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Europe In Retrospect

by Raymond F. Betts

The Old Order

Economic Growth
A Europe of new dimensions took form, shaped by the ocean-going sailing ship whose hold held goods, precious metals, and cannon. The enlargement of territory, of markets, and of governmental responsibilities marked both the seventeenth and eighteenth centuries. In every sense Europe was expanding.

With the founding of colonial empires in the New World and commercial empires in the Indian Ocean, along the coasts of Southeast Asia and among its islands, Europe exported its politics abroad and imported a variety of goods that enriched national treasuries and satisfied new personal wants. The colonial wars of the seventeenth and eighteenth centuries were fought over political control of territories that had new resources of coveted goods in short supply on the Continent. The silver of Peru, the sugar of Santo Domingo, the furs and timber of Canada, the spices of Indonesia were shipped to Europe where they caused a social and commercial revolution of sorts. The smoking of tobacco altered daily custom, as did the drinking of coffee or tea or cocoa. The potato appeared on the evening table and would be the staple of the diet of the poor in the nineteenth century.

At the base of the Industrial Revolution of the nineteenth century stood the accumulated capital of the seventeenth and eighteenth centuries, many historians have contended. Much of this capital was generated in the regional trade of the Caribbean Sea and the Indian Ocean. Significant quantities also came from the holds of the silver fleets, the ships dispatched annually by the Spanish government to bring the mined silver from the New World.

The infamous trade in human kind also worked to Europe's financial benefit. Eighteenth-century commentators said that the city of Liverpool was built on the bones of African slaves. What they thereby indirectly stated was that the shipping industry of that city was directed to the very profitable outfitting of slave ships into which were huddled black Africans destined to work the plantations of the Americas.

While it is true that most continental commerce still moved slowly by ox-cart or horse-drawn coach, the most significant and voluminous activity was now maritime and transatlantic. The new colonial wealth crowded the wharves of bustling ports like Bristol and Bordeaux, from which it was transshipped not only to other cities in England and France, but to those European metropolitan areas not directly involved in maritime commerce with the New World and the Far East. This localized transshipment was the means by which the new goods were widely distributed throughout Europe so that--by way of obvious example--the pungent odor of the coffeehouse filled the streets of Berlin and Brussels as well as those of London and Paris. Moreover, such transshipment facilitated inter-European trade, with important raw materials going from their continental neighbors to England and France. England, for instance, obtained Swedish charcoal for its iron-smelting industry in this manner.

The volume of European trade increased impressively in the late eighteenth century, although the effects were far from geographically uniform. Northern Italy, formerly a major center of commercial activity, suffered depression, while Spain assumed a most peculiar economic position as early as the seventeenth century.

Here was a kingdom suddenly rich in precious metals and equally poor in economic activity. Thanks to the plentiful gold and silver of New World mines, the Spanish could lavishly purchase what they needed elsewhere. England and France became busy suppliers to the Spanish aristocrats and thus developed an important trade as they accumulated capital. As for Spain, its golden practice inhibited the growth of a commercial middle class, a factor that most historians claim is an important reason for Spain's subsequent economic backwardness.

Yet this continual flow of new gold and silver had a wide, salutary effect on the European economy. The increase in the number and circulation of new coins made capital more easily obtained, thereby causing commercial ventures to be more tempting because of lower interest rates to the borrower. Furthermore, older monetary systems were drastically modified by the introduction of bank notes, promissory statements (in effect, i.o.u.'s that were redeemable) based on a bank's precious-metal reserves and soon having the value of paper money--the forerunner of our contemporary system. With the seventeenth century the rudiments of an international banking system were in place. The Banks of Amsterdam (1609) and of England (1694) were major institutions of exchange, and they were joined by a number of private family concerns, of which the House of Rothschild was and would remain the most famous.

Commerce, facilitated by banking, was the basis of the wealth of the new major powers of Europe. And with the ascent of commerce, the ways of the world changed. In this new secular atmosphere, the middle class gained new power and prestige. What has been called the "bourgeois ethos" or general commercial outlook came to predominate and was institutionalized. The "clerk" and the "counting house" took their place among social institutions, alongside the bank and the insurance company. Double-entry bookkeeping in heavy ledgers amounted to a new form of language and authorship. Speculation no longer had to do with how many angels could dance on a head of a pin, but rather with the possible price a shipment of tobacco or rum might bring on the London market.

A new interest in capital accumulation developed, and a new respect for mercantile professions was established. What a man was worth was henceforth measured by his bank account, not the content of his soul. The American colonist Benjamin Franklin was praised for his personal industry and frugality which made him sufficiently wealthy, at an early age to indulge in other activities, like flying kites. Queen Anne made Josiah Wedgwood, now famous for his chinaware, her official potterer, an honor that helped the talented Wedgwood become one of the foremost--and diversified--capitalists of his day. And the French author Voltaire gained, among his many honors, the reputation for being the first writer of note to earn his keep by his own words--and by some speculation on the market. It was Dr. Samuel Johnson, the eighteenth-century English critic, who summed up the new mood. He stated: "Life is short. The sooner that a man begins to enjoy his wealth the better."

Socially, the bourgeoisie added a new tone to European life. Urban centered, this class began to build handsome townhouses, buy up country estates, send its children to school and advise kings. Although a seventeenth-century playwright like Moliere could mock and ridicule this class in his "Bourgeois Gentleman", the bourgeoisie was already rising to be the most significant element in the new socioeconomic order.

What this class still lacked was political authority: the right to play a political rolecommensurate with its economic one. It was, therefore, a legally disadvantaged class.When the French historian Georges Lefebvre wrote that "the Revolution of 1789 restored the harmony between fact and law," he was referring to the fact of the bourgeoisie's economic significance and the need for the law to reflect this.

Yet government was not immune to the new spirit of organization. In every major European country the state was increasing its authority. If the king of England had found his power circumscribed when Parliament finally gained control of the "purse strings" in the Glorious Revolution of 1688, the continental monarch was set upon reducing the authority of the nobles and the provinces. The tendency was toward centralization of governmental function and the creation of a bureaucracy to direct it.

Much more pronounced in the eighteenth than the seventeenth century, this new state activity did, however, affect the new economic interests.

NEXT:  Mercantilism and The Enlightenment

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