World Economy – Foundations of the European Miracle
What is the European miracle?
View that Europe OVERTOOK Asia vs Asia falling behind
Key features:
• State involvement – effective decentralised state
• Private order institutions – independent legal, religious systems
• Late medieval commercial revolution – increased trade and finance
Who were the key players and why?
• Italian City States – revival of trade – venetian trade
• Portugal – Great Discoveries
• Holland/ England – Merchant capitalism
• Britain – modern economic growth
Italian City States – Venice, Genoa and Florence
Shipping and commerce
• City states were highly urbanised
• Venice reopened European trade after Romans
• Genoese victory in 1291 against Morocco opened Gibraltar for trade routes
Agriculture & industry
• Trade related industries emerged as key economic sectors e.g. shipbuilding, timber,
carpentry etc
• Food productivity high – allowed for specialisation in industry
Explanations for Italian success
1) Good policy/ state involvement
• State heavily involved in ship building industry
• State leased public owned galleys to privatise enterprise
• State arranged organisation and timing of trade convoys
2) Good institutions
• New business organisations
• Regulated govt bond market
• Democratic governance system – governed by merchant class
Portugal and ‘The Great Discoveries’
Shipping and Commerce
• Overtook Italy as leader in shipbuilding during c15th
• Major discoveries India (1498), Canton (1513) and Japan (1550s)
• Established trading ports from Mozambique to Indonesia and established major sugar and
slave colonies.
Slavery and sugar
• 4.5 million slaves shipped by Portugal to Americas from 1500-1870
• Slave trade received papal legitimacy
Despite this, agriculture and industry remained backwards.
What is the European miracle?
View that Europe OVERTOOK Asia vs Asia falling behind
Key features:
• State involvement – effective decentralised state
• Private order institutions – independent legal, religious systems
• Late medieval commercial revolution – increased trade and finance
Who were the key players and why?
• Italian City States – revival of trade – venetian trade
• Portugal – Great Discoveries
• Holland/ England – Merchant capitalism
• Britain – modern economic growth
Italian City States – Venice, Genoa and Florence
Shipping and commerce
• City states were highly urbanised
• Venice reopened European trade after Romans
• Genoese victory in 1291 against Morocco opened Gibraltar for trade routes
Agriculture & industry
• Trade related industries emerged as key economic sectors e.g. shipbuilding, timber,
carpentry etc
• Food productivity high – allowed for specialisation in industry
Explanations for Italian success
1) Good policy/ state involvement
• State heavily involved in ship building industry
• State leased public owned galleys to privatise enterprise
• State arranged organisation and timing of trade convoys
2) Good institutions
• New business organisations
• Regulated govt bond market
• Democratic governance system – governed by merchant class
Portugal and ‘The Great Discoveries’
Shipping and Commerce
• Overtook Italy as leader in shipbuilding during c15th
• Major discoveries India (1498), Canton (1513) and Japan (1550s)
• Established trading ports from Mozambique to Indonesia and established major sugar and
slave colonies.
Slavery and sugar
• 4.5 million slaves shipped by Portugal to Americas from 1500-1870
• Slave trade received papal legitimacy
Despite this, agriculture and industry remained backwards.
