Growth of Trade and Banking

Introduction

• Gains in agriculture produced bigger changes in medieval economic life

• Banking was soon introduced to help facilitate this new long distance trade

• The largest banking operations were in Italy

• However, Germany, the low countries, France, and Britain were clearly capitalistic

Exchanges• Between western Europe

and other parts of the world

• Wealthy Europeans developed a taste for luxury goods

• Mediterranean trade developed once again – mainly in the control of Italian merchants

• Timber and grain came from northern Europe and cloth and metal came from the south

• Soon, commercial alliances emerged

• First in Germany – The Hanseatic League– This was a mix of people in Germany and

southern Scandinavia

Banks

• Many Jewish people dominated the banking sector of the economy

• They lended money to the monarchs and the papacy

• This growth of banking and trade served Europe as the origin of capitalism

Capitalism• Investing for profit• Individual merchants could

gain mass amounts of profit• Jacques Coeur - one of Europe’s most famous

entrepreneurs• He founded a trading company that competed

with Italians and Spaniards• He visited Damascus for spices, rugs, silk, and

Indonesian spices• He also became a financial advisor to the King

of France

• However, when it was discovered that he was selling weapons to Muslims, he was tortured and sent to die on a Greek island

Other Leagues and Groups

• Many of the growing commercial cities were run by leagues

• Royal governors did not interfere with commercial business

• Thus, this rising merchant class was gaining power in Europe

• Guilds formed – grouped people in similar businesses, they stressed security and mutual control; all members gained a share of profits

• Artisan guilds were made up of people who actually made cloth, bread, jewelry or furniture

• Guilds guaranteed quality

• They often had a voice in city government