Age of Discovery - Global Impact - Economic Impact in Europe

Economic Impact in Europe

As a wider variety of global luxury commodities entered the European markets by sea, previous European markets for luxury goods stagnated. The Atlantic trade largely supplanted pre-existing Italian and German trading powers which had relied on their Baltic, Russian and Islamic trade links. The new commodities also caused social change, as sugar, spices, silks and chinawares entered the luxury markets of Europe.

The European economic center shifted from the Mediterranean to Western Europe. The city of Antwerp, part of the Duchy of Brabant, became "the center of the entire international economy, and the richest city in Europe at this time. Centered in Antwerp first and then in Amsterdam, "Dutch Golden Age" was tightly linked to the Age of Discovery. Francesco Guicciardini, a Venetian envoy, stated that hundreds of ships would pass Antwerp in a day, and 2,000 carts entered the city each week. Portuguese ships laden with pepper and cinnamon would unload their cargo. With many foreign merchants resident in the city and governed by an oligarchy of banker-aristocrats forbidden to engage in trade, the economy of Antwerp was foreigner-controlled, which made the city very international, with merchants and traders from Venice, Ragusa, Spain and Portugal and a policy of toleration, which attracted a large orthodox Jewish community. The city experienced three booms during its golden age, the first based on the pepper market, a second launched by American silver coming from Seville (ending with the bankruptcy of Spain in 1557), and a third boom, after the Treaty of Cateau-Cambresis, in 1559, based on the textiles industry.

Despite initial hostilities, by 1549 the Portuguese were sending annual trade missions to Shangchuan Island in China. In 1557 they managed to convince the Ming court to agree on a legal port treaty that would establish Macau as an official Portuguese trade colony. The Portuguese friar Gaspar da Cruz (c. 1520 February 5, 1570) wrote the first complete book on China and the Ming Dynasty that was published in Europe; it included information on its geography, provinces, royalty, official class, bureaucracy, shipping, architecture, farming, craftsmanship, merchant affairs, clothing, religious and social customs, music and instruments, writing, education, and justice.

From China the major exports were silk and porcelain, adapted to meet European tastes. The Chinese export porcelains were held in such great esteem in Europe that, in English, china became a commonly–used synonym for porcelain. Kraak porcelain (believed to be named after the Portuguese carracks in which it was transported) was among the first Chinese ware to arrive in Europe in mass quantities. Only the richest could afford these early imports, and Kraak often featured in Dutch still life paintings. Soon the Dutch East India Company established a lively trade with the East, having imported 6 million porcelain items from China to Europe between the years 1602 to 1682. The Chinese workmanship impressed many. Between 1575 and 1587 Medici porcelain from Florence was the first successful attempt to imitate Chinese porcelain. Although Dutch potters did not immediately imitate Chinese porcelain, they began to do it when the supply to Europe was interrupted, after the death of Wanli Emperor in 1620. Kraak, mainly the blue and white porcelain, was imitated all over the world by potters in Arita, Japan and Persia— where Dutch merchants turned when the fall of the Ming Dynasty rendered Chinese originals unavailable—and ultimately in Delftware. Dutch and later English Delftware inspired by Chinese designs persisted from about 1630 to the mid-18th century alongside European patterns.

Antonio de Morga (1559–1636), a Spanish official in Manila, listed an extensive inventory of goods that were traded by Ming China at the turn of the 16th to 17th century, noting there were "rarities which, did I refer to them all, I would never finish, nor have sufficient paper for it". After noting the variety of silk goods traded to Europeans, Ebrey writes of the considerable size of commercial transactions: In one case a galleon to the Spanish territories in the New World carried over 50,000 pairs of silk stockings. In return China imported mostly silver from Peruvian and Mexican mines, transported via Manila. Chinese merchants were active in these trading ventures, and many emigrated to such places as the Philippines and Borneo to take advantage of the new commercial opportunities.

The increase in wealth experienced by Spain coincided with a major inflationary cycle both within Spain and Europe, known as price revolution. Spain had amassed large quantities of gold and silver from the New World In the 1520s large scale extraction of silver from Mexico's Guanajuato began. With the opening of the silver mines in Zacatecas and Bolivia's Potosí in 1546 large shipments of silver became the fabled source of wealth. During the 16th century, Spain held the equivalent of US$1.5 trillion (1990 terms) in gold and silver from New Spain. Being the most powerful European monarch at a time full of war and religious conflicts, Philip II squandered wealth in arts and wars across Europe. "I learnt a proverb here", said a French traveler in 1603: "Everything is dear in Spain except silver". The spent silver, suddenly spread throughout a previously cash starved Europe, caused widespread inflation. The inflation was worsened by a growing population but a static production level, low salaries and a rising cost of living. Increasingly Spain became dependent on the revenues flowing in from the mercantile empire in the Americas, leading to Spain's first bankruptcy in 1557 due to rising military costs. Phillip II of Spain, defaulted on their debt several times, had to declare four state bankruptcies in 1557, 1560, 1575 and 1596, becoming the first sovereign nation in history to declare bankruptcy. The increase in prices as a result of currency circulation fueled the growth of the commercial middle class in Europe, the bourgeoisie, which came to influence the politics and culture of many countries.