Economic developments of the sixteenth century
Introduction
All too often
historians, and those involved in reenacting history, become concerned about
historical events without questioning the underlying factors that caused them
to occur. The most often ignored of these "hidden" causes is probably
economics. Yet, during the Renaissance, it came to be one of the two major "influencers"
of events on the world stage (religion being the other). One has but to
estimate the revenues saved by the remittance of income to the Pope by the
Protestant rulers to understand the effects of economics upon the policies of
princes. To believe that Henry VIII, Gustavas Vasa and the Protestant princes
of Germany were not influenced by the wealth to be gained by appropriating
Church property in their countries is to insult the intelligence of those great
(and not so great) rulers.
Not
that economics as a driving force of history was something new to the
Renaissance; indeed, far from it. The Romans and Byzantines had understood the
importance of unimpeded trade routes and the generous flow of goods. But four
major events that took place in the 15th and 16th centuries catapulted
economics into a position of prominence that J-t was never again to surrender:
1) the advent of the Renaissance itself, 2) the Reformation, 3) the beginnings
of Nation States and 4) the expansion of Europe into the New World and Far
East.
The Renaissance
If we
consider the Renaissance strictly a cultural phenomenon, it broadened the
horizons of the inquisitive and heightened their interest in the physical
world. A greater demand for books, buildings, furniture, art and clothing
resulted. This, in turn, created "consumer" civilization, the first
of its kind in a thousand years. As fate would have it, just as this awakening
to the exotic, sophisticated and elegant developed, the world's horizons were
expanded by Columbus, da Gama and the other Renaissance explorers. But that is
a theme to which we shall return later.
A new richness and
sophistication developed during the Renaissance that overturned the simpler
standards of the Middle Ages. If the Middle Ages can be categorized as a time
of castles, cathedrals and monasteries, the Renaissance became a time of palaces,
country manors and villas. The change in tastes led to a change in demand and
the creation of new professions, among them the architect.
The Reformation
It would be
both cynical and untrue to say that the Reformation was sparked by the greed of
princes. But the closing of the monasteries and appropriation of Church lands
and properties in several of the newly Protestant countries enriched many royal
coffers. This, coupled with the money no longer paid to the Popes, helped these
countries support costly Courts and equally costly wars.
The Reformation also effected the financial world. Though often ignored,
the Catholic Church frowned on usury if it could be considered theft or further
impoverished the poor. Many of the Protestant reformers believed that interest,
if not oppressive, was in accordance with Nature's Laws. Some even saw it as a
just reward for the service rendered by the loaning of money.
The
"Protestant work ethic" was a stimulant for the working middle class.
Now that working in the service of money could also be seen as working in the
service of God, the bourgeoisie was free to, in good conscience, expand its
role in the newly emergent Capitalism that was emerging in the United Provinces
and, to a lesser extent, England and France.
The Rich Of Nation States
The construction of nation states, a process that would not be complete
until the mid-seventeenth century, was to place vast areas under the control of
individual monarches. Counties, duchies and city states were merged into single
units over which universal standards of measure could be enforced. The Kings
and princes began to dismantle the numerous trade barriers that the feudal
system, by its very nature, had erected. Roads and canals were constructed or
improved, speeding the flow of goods across the state.
The
embryonic nation states of the Renaissance, better organized and resourced than
the surviving city-states in Italy and the smaller states of Germany, came to
dominate the European stage. The normal path for this domination was war. From
1494 to 1559 there was fighting almost every year in some part of Europe. When
these wars became too large for the European stage, they spread to the New
World and the Far East, as they did between Spain and Portugal in the mid
1500's and between England and Spain in the late 16th century.
This heavy reliance on war, and the expenses of their lavish Courts,
left the rulers of the 16th century with Renaissance bills to be paid by feudal
revenue systems. They were forced to invent new sources of income such as the
sales of titles and monopolies. Such sales increased the number and scope of a
late medieval/early Renaissance phenomenon-the merchant/banker prince.
This
is not to say that such an entity was new. The Bardi's had risen to wealth and
power in the 14th century. But they had been decimated by Edward III's refusal
to repay massive loans and the other disasters of the mid 1300's. And none of
the Bardi had been titled. In 1441 the commoner Jacques Coeur had been ennobled
for his financial assistance to the French crown. Jealousy by the old and
established nobility lead to his downfall in 1451 and flight from France in
1454.
It was not until the Medici of Florence and the Fuggers of Bavaria that
the ideal of the merchant prince was to reach its realization. The Medici came
to rule Florence, supplied Popes and became the Grand Dukes of Tuscany. The
Fuggers paid for Charles V election to the imperial throne and were rewarded by
shares of the New World trade confirmation of the monopoly of the Tyrolean
silver mines and, after 1560, patents of nobility. The Fuggers came to control
Spanish custorns and Fugger operations reached from Poland to Portugal to the
Papal States to the New World. This rise
of the middle class, most visible in France, marked the beginning of the modern
age. Slowly at first, the working population began to gain control of the
industrial means of the state in a movement that would eventually relegate the
nobility to the background. In the meantime, it marked a slight softening of
the class boundaries between the gentry/nobility and the wealthy upper middle
class. It was still difficult to "rise above one's station" but it
was not impossible.
