structure: Adoption of Arabic numerals & accounting Ger. mining
boom More $ in circulation Middle class replenishes noble ranks by
buying titles & offices from king Revival of kings power to
safeguard peace & order Surviving peasants inherit victims
property & buy freedom from serfdom Agric., popul., towns &
trade revive by 1450 New mkts w/more people w/modest amounts of $
Look for new markets & goods outside Europe Deposit banks &
credit Safer to invest Joint stock companies People w/ moderate $
can also invest Insurance companies Safer to invest
- Slide 148
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) New
business techniques to handle larger trade volume: Merchants
undercut guilds w/cottage industs (FC.65) Black Death especially
hurts nobles (FC.71) Age of Explor. New mkts & sources of $
(FC.81) Radically alters W. Eurs polit. & social structure:
Adoption of Arabic numerals & accounting Ger. mining boom More
$ in circulation Middle class replenishes noble ranks by buying
titles & offices from king Revival of kings power to safeguard
peace & order Surviving peasants inherit victims property &
buy freedom from serfdom Agric., popul., towns & trade revive
by 1450 New mkts w/more people w/modest amounts of $ Look for new
markets & goods outside Europe Deposit banks & credit Safer
to invest Joint stock companies People w/ moderate $ can also
invest Insurance companies Safer to invest -Only kings (w/MC help)
can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash Florence pro-papal (Guelph)-> right to collect
church taxes Insurance Example: -1/11 ships crash -> Charge 10%
value of exped. for insur. -> 1% profit for doing NOTHING The
modern consumer cycle More money invested & circulating rather
than being hoarded Trade?
- Slide 149
- FC.75 THE ECONOMIC RECOVERY OF EUROPE (c.1450-1600) New
business techniques to handle larger trade volume: Merchants
undercut guilds w/cottage industs (FC.65) Black Death especially
hurts nobles (FC.71) Age of Explor. New mkts & sources of $
(FC.81) Radically alters W. Eurs polit. & social structure:
Adoption of Arabic numerals & accounting Ger. mining boom More
$ in circulation Middle class replenishes noble ranks by buying
titles & offices from king Revival of kings power to safeguard
peace & order Surviving peasants inherit victims property &
buy freedom from serfdom Agric., popul., towns & trade revive
by 1450 New mkts w/more people w/modest amounts of $ Look for new
markets & goods outside Europe Deposit banks & credit Safer
to invest Joint stock companies People w/ moderate $ can also
invest Insurance companies Safer to invest -Only kings (w/MC help)
can buy armies (esp. Guns) & burs - Free peasants ->
Incentive to work -> Productivity rises Credit & deposit
banks -Eng clergy & Ital. Merch both need to transfer $ w/o
carrying it -> Flor. Merch. w/letter of credit borrows $ from
church in Eng -> Ch. Cleric carries letter of credit to Italy
& cashes it -> Both get cash in others country w/o carrying
cash -> Others wanting to transfer $ pay Fl. merch. to move it
w/letters of credit to their Fl. Merchs branch offices -> Banks
-Credit -> Merch. could send sev. agents, each w/ letter of
credit worth all his cash -> Can work w/sev. X more $ as he has
cold hard cash Florence pro-papal (Guelph)-> right to collect
church taxes Insurance Example: -1/11 ships crash -> Charge 10%
value of exped. for insur. -> 1% profit for doing NOTHING The
modern consumer cycle More money invested & circulating rather
than being hoarded More trade Production?