The Commercial Revolution that took place in the 12th Century marked a period in history where European countries were characterized by changes in business procedures and attitudes towards business. This period is cited as a revolution though it did not essentially involve violence like many political revolutions do, for a number of reasons. First of all, this period was marked by an increase in trade volumes in Europe. Secondly, there arose sophisticated business procedures and new attitudes towards business developments. This paper seeks to demonstrate that this period was indeed a commercial revolution centered on change in business procedures and new attitudes towards business. Towards this end, this paper shall examine and review documents and records from ancient medieval merchants of the time.
In Chapter Six of the Book, Connecting with the Medieval Past, the author presents evidence of records and other documents and practices that point to an evolution of new business procedures and attitudes. With respect to the changing business procedures at the time, it is imperative to examine the dates of the documents drafted at the time to facilitate the business transactions. Through this way, we shall then be able to notice the minor changes as economic revolutions are distinctively different from political revolution which are usually more manifest. The author begins from a look at the Early Medieval Age in the 10th Century and notes that this society was largely rural and with notable absence of trade as evidenced by the lack of sources about trade. The rarity of the commercial documents at the time points to the dearth of trade. Nonetheless, this changed with the advent of the 12th century which now speaks to the increase in volume of trade. The increased volume of trade in the 12th century posed a number of problems to the medieval economy at the time.
In particular, the first document as depicted on page 116 of the book reveals that the increase in volume of trade presented a problem of money to the medieval economy. This was due to the absence of gold and silver available for coins so as to cater for the increased volume of trade. In a bid to circumvent this problem, the merchants employed several measures such as the development of paper letters of exchange and deposit statements in lieu of metal coins. The innovation of paper letters and deposit statements on the part of merchants had the effect of freeing the metal coins which were then used for other businesses besides relieving the merchants of carrying the cash which presented security concerns. Another change in business procedures and which pointed to an increasing complexity of the procedures related to the theological doctrine at the time. At the time in the West, the predominant Christian religion forbade usury, which connotes the earning of interest on loans. This doctrine had been developed by the church in the Early Middle Ages when loans were meant for consumption. This doctrine was premised on the view that a Christian should not benefit when a fellow Christian is in a financial problem. They had an attitude that loans should be advanced out of love and with no intention of profiting. This position meant that only the Jews were the primary moneylenders in the medieval society.
The increasing complexity of business procedures is also demonstrated in the first six documents which are notarial contracts drawn up by Italian Merchants and are in a big way similar to the modern day legal contract documents. In addition to the notarial contracts, as laid on page 118 of the book, personal letters and account books are used to show the expansion of trade that was a feature of the commercial revolution. For instance, source 7 depicts a letter written by a merchant conducting business in the south of France. In this letter, it is clear that the investor will receive interest on the money advanced yet the merchant does not refer to the transaction as a loan but rather, an exchange. Source 8 is an extract of a merchant account book from the early part of the 12th century while source 9 consists of an account book at the end of the 14th century. This again points to changing business procedures. For instance, in the first account book, there is only one column which is easier to use than the second account book of the later time which has two columns and is difficult to understand. It must also be set out that though source 7 as cited above as well as other notarial contracts did mention the charging of interest, this view was not shared by all merchants. Indeed, document 10 shows a letter written by a notary on behalf of a merchant and sent to an official of the Church. In the letter, the merchant does not wish to charge interest on his loans and he promises to give out his money owing to his illness. It is likely that he hopes to get healed by doing this act of giving away his money and not charging interest. Document 9 shows an account book which has both a debit and a credit entry, an accounting practice known as double entry keeping in modern day commerce. This practice has been touted as one of the most significant changes in commercial accounting. Similarly, there is a palpable change in the types of currencies used in the two accounts.
Without doubt, the above listed sources, documents and evidence demonstrated a change in business procedures geared towards sophistication and complexity. Similarly, the changes were accompanied by an increase in volume of trade. Most importantly, though it is not easy to document, it is clear that there was a change to capitalism. Despite the disapproval of Church on the charging of interest on loans, it is clear from the records of the contracts that the same discussed matters of interest. There is a trend seen where the church in Europe extols the making of profits by ascribing economic prosperity with blessings from God. Similarly, it denounced poverty as laziness and against God’s will. This change of attitude towards business marked a tilt towards the development of a capitalist spirit.
Works Cited
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Wiesner-Hanks, Mary E, William Bruce Wheeler and Kenneth R Curtis. Discovering the Medieval Past. Gloucester: Cengage Learning, 2006.