In addition to the sales of titles and monopolies, the crowned heads of
the Renaissance resorted to indirect taxes on sales, imports and exports, sales
of crown property and, of course, loans from the Medici, Fuggers and the like.
Some states, France and England in particular, were forced to debase their
coinage to pay for the wars they fought in the first half of the century. The
English penny in 1553 contained one-sixth the silver of the penny of 1509. This
almost Europe-wide (only Spain resisted the temptation to cut the gold and
silver content of their coins---they could afford to) devaluation was one of
the two major factors contributing to the century-long steady rise in prices
that cursed the 16th century. Others, like Spain and Portugal, could rely on
colonial possessions. The western European states, denied an active part in the
economic life of central Europe, became empire builders instead.
The Expansion Of Europe
Spain and Portugal lead the way. Portugal, with the advantage of an
early start, rounded the Cape of Good Hope and soon assumed a dominant position
in the Indian Ocean. In a few years she came to control the spice trade between
Europe and the fabled Spice Islands, cutting Venice out as the middleman.
Sadly, Portugal's peripheral location and lack oil' trade routes with the
interior, led to a concentration of the spice profits in the hands of the
merchants of Antwerp. But, for a short time, Portugal prospered.
Spain, on the other hand, conquered the New World. Tobacco and potatoes
came to the Old World, as did many other crops that would change forever the
culinary and recreational pleasures of Renaissance Europeans. But the most
important import brought back to the New World was an immense amount of silver
and gold. This treasure, brought to a single point in Spain by two fleets per
year, were used to finance the Hapsburg Empires wars against France, England,
the Ottoman Empire, the Protestant German princes, various Italian city states
and not a few internal revolts. The Kings of Spain eventually borrowed against
future shipments and, when these did not match expectations, bankruptcy ensued.
But the most far-reaching effect of this influx of treasure (and the
reason that I believe it to be the single most important economic factor of the
Renaissance) was the so-called Price Revolution. If you compare the amount of
treasure being brought to Europe from the New World to the level of prices in
Europe, you will find that the increases match almost perfectly. The price of
goods increased, on the average, by a factor of three between 1500 and 1600.
Meanwhile wages, because of the devaluation of coinage throughout Europe, with
the exception of Spain, fell by half. Thus, it can be seen, that the effects of
these imports into Europe were generally negative: 1) they provided the
necessary funding for Spain's relentless wars, 2) they led to a raising of
prices while 3) causing a corresponding decline in wages.
Europ’s Econamy 1500-1600
The first fifty years of the 16th century were "boom" years
for Europe's economy. These were years of increased economic activity and
accumulating wealth. Merchants from Antwerp, Venice and Seville traded across
the Baltic, through Germany, into the Levant, into the New World and the Far
East. The pace from 1500 to 1550 was frenzied. After mid-century it began to
slow somewhat. The opening of the world by Spain and Portugal created a
tremendous requirement for investment in new methods and institutions.
Technological advances were required to sail the distances now demanded by the
sizes of the Spanish and Portuguese Empires. New nautical techniques were
needed to deal with winds and currents of the Atlantic and Pacific, which were
fundamentally different from those of the Mediterranean. New market structures
were erected to meet changing supplies and demands as the intermittent medieval
fair systems gave way to the market and bourse. Antwerp became the commercial
center of Europe until its sack in 1576.
Industry in the 16th century was, for the most part, concentrated in a
corridor running from Tuscany to Flanders. Southern England, Holland, northern
France, northern Italy and central Spain were the major textile centers, with
the areas around Naples, Lisbon, Granada and Prague being somewhat less
important producers. Metallurgy was centered in Brussels, central Spain,
Sweden, Verdun and the mountains south of Prague.
Spain, despite its material wealth,
could no longer sustain itself. She had not developed herself economically,
believing that monetary wealth was a replacement for such development. Her
population was decimated by plagues in the 1590's, and this, coupled with
tremendous financial problems, led to a barely perceptible decline by 1598.
France, wracked by a series of costly religious civil wars, was also
economically on the ropes. Her recovery in the 17th century was nothing short
of a miracle. Italy and the Mediterranean tied to the Hapsburg Empire and
Spain, followed them into decline. Towards the end of the century the European
economy slowed considerably. Storm clouds gathered as the flow of treasure from
the New World slowed but the crisis was not to strike until the 17th century.
