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108-642: The term itself was used by Karl Polanyi in his The Great Transformation: " Politically, the centralized state was a new creation called forth by the Commercial Revolution...". Later the economic historian Roberto Sabatino Lopez , used it to shift focus away from the English Industrial Revolution . In his best-known book, The Commercial Revolution of the Middle Ages (1971, with numerous reprints), Lopez argued that

216-471: A balance of power and creating the conditions for the artistic and intellectual changes produced by the Italian Renaissance . The deterioration of the climate that brought about the end of the medieval warm period (or medieval weather anomaly) caused an economic decline at the beginning of the 14th century (see Great Famine ). However, demographic expansion continued until the arrival of

324-462: A German bishop who visited central Italy during the 12th century, commented that Italian towns had appeared to have exited from feudalism, so that their society was based on merchants and commerce. Even northern cities and states were also notable for their maritime republics , especially the Republic of Venice and Genoa . Compared to absolutist monarchies or other more centrally controlled states,

432-423: A cultural version of economics, which emphasizes the way economies are embedded in society and culture. This opinion is counter to mainstream economics but is popular in anthropology , economic history , economic sociology and political science . Polanyi's approach to the ancient economies has been applied to a variety of cases, such as Pre-Columbian America and ancient Mesopotamia , although its utility to

540-576: A duke but a council of influential citizens. The Dutch later started joint stock companies , which let shareholders invest in business ventures and get a share of their profits – or losses. In 1602, the Dutch East India Company issued the first shares on the Amsterdam Stock Exchange . It was the first company to issue stocks and bonds. The Amsterdam Stock Exchange (or Amsterdam Beurs) is also said to have been

648-787: A handful of other regions throughout Europe to become independent and powerful city-states. In Italy the breakaway from their feudal overlords occurred in the late 12th century and 13th century, during the Investiture controversy between the Pope and the Holy Roman Emperor : Milan led the Lombard cities against the Holy Roman Emperors and defeated them, gaining independence ( battles of Legnano , 1176, and Parma , 1248; see Lombard League ). Similar town revolts led to

756-463: A large grant from the Ford Foundation to study the economic systems of ancient empires. Having described the emergence of the modern economic system, Polanyi now sought to understand how "the economy" emerged as a distinct sphere in the distant past. His seminar at Columbia drew several famous scholars and influenced a generation of teachers, resulting in the 1957 volume Trade and Market in

864-403: A letter in which he withdrew his imperial support of Gregory as pope in no uncertain terms: the letter was headed "Henry, king not through usurpation but through the holy ordination of God, to Hildebrand, at present not pope but false monk". It called for the election of a new pope. His letter ends, "I, Henry, king by the grace of God, with all of my Bishops, say to you, come down, come down!", and

972-807: A new path of eastern trade was possible, ending the monopoly of the Ottoman Turks and the Italian city-states. The wealth of the Indies was now open for the Europeans to explore; the Portuguese Empire was one of the early European empires to grow from spice trade. Following this, Portugal became the controlling state for trade between east and west, followed later by the Dutch city of Antwerp . Direct maritime trade between Europe and China started in

1080-573: A new pope, Pope Victor III . He owed his elevation to the influence of the Normans. Antipope Clement III still occupied St. Peter's. When Victor III died, the cardinals elected Pope Urban II (1088–99). He was one of three men Gregory VII suggested as his successor. Urban II preached the First Crusade, which united Western Europe, and more importantly, reconciled the majority of bishops who had abandoned Gregory VII. The reign of Henry IV showed

1188-545: A newfound faith in gold coinage. Italian city-states such as Genoa and Florence (where the first gold coins began to be minted in 1252) and kingdoms such as the Kingdom of Sicily routinely received gold through such trading partners as Tunisia and Senegal. A new, stable and universally accepted coinage that was both compatible with traditional European coinage systems and serviced the increased demand for currency to facilitate trade made it even more lucrative to carry out trade with

