page_title: Commercial Revolution
section_title: Inflation
hierarchical_section_title: Commercial Revolution / Colonialism and Mercantilism / Inflation
caption_attribution_description: Bolivia. Carlos III. 1760-1788. AR 8 Reales (a.k.a. Spanish dollar) (39mm, 27.17 g, 12h). Potosi mint. Dated 1768 PTS (Potosi monogram). "Pillar Dollar." CAROLVS • III • D • G • HISPAN • ET IND • REX *, crowned arms; *J/R/* to left, */8/* to right VTRAQVE VNVM * PTS * 1770 * PTS, crowned hemispheres between pillars with banners inscribed, PLUS and VLTRA. KM 105.
context_page_description: The Commercial Revolution consisted of the creation of a European economy based on trade, which began in the 11th century and lasted until it was succeeded by the Industrial Revolution in the mid-18th century. Beginning with the Crusades, Europeans rediscovered spices, silks, and other commodities rare in Europe. This development created a new desire for trade, and trade expanded in the second half of the Middle Ages. Newly forming European states, through voyages of discovery, were looking for alternative trade routes in the 15th and 16th centuries, which allowed the European powers to build vast, new international trade networks. Nations also sought new sources of wealth and practiced mercantilism and colonialism. The Commercial Revolution is marked by an increase in general commerce, and in the growth of financial services such as banking, insurance and investing.
context_section_description: Spain legally amassed approximately 180 tons of gold and 8200 tons of silver through its endeavors in the New World, and another unknown amount through smuggling, spending this money to finance wars and the arts. The spent silver, suddenly being spread throughout a previously cash starved Europe, caused widespread inflation. The inflation was worsened by a growing population but a static production level, low employee salaries and a rising cost of living. This problem, combined with underpopulation (caused by the Black Death), affected the system of agriculture. The landholding aristocracy suffered under the inflation, since they depended on paying small, fixed wages to peasant tenants that were becoming able to demand higher wages.  The aristocracy made failed attempts to counteract this situation by creating short-term leases of their lands to allow periodic revaluation of rent. The manorial system (manor system of lord and peasant tenant) eventually vanished, and the landholding aristocrats were forced to sell pieces of their land in order to maintain their style of living.  Such sales attracted the rich bourgeois (from the French word referring to this dominant class, emerging with commerce), who wanted to buy land and thereby increase their social status.  Former "common lands" were fenced by the landed bourgeois, a process known as "enclosure" which increased the efficiency of raising livestock (mainly sheep's wool for the textile industry). This "enclosure" forced the peasants out of rural areas and into the cities, resulting in urbanization and eventually the industrial revolution.
  On the other hand, the increase in the availability of silver coin allowed for commerce to expand in numerous ways. Inflation was not all bad.
caption: Potosí (Bolivia) silver 8 reales, Carlos III, 1768
exif: {}