The “New Economy” of the 17th Century

Abstract

The article aims to study the economy of 17th century Europe. At the turn of the century, the European nations had reaped the fruits of the great age of discovery and expansion and embarked upon the path of economic and colonial expansion. At that time, “Commercial Revolution" were taking place. Capitalism spread, and some new forms of business organization or techniques for handling capital were devised. The new types of organization included “the putting-out system" and "the gathering-in system. Trade became an important part of a country's wealth, and at the same time, merchants became more powerful and played an increasingly important role in the country's administration. A new innovation emerged with the collaborative investment of a number of companies which later became the dominant form of commercial organization. During this time, Europe also witnessed a new form of economy, the so-called "mercantilism", which allowed government control of foreign trade, to ensure the prosperity and security of a state. For some states, such as France, mercantilism represented primarily the interest of the monarchy. The 17th century also saw the “Price Revolution", the dramatic rise in prices, which continued throughout the century. The poor were most affected by the new economy. The gap between the haves and the have-nots became even wider than at the revival of towns and cities in the 11th century.