The Commercial Revolution was a prolonged period of global expansion that brought immense wealth to many of the nations of Europe. It helped to establish economic inequality among the nations during that time, setting the stage for an international norm where “first world” and “third world” countries could exist in close proximity. While many agree that the Commercial Revolution helped to grow the economy and provide wealth for many European nations, that wealth was not exactly shared among the various social classes. In fact, the Commercial Revolution was a period mostly enjoyed by those at the top. The period established a stronger hold on power for the aristocracy during that time. Global exploration was largely a rich man’s game, and it was not until the Industrial Revolution that the lower and developing middle classes began to reap rewards.
The Commercial Revolution largely began in the middle to late Middle Ages, as the power brokers in Europe discovered that certain natural commodities were in demand around the world. Things like spices, silk, and the like were desired the world over, and this caused European leaders to seek out new and inventive ways to meet the demand. Exploration became incredibly important in this effort. Christopher Columbus is perhaps the most famous of the explorers, and though he eventually became known as one of the men who discovered the New World, his efforts were largely driven by a desire to find new commercial routes. His example is emblematic of what the Commercial Revolution was all about, however. An Italian man sailing on behalf of the Spanish crown, he was something of a mercenary in this particular industry. He was paid handsomely by the king and queen of Spain. More than just paying him, the crown had to finance his activities, as well. Traveling was expensive, and though it was designed to bring back significant returns, the up-front costs cannot be denied.
In essence, this meant that the only people who could take advantage of the benefits of the Commercial Revolution were those individuals who already had tremendous resources. While it was not just royalty that was able to finance these kinds of ventures, it was mostly the elite classes who were able to engage in this kind of economic adventurism. The Spanish competed with the British, Dutch, and Portuguese for superiority on the seas, with each establishing commercial routes in different parts of the world. Leaders were able to grow their influence because of their ability to withstand the risks of these types of exploratory efforts. In fact, this period was largely characterized by risk. Because many of the routes were unknown and many of the dangers of the sea were extraordinary, it was expected that a large number of missions would end in some form of disaster. Only those individuals with significant financial resources could carry this kind of short-term risk. The king and queen of Spain, for instance, could afford to blow the equivalent of millions of dollars on a potential investment. For those without means, these kinds of ventures could present far too high a risk of ruin. This further limited the benefits to those who already had resources and power.
The Commercial Revolution also brought about the first banking and insurance organizations. These largely helped to grow the power of the upper classes, as banks and insurance companies capitalized on their own expanse of capital at the expense of those without capital. In order to finance exploration, stock investment became a very real and necessary element. This helped necessitate the establishment of exchanges, including the London Royal Exchange in 1565. Originally, these organizations were limited to certain classes of traders, and they were functionally limited to only those individuals with tremendous amounts of money. Likewise, financiers made money by facilitating trades, adding to the power of the elites who occupied those professions. The Commercial Revolution helped to build and grow the financial industry, which played a major role in supporting and building the wealth of those people who already had access to and control of the bulk of society’s capital during that time. Workers, who controlled the labor side of the economy, were largely unable to tap into the opportunities afforded by this particular movement.
Lloyd’s of London was established in 1688 as the first major company to offer insurance. Because of the risk involved in exploration, Lloyd’s saw an opportunity to provide rich people with the security necessary to facilitate greater investment. As a business, insurance was one that rewarded people who had tremendous capital. Lloyd’s took advantage of traditional insurance methodology, of course, pooling money from various individuals in order to share the risk among those different parties. It had to underwrite a significant amount of risk, however, and it was only able to offer catastrophic insurance because of its significant existing resources. Insurance of this nature helped to concentrate more of the wealth in the hands of the people who already had significant capital. The industry continued to grow, of course, and as a consequence of the Commercial Revolution, the upper classes were able to impose their will on the lower classes even more in Europe during the years to follow.
In addition to these effects, the Commercial Revolution simply added to the coffers of Europe’s traditional powers, and given the fact that these countries hardly employed an egalitarian scheme, the bulk of new money was funneled to those people in the upper classes. The Commercial Revolution touched off a period of expansion for England in particular, which took its show to far reaches of the globe in order to expand its power. Spain, too, was able to establish even more national wealth by plundering and stealing from people in various parts of the world. Social revolutions like the one led in eighteenth century France had not yet concentrated power in the hands of the people, so the Commercial Revolution’s added wealth did not benefit the average citizen nearly as much as it benefitted the people that would have been a part of the aristocracy during that particular time.
The Commercial Revolution covered an expansive period of time, and it implicated a wide range of different nations in Europe. It touched off a period of exploration that caused nations to compete, and overall, the collective wealth of the continent grew significantly during this time. Even though this was true, the money was not shared equally by all parties in Europe during this time. Given the cost of taking advantage of new trade and some of the new industries that the Revolution spawned, it simply helped to reinforce the boundaries and differences between those with power and those without. It was not until the Industrial Revolution that workers began to gain power and the so-called middle classes began to develop. The Commercial Revolution, in all of its capitalistic glory, was one that helped to add to the coffers of the people who already had tremendous control in various societies across Europe.