ECONOMY
Agriculture
Before the Industrial Revolution, less than 10 % of the people of Europe lived in cities. The rest lived in small towns and villages scattered across the countryside. These people spent most of their working day farming. Unless they could sell surplus food in nearby towns, they grew little more than they needed for themselves.
The people in rural areas made most of their own clothing, furniture, and tools from raw materials produced on the farms or in forests.
The way of life was different from place to place, depending on the climate, the soil, and the distance from towns and trade routes. For most people, life revolved around the agricultural seasons: planting, cultivating, harvesting[1], and processing the harvest. The way of life changed little from one generation to the next, and most sons followed their father's occupation.
Life was hard for most people. They lived under the constant threat that their crops might fail. Although few people starved, many of them suffered from malnutrition. As a result, they caught diseases easily, and epidemics were common.
Most workers produced little and earned little. Only a few people enjoyed large incomes, usually because they owned land, held public office, or had succeeded in business. Little money was saved or invested[2] in business ventures. In fact, there were few opportunities for investment.
Industry
Some industry existed throughout Western Europe. A little hadicraft was carried on in guild shops in towns. Craftspeople in the shops worked with simple tools to make such products as cloth, hardware, jewelry, leather goods, silverware, and weapons. Some products made in the towns were exchanged for food raised in the countryside. Town products were also exported to pay for luxuries imported from abroad, or they were sent to the colonies in payment for raw materials.
Most handicraft, however, took place in homes in rural areas. Merchants called entrepreneurs distributed raw materials to workers in their homes and collected the finished products. The entrepreneurs owned the raw materials, paid for the work, and took the risk of finding a market for their products. They often spread their operations to include workers in nearby villages. In the home, the whole family worked together making clothing, food products, textiles, and wood products. Workers themselves provided most of the power for manufacturing. This kind of handicraft was called domestic system and avoided the guilds regulation.
Trade
The improvement of maritime warships and efficient merchant carriers in the 15th and 16th centuries led to a rapid expansion of commerce. As the cost of transporting huge cargoes[3] over long distances fell, grain was imported on a large scale from the Baltic to the Netherlands and other parts of Europe. New ocean routes between Europe and the East allowed imports from Asia at lower prices and in greater volume than had been possible by overland caravan. The discovery of the Americas created trade in such new commodities as tobacco and wood. Spanish exploitation of the rich gold and silver deposits in Mexico and Peru transformed the character of international commerce. Europe finally possessed a precious metal for which abundant demand existed in the Far East. In return for Asian imports, Europe exchanged silver coin minted[4] in Mexico, Spain, Italy, and Holland.
Using technology and skills developed in transoceanic navigation, the Europeans captured the Asian shipping trade. European vessels[5] transported Japanese copper to China and India, Indian cotton textiles to southern Asia, and Persian carpets to India. Trade grew with incredible speed.
As long-distance trade continued to grow, new forms of commercial organizations appeared. At first, informal associations gave way to legal partnership[6]. Shareholding broke down the social barriers among different classes of merchants and enabled individuals to divide their goods among ships destined for different ports. No longer was international trade limited to those who could afford to travel. After the 16th century, the chartered trading company[7] replaced the temporary partnership as the habitual way for merchants to organize their relations. These great companies, created by the state but privately owned and managed, held national monopolies over trade with certain regions.
TASKS:
1. What peasants did when they had surplus food? What did they use raw materials for?
2. Why did they easily catch diseases?
3. What kind of industry did exist?
4. Write the differences between guild and domestic system.
5. Write the characteristics of chartered trading companies.
[1] To harvest: the activity of collecting a crop.
[2] To invest: to use your money with the aim of making a profit from it, for example by buying property or buying shares in a company.
[3] Things that are sent by ship, plane, train, or truck.
[4] To mint: to make a coin from metal (acuñar).
[5] A large boat or ship.
[6] The position of being one of two or more people who own a company as partners.
[7] Public/national trade companies.
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