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1296-528: A papal banner and the distant blessing of Pope Alexander II upon his invasion, but had successfully rebuffed the pope's assertion after the successful outcome, that he should come to Rome and pay homage for his fief, under the general provisions of the Donation of Constantine . The ban on lay investiture in Dictatus papae did not shake the loyalty of William's bishops and abbots. In the reign of Henry I ,

1404-453: A position at Bennington College . Polanyi had for many years sought employment at British universities but was unsuccessful. The book was published in 1944, to great acclaim. In it, Polanyi described the enclosure process in England and the creation of the contemporary economic system at the beginning of the 19th century. Polanyi joined the staff of Bennington College in 1940, teaching

1512-571: A profit, and frequently an entire cargo would disappear all together. To mitigate this risk, the wealthy got together to share the risk through stock: people would own shares of a venture, so that if there was a loss, it would not be an all consuming loss costing the individual investor everything in one transaction. Other ways of dealing with the risk and expense associated with all of the new trade activity include insurance and joint stock companies which were created as formal institutions. People had been informally sharing risk for hundreds of years, but

1620-752: A prominent socialist after the accession of Hitler to office in January 1933 and the suspension of the Austrian parliament by the rising tide of clerical fascism in Austria. He left for London in 1933, where he earned a living as a journalist and tutor and obtained a position as a lecturer for the Workers' Educational Association in 1936. His lecture notes contained the research for what later became The Great Transformation . However, he would not start writing this work until 1940, when he moved to Vermont to take up

1728-654: A result of the Black Death , and the Crusades . Banks, stock exchanges, and insurance became ways to manage the risk involved in the renewed trade. New laws came into being. Travel became safer as nations developed. Economic theories began to develop in light of all of the new trading activity. The commercial revolution is also marked by the formalization of pre-existing, informal methods of dealing with trade and commerce. Spain legally amassed approximately 180 tons of gold and 8200 tons of silver through its endeavors in

1836-493: A securities market, though by 1801 it had become a stock exchange. Historian Fernand Braudel suggests that in Cairo in the 11th-century Muslim and Jewish merchants had already set up every form of trade association and had knowledge of every method of credit and payment, disproving the belief that these were invented later by Italians. In 12th century France the courratiers de change were concerned with managing and regulating

1944-755: A series of five timely lectures on the "Present Age of Transformation". The lectures "The Passing of the 19th Century", "The Trend Towards an Integrated Society", "The Breakdown of the International System", "Is America an Exception?", and "Marxism and the Inner History of the Russian Revolution" took place during the early stages of World War II. Polanyi participated in Bennington's Humanism Lecture Series (1941) and Bennington College 's Lecture Series (1943) where his topic

2052-400: A temporary rebirth in the woolen industry. During the 11th century in northern Italy a new political and social structure emerged: the city-state or commune . The civic culture which arose from this urbs was remarkable. In some places where communes arose (e.g. Britain and France), they were absorbed by the monarchical state as it emerged. They survived in northern and central Italy as in

2160-679: A world-renowned ceramist . He was born in Vienna , at the time the capital of the Austro-Hungarian Empire . His father, Mihály Pollacsek , was a railway entrepreneur. Mihály never changed the name Pollacsek , and is buried in the Jewish cemetery in Budapest. Mihály died in January 1905, which was an emotional shock to Karl, and he commemorated the anniversary of Mihály's death throughout his life. Karl and Michael Polanyi's mother

2268-521: Is often quoted with "and to be damned throughout the ages", which is a later addition. The situation was made even more dire when Henry IV installed his chaplain, Tedald, a Milanese priest, as Bishop of Milan , when another priest of Milan, Atto, had already been chosen in Rome by the pope. In 1076 Gregory responded by excommunicating Henry, and deposed him as German king, releasing all Christians from their oath of allegiance. Enforcing these declarations

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2376-543: The Principia , navigation was transformed, because sailors could predict the motion of the moon and other celestial objects using Newton's theories of motion. Starting in 1670, the entire world was measured using essentially modern latitude instruments. In 1676, the British Parliament declared that navigation was the greatest scientific problem of the age and in 1714 offered a substantial financial prize for

