Europe’s Medieval Period was overwhelmed with a poor to moderate economy due to the onset of voluntary poverty that stemmed from religious roots. Yet the fifteenth century brought hope for Europeans as nations began to rise out of the 1000-year-long Medieval Ages. Fostered by agriculture and trade, Europe would flourish well into the seventeenth century.
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Agriculture flourished as the population increased. A more dense population calls for more food and nourishment from rural economies. Unlike bustling cities, these rural economies were more like the commonly picturesque sleepy villages which provided progressive agricultural production. Not only could the villages maintain nourishment for the local peasants; they could share the surplus with industrial cities that had no space for agriculture. So, it was only viable that within the sixteenth century, farmers would make more land arable than ever before. For example, the Dutch reclaimed more than 36,000 acres in the Netherlands as farmland in a span of just 25 years from 1590 to 1615.
The abundance of farmable agricultural land provides a huge potential for economic growth in the selling of surplus crops. Later, a focused rural industry arose as a result of increased agricultural production . As a result, history shows that the heart of economic development during the seventeenth century was located in rural communities. Rural communities were now home to textile productions, providing a less expensive alternative for the labor of linens and clothes. When cities were destroyed from the Thirty Years’ War (1618-1648) in seventeenth century Germany, rural peasants took on textile production as a means to supplement scant family income.
Trade also contributed to the success of European Economy in the seventeenth century. Through expansion, trade ships could reach the Iberian Peninsula. Like with agriculture, population also benefitted the trade scene. The increase population brought about more manufacturers throughout all of Europe including England, Spain, Italy, and Germany.
An effect of trade was the need for banking. Financial services played an ever increasing role in trade as tradespersons began accepting bank notes instead of only gold and silver coins. Invented by Italians, these promissory notes promised a future “due” date that essentially provided credit to individuals.Further advancement led to the development of banks, and exchangers began to provide loans. This improvement provided exchangers an advantage, as international currency exchange was no longer an issue.
Success of banking continued into the eighteenth century as banks began to provide capital for business investments which in return provided a further source of funds for the bank’s home state. As trade expanded internationally, capital expanded, too. Spanish Ships traveling from the Americas brought gold and silver that provided financial backing for increased European production. For example, this gold and silver funded manufacturing, trade, and even credit lines to many. Credit lines then came in the form of joint-stock partnerships. An innovation from the English, joint-stock companies drew from shareholders to provide a more perpetual funding as capital that showcased the height of economic growth.