Holland, through the use of advanced financial and technological
methods, managed to escape much of the ruin that began in the last decade of
the 16th century. Indeed, the Dutch republic stood at the door of a
half-century of triumph that would see her replace Portugal as the dominant
power in the Indian Ocean, plant colonies in the Caribbean and found New York
City. But, due to little foresight on her own account, the future belonged to
England.
16th Centure
Economics And Persona Development
The Renaissance is a fascinating time in which to "live". The
scope for persona development is, in my opinion, far less limited than that of
earlier periods. Many factors contribute to this. These include the ability for
worldwide travel, new wealth, increased sophistication and a loosening of the
boundaries between the upper and middle classes. And the economic trends of the
times contributed to all of these factors. With these factors in mind, I shall
describe how seven basic persona types were effected by Renaissance economics.
The great landed nobility and landed gentry continued to serve as the
ruling class during the Renaissance, just as they had been during the Middle
Ages. In some countries, such as England and, later France, civil wars had
lessened their number-- but not their power. It would await the rise of the
middle class for these two classes to be fatally weakened. During the
Renaissance they became more sophisticated and wealthy, as their states became
more sophisticated and wealthy. They developed a taste for luxury items such as
books, spices and silk. Many amassed impressive libraries and collections.
Humphrey of Gloucester, younger brother of Henry V was known as an educated and
refined man and served as the prototype of the new type of noble--the ones who
could read the books that they collected.
As the influx of silver and gold from
the New World caused a steady increase in prices and as the value of money
eroded over the century an economy based on mobile money began to replace that
based on land holdings and control of industry by the guilds. The great landed
nobles found a knowledge of business and finance increasingly important and the
successful ones invested in the new economic system. The unsuccessful ones
found themselves squeezed between the kings and the business controlled cities.
As the boundaries between the upper and middle class soften a new
phenomenon came into existence---the financier and merchant-prince. Ennobling
for service had been a relatively common thing during the Middle Ages, and it
continued during the Renaissance. Charles Brandon was made the Duke of Suffolk
for services to Henry VIII. But now the rich man could do it as well. Thus, a
persona could spring from wealthy merchants recently inducted into the gentry
or nobility as well as those who were born into it. Some of the gentry, such as
Raleigh and Drake, prospered in part because they were able to give their Queen
a good economic return upon her investments in their undertakings. A financier
persona would also do well. Some of the basic tenets of the Protestant
revolution removed the negative aspects of money handling and lending. Even
non-merchant personae would be aware of the "capitalist revolution"
that was taking place around them and would understand at least some of the
fundamentals of a fluid money economy.
The expansion of Europe into the East and the New World offers wonderful
opportunities for persona development. The first is the explorer persona.
Driven, in part, by the search for trade routes to the riches of the East,
Spain and Portugal sent forth numerous expeditions. The English and French
followed shortly afterwards. The foundation of the explorer persona's reason
for existence might be religious, the search for adventure or the search for
wealth, both persona and for his home country. Either way he too understands
the importance and power of money and can feel how the economic winds are
effecting Europe.
The Renaissance offered the soldier an expanded role as well. For the
first time in a thousand years he is a professional, a part of a nation's
standing army. Instead of serving as a forty days a year vassal to some great
lord or King, the soldier is now a paid (at least in theory) servant of the
crown. He might serve as far afield as Mexico, Peru, India, the Celebes and the
Philippines, particularly in Spanish and Portuguese. His chance for personal
wealth and prosperity, though not great, is far better than it had been in the
past. This is due, in no small part, to the increased wealth of his potential
enemies and paymasters. The soldier also has a much better chance of seeing
much of Europe in his campaign towards wealth and higher social status.
Hapsburg armies fought in Italy, against the Turks, in France, in Germany, in
Hungary, in Ireland and in Holland. In these days, while honor was still
important to the soldier, money and social advancement were also important.
Blaise de Monluc, a member of the minor gentry, was knighted by the King of
France and made a Marshal of France for service to the Crown that took him to
Italy and also involved him in many of the battles during the French Religious
Wars.
Another personal type new to the Renaissance and made possible or at
least strengthened by the economic events of the 16th century is the colonial
administrator. This would be primarily a Spanish or Portuguese persona, since
the only non-Iberian colonies in the 16th century were the ill-fated English
Virginia colony and the French Huguenot colony in Florida. The colonial
administrator is very concerned with the economics of trade between his colony
and the home country. The terms of trade between the two, particularly with
Spain, wag most often unfavorable.
Finally,
a professional class arose during the Renaissance quite separate from the guild
system. Guilds were in decay, as the upper middle class city dwellers began to
gain control of the means of industrial production. The guilds had not been
organized in such a way to take advantage of the newly developed capitalistic
system and paid the price for it. The new professionals, including printers
architects and financiers, were prepared to grasp the reins and became a vital
part of the economic development of Europe, even as they were effected by that
development.
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