2484-571: The Black Death epidemic in 1347, when ca. 50% of the European population was killed by the plague. The economic effects of a labor shortage actually caused wages to rise, while agricultural yields were once again able to support a diminished population. By the beginning of the 15th century, the economic expansion associated with the commercial revolution in earlier centuries returned in full force, aided by improvements in navigation and cartography. Geopolitical, monetary, and technological factors drove

2592-469: 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

2700-605: The Concordat of Worms . The agreement required bishops to swear an oath of fealty to the secular monarch, who held authority "by the lance" but left selection to the church. It affirmed the right of the church to invest bishops with sacred authority, symbolized by a ring and staff . In Germany (but not Italy and Burgundy), the Emperor also retained the right to preside over elections of abbots and bishops by church authorities, and to arbitrate disputes. Holy Roman Emperors renounced

2808-472: 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

2916-636: The Qing dynasty 's colonization of Inner Asia , whereby the high population in China proper produced policies that encouraged Han resettlement in Dzungaria during the 18th century, and Inner Mongolia and Manchuria during the 19th century. Laws began to change to deal with commerce, both internationally, and locally within individual countries. In France, for example, the Ordinance of Marine of Louis XIV

3024-617: The Republic of Venice , for example, had important trade communications with the Muslim and Hindu world and this helped the initial development of the Italian Renaissance . By the late 12th century, a new and remarkable society had emerged in Northern Italy, rich, mobile, and expanding, with a mixed aristocracy and urban borghese ( burgher ) class, interested in urban institutions and republican government. But many of

3132-538: The Roman Empire had been based on money , but after the Empire's fall, money became scarce; power and wealth became strictly land based, and local fiefs were (at least theoretically) self-sufficient. Because trade was dangerous and expensive, there were not many traders, and not much trade. The scarcity of money did not help; however, the European economic system had begun to change in the 14th century, partially as

3240-545: The Siege of Antwerp (1584-1585) , the majority of business transactions were moved to Amsterdam. The Bank of Amsterdam , following the example of a private Stockholm corporation, began issuing paper money to lessen the difficulty of trade, replacing metal (coin and bullion) in exchanges. In 1609 the Amsterdamsche Wisselbank (Amsterdam Exchange Bank) was founded which made Amsterdam the financial center of

3348-589: The 11th to the 13th centuries. Typically there was: In recent writing on the city states, American scholar Rodney Stark emphasizes that they married responsive government, Christianity and the birth of capitalism. He argues that Italy consisted of mostly independent towns, who prospered through commerce based on early capitalist principles and kept both direct Church control and imperial power at arm's length. Cambridge University historian and political philosopher Quentin Skinner has pointed out how Otto of Freising ,

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3456-466: The 16th and 17th centuries was that these informal mechanisms became formalized. Lloyd's of London came into being in 1688 in English coffee shops that catered to sailors, traders, and others involved in trade. Lloyd's coffeehouse published a newspaper, which gave news from various parts of the world, and helped the underwriters of the insurance at the coffeehouse to determine the risk. This innovation

3564-593: The 16th century, after the Portuguese established the settlement of Goa , India in December 1510, and thereafter that of Macau in southern China in 1557. Since the English came late to the transatlantic trade, their commercial revolution was later as well. In 1453, the Ottoman Turks took over Constantinople , which cut off (or significantly increased the cost of) overland trade routes between Europe and

3672-776: The Age of Discovery. During this period (1450–17th century), the European economic center shifted from the Islamic Mediterranean to Western Europe (Portugal, Spain, France, the Netherlands, and to some extent England). This shift was caused by the successful circumnavigation of Africa, which opened up sea-trade with the east: after Portugal's Vasco da Gama rounded the Cape of Good Hope and landed in Calicut , India in May 1498,

3780-996: The Archbishop of York to collect and present all the relevant traditions of anointed kingship. On this topic, the historian Norman Cantor would note: "The resulting ' Anonymous of York ' treatises are a delight to students of early-medieval political theory, but they in no way typify the outlook of the Anglo-Norman monarchy, which had substituted the secure foundation of administrative and legal bureaucracy for outmoded religious ideology." Jus novum ( c.  1140 -1563) Jus novissimum ( c.  1563 -1918) Jus codicis (1918-present) Other Sacraments Sacramentals Sacred places Sacred times Supra-diocesan/eparchal structures Particular churches Juridic persons Philosophy, theology, and fundamental theory of Catholic canon law Clerics Office Juridic and physical persons Associations of

3888-638: The Atlantic Ocean, in 1420. Others are Bartolomeu Dias , who first rounded the Cape of Good Hope ; Vasco da Gama , who sailed directly to India from Portugal; Ferdinand Magellan , the first to circumnavigate the Earth; Christopher Columbus , who significantly encountered the Americas; Jacques Cartier , who sailed for France, looking for the Northwest Passage ; and others. The economy of

3996-557: The British effort to regulate trade. The commercial revolution, coupled with other changes in the early modern period , had dramatic effects on the globe. Karl Polanyi Karl Paul Polanyi ( / p oʊ ˈ l æ n j i / ; Hungarian : Polányi Károly [ˈpolaːɲi ˈkaːroj] ; 25 October 1886 – 23 April 1964) was an Austro-Hungarian economic anthropologist , economic sociologist , and politician, best known for his book The Great Transformation , which questions

4104-645: The Church withdrew support. Henry IV spent the last years of his life desperately grasping to keep his throne. It was a greatly diminished kingdom. The Investiture Controversy continued for several decades as each successive pope tried to diminish imperial power by stirring up revolt in Germany. These revolts were gradually successful. The reign of Henry IV ended with a diminished kingdom and waning power. Many of his underlords had been in constant or desultory revolt for years. Henry IV's insistence that Antipope Clement III

4212-529: The Early Empires . Polanyi continued to write in his later years and established a new journal entitled Coexistence . In Canada he lived in Pickering, Ontario , where he died in 1964. Investiture controversy The Investiture Controversy or Investiture Contest ( German : Investiturstreit , pronounced [ɪnvɛstiˈtuːɐ̯ˌʃtʁaɪt] ) was a conflict between the Church and

4320-497: The European powers produced intense competition for the creation of colonial empires, and fueled the rush to sail out of Europe. The need for silver coinage also affected the desire for expanded exploration as silver and gold were spent for trade to the Middle and Far East. The Europeans had a constant deficit in that silver and gold coin only went one way: out of Europe, spent on the very type of trade that they were now cut off from by

4428-692: The Far East, so alternative routes had to be found. English laws were changed to benefit the navy, but had commercial implications in terms of farming. These laws also contributed to the demise of the Hanseatic League , which traded in northern Europe. Because of the Reconquista , the Spanish had a warrior culture ready to conquer still more people and places, so Spain was perfectly positioned to develop their vast overseas empire . Rivalry between

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4536-456: The Great (936–72), the bishops had been princes of the empire, had secured many privileges, and had become to a great extent feudal lords over great districts of the imperial territory. The control of these great units of economic and military power was for the king a question of primary importance due to its effect on imperial authority. It was essential for a ruler or nobleman to appoint (or sell

4644-611: The Holy Roman Empire. Gregory VII was meanwhile still resisting a few hundred yards away from the basilica in the Castel Sant'Angelo , then known as the house of Cencius . Gregory called on his allies for help, and Robert Guiscard (the Norman ruler of Sicily, Apulia, and Calabria) responded, entering Rome on 27 May 1084. The Normans came in force and attacked with such strength that Henry and his army fled. Gregory VII

4752-719: The Italian Peninsula had great difficulty operating at the end of the 14th century, for lack of silver and gold coin. Nevertheless, by the later 16th century, enough bullion was available that many more people could keep a small amount hoarded and used as capital . In response to this extra available money, northern European banking interests came along; among them was the Fugger family. The Fuggers were originally weavers and cloth merchants, but soon became involved in banking, charging interest, and other financial activities. They dealt with everyone, from small-time individuals, to

4860-466: The Italian communes and commercial republics enjoyed relative political freedom conducive to academic and artistic advancement. Geographically, and because of trade, Italian cities such as Venice became international trading and banking hubs and intellectual crossroads. Harvard historian Niall Ferguson points out that Florence and Venice, as well as several other Italian city-states, played a crucial innovative role in world financial developments, devising

4968-608: The Lenten synod of 7 March 1080 excommunicated Henry IV again. In turn, Henry called a council of bishops at Brixen that proclaimed Gregory illegitimate. The internal revolt against Henry effectively ended that same year, however, when Rudolf von Rheinfeld died. Henry IV named Guibert of Ravenna (who he had invested as bishop of Ravenna) to be pope, referring to Clement III (known by the Catholic Church as Antipope Clement III ) as "our pope". In October 1080, troops raised by

5076-598: The Mediterranean and Black Seas, some of which threatened those of the growing Ottoman Empire. During the Fourth Crusade (1204), Venice conquered a quarter of the Byzantine Empire. The Maritime Republics were one of the main products of this new civic and social culture based on commerce and exchange of knowledge with other areas of the world outside western Europe. The Republic of Ragusa and

5184-497: The Ottomans. Another issue was that European mines were exhausted of silver ore and gold. What ore remained was too deep to recover, as water would fill the mine, and technology was not sufficiently advanced enough to successfully remove the water to get to the ore or gold. A second argument is that trade during the youth of the commercial revolution blossomed not due to explorations for bullion (gold and silver coinings) but due to

5292-743: The Saxons after the First Battle of Langensalza, he wore a hair shirt and stood barefoot in the snow in what has become known as the Road to Canossa . Gregory lifted the excommunication, but the German aristocrats, whose rebellion became known as the Great Saxon Revolt , were not as willing to give up their opportunity and elected a rival king, Rudolf von Rheinfeld . Three years later, Pope Gregory declared his support for von Rheinfeld and then on

5400-538: The Signori were able to found a stable dynasty over their dominated city (or group of regional cities), obtaining also a nobility title of sovereignty by their formal superior, for example in 1395 Gian Galeazzo Visconti bought for 100,000 gold florins the title of Duke of Milan from the emperor Wenceslaus . In the fourteenth and fifteenth centuries, Milan , Venice, and Florence were able to conquer other city-states, creating regional states. The 1454 Peace of Lodi ended their struggle for hegemony in Italy, attaining

5508-419: The Staufen, also known as Hohenstaufen , and the heirs of Lothar III, paving the way for the rise to power of the Hohenstaufen Frederick I (1152–1190). At the time of Henry IV's death, Henry I of England and the Gregorian papacy were also embroiled in a controversy over investiture, and its solution provided a model for the eventual solution of the issue in the empire. William the Conqueror had accepted

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5616-493: The accumulation of precious metals by governments was seen as important to the prestige and power of a modern nation. This involvement in accumulating gold and silver (among other things) became important in the development of the nation-state . Governments' involvement in trade affected the nobility of western European nations, because increased wealth by non-nobles threatened the nobility's place in society (citation needed). Governments became involved in trade directly through

5724-422: The beginning "arbitrarily" in 1488, the year the first European sailed around the Cape of Good Hope . Most historians, including scholars such as Robert Sabatino Lopez , Angeliki Laiou , Irving W. Raymond, and Peter Spufford indicate that there was a commercial revolution of the 11th through 13th centuries, or that it began at this point, rather than later. Italy first felt huge economic changes in Europe from

5832-399: The commercial revolution, so did attempts to understand and influence it. Economic theory as a separate subject of its own came into being as the stresses of the new global order brought about two opposing theories of how a nation accumulates wealth: mercantilistic and free-trade policies. Mercantilism inflamed the growing hostilities between the increasingly centralized European powers as

5940-417: The conceptual validity of self-regulating markets. In his writings, Polanyi advances the concept of the Double Movement , which refers to the dialectical process of marketization and push for social protection against that marketization. He argues that market-based societies in modern Europe were not inevitable but historically contingent. Polanyi is remembered best as the originator of substantivism ,

6048-399: The crowd erupted in anger. Henry took the pope and cardinals hostage until the pope granted Henry V the right of investiture. Then he returned to Germany—crowned emperor and apparent victor over the papacy. Henry's victory was, however, as short-lived as that of his father, Henry IV over Gregory VII. The clergy urged Paschal to rescind his agreement, which he did in 1112. The quarrel followed

6156-493: The debts of agricultural communities on behalf of the banks. Because these men also traded with debts, they could be called the first brokers . In late 13th century Bruges commodity traders gathered inside the house of a man called Van der Beurse , and in 1309 they became the "Bruges Beurse", institutionalizing what had been, until then, an informal meeting. The idea quickly spread around Flanders and neighboring counties and "Beurzen" soon opened in Ghent and Amsterdam . "In

6264-408: The elections of Pope Alexander II and Pope Gregory VII proceeded according to church rules, without the involvement of the Emperor. In 1075, Pope Gregory VII composed the Dictatus papae , though this was not published at the time, cataloging principles of his Gregorian Reforms . One clause asserted that the pope held the exclusive power to depose an emperor. It declared that the Roman church

6372-427: The empire. This combination of factors forced Henry IV to back down, as he needed time to marshal his forces to fight the rebellion. In 1077, he traveled to Canossa in northern Italy, where the Pope was staying in the castle of Countess Matilda , to apologize in person. The pope was suspicious of Henry's motives, and did not believe he was truly repentant. As penance for his sins, and echoing his own punishment of

6480-584: The family may have established a proprietary church or abbey on their estate. Since a substantial amount of wealth and land was usually associated with the office of a bishop or abbot, the sale of church offices—a practice known as " simony "—was an important source of income for leaders among the nobility, who themselves owned the land and by charity allowed the building of churches. Emperors had been heavily relying on bishops for their secular administration, as they were not hereditary or quasi-hereditary nobility with family interests. They justified their power by

6588-433: The first stock exchange to introduce continuous trade in the early 17th century. The Dutch "pioneered short selling , option trading , debt-equity swaps, merchant banking , unit trusts and other speculative instruments , much as we know them." Insurance companies were another way to mitigate risk. Insurance in one form or another has been around as far back as there are records. What differed about insurance going into

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6696-413: The following way: Slaves came from Africa, and went to the Americas; raw materials came from the Americas and went to Europe; from there, finished goods came from Europe and were sold back to the Americas at a much higher price. Due the massive die-off of the indigenous people, the Americas had a local deficit of labor required for the extraction of resources (such as gold and silver) and farming. Europe

6804-475: The formal ways they were now sharing risk was new. Even though the ruling classes would not often directly assist in trade endeavors, and individuals were unequal to the task, rulers such as Henry VIII of England established a permanent Royal Navy, with the intention of reducing piracy, and protecting English shipping. Stock exchanges were developed as the volume of stock transactions increased. The London Royal Exchange established in 1565 first developed as

6912-469: The foundation of city-states throughout medieval Europe, such as in Russia ( Novgorod Republic , 12th century), in Flanders ( Battle of Golden Spurs , 14th century) in Switzerland (the towns of the Old Swiss Confederacy , 14th century), in Germany (the Hanseatic League , 14th–15th century), and in Prussia ( Thirteen Years' War , 15th century). Some Italian city-states became great military powers very early on. Venice and Genoa acquired vast naval empires in

7020-405: The granting of royal trade monopolies. For example, Walter Raleigh had been granted a trade monopoly by Queen Elizabeth , for the export of broadcloth and wine. Ironically, competition between colonial powers led to their granting of trade monopolies to the East India Companies . A triangular trade occurred in this period: between Africa, North and South America, and Europe; and it worked in

7128-403: The hands of the church, but of contested title. He would not interfere with ecclesiastical affairs and churchmen would avoid secular services. The church would be given autonomy and to Henry V would be restored large parts of his empire that his father had lost. And finally, Henry V would be crowned as the Holy Roman Emperor by Paschal. When the concessions of land were read in St. Peter's, however,

7236-432: The heat of exchanges between Westminster and Rome induced Anselm, Archbishop of Canterbury , to give up mediating and retire to an abbey. Robert of Meulan , one of Henry's chief advisors, was excommunicated, but the threat of excommunicating the king remained unplayed. The papacy needed the support of English Henry while German Henry was still unbroken. A projected crusade also required English support. Henry I commissioned

7344-403: The highest nobility. Their banks even loaned to the emperors and kings, eventually going bankrupt when their clients defaulted. This family, and other individuals, used Italian methods which outpaced the Hanseatic League 's ability to keep up with the changes occurring in northern Europe. Antwerp had one of the first money exchanges in Europe, a Bourse , where people could change currency. After

7452-410: The key contribution of the medieval period to European history was the creation of a commercial economy between the 11th and the 14th century, centered at first in the Italo-Byzantine eastern Mediterranean , but eventually extending to the Italian city-states and over the rest of Europe. This kind of economy ran from approximately the 14th century through the 18th century. Walt Whitman Rostow placed

7560-437: The landholding aristocrats were forced to sell pieces of their land to maintain their style of living. Such sales transferred ownership to wealthy commoners, who wanted to buy land and thereby increase their social status. Former "common lands" were fenced by the landed gentry, a process known as " enclosure " which subsidized the cost of raising livestock (mainly sheep's wool for the textile industry ). This "enclosure" forced

7668-406: The main instruments and practices of banking and the emergence of new forms of social and economic organization. It is estimated that the per capita income of northern Italy nearly tripled from the 11th century to the 15th century. This was a highly mobile, demographically expanding society, fueled by the rapidly expanding Renaissance commerce. In the 14th century, just as the Italian Renaissance

7776-517: The middle of the 13th century Venetian bankers began to trade in government securities . In 1351 the Venetian government outlawed spreading rumors intended to lower the price of government funds." Bankers in Pisa , Verona , Genoa and Florence also began trading in government securities during the 14th century. This practice was only possible, because these independent city states were not ruled by

7884-479: The new city-states also housed violent factions based on family, confraternity and brotherhood, who undermined their cohesion (for instance the Guelphs and Ghibellines ). By 1300, most of these republics had become princely states dominated by a Signore . The exceptions were Venice , Florence , Lucca , and a few others, which remained republics in the face of an increasingly monarchic Europe. In many cases by 1400

7992-606: The nobility would have no part in the selection of popes (though the Holy Roman Emperor might confirm the choice) and that electors would be cardinals (which would later evolve into the College of Cardinals ) assembled in Rome. The bull also banned lay investiture. In response, all the bishops in Germany (who supported the Emperor) assembled in 1061 and declared all the decrees of Nicholas II null and void. Nevertheless,

8100-463: The office to) someone who would remain loyal. Problems with simony became particularly unpopular as Pope Benedict IX was accused of selling the papacy in 1045. Henry III, Holy Roman Emperor from 1046 to 1056, settled the papal schism and named several popes, the last emperor to successfully dominate the selection process. Six-year-old Henry IV became King of the Germans in 1056. Benedict X

8208-697: The old right of naming the pope. The Concordat of Worms in 1122 was the result. After the Concordat, the German kings never had the same control over the Church as had existed in the time of the Ottonian dynasty. Henry V was received back into communion and recognized as legitimate emperor as a result. Henry V died without heirs in 1125, three years after the Concordat. He had designated his nephew, Frederick von Staufen duke of Swabia , also known as Frederick II, Duke of Swabia as his successor. Instead, churchmen elected Lothair III . A long civil war erupted between

8316-441: The peasants out of rural areas and into the cities, resulting in urbanization. The increase in the availability of silver coin allowed for commerce to expand in numerous ways. Various legal and religious developments in the late Middle Ages allowed for development of the modern banking system at the beginning of the 16th century. Interest was allowed to be charged, and profits generated from holding other people's money. Banks in

8424-478: The predictable course: Henry V rebelled and was excommunicated. Riots broke out in Germany, a new Antipope Gregory VIII was appointed by the German king, and nobles loyal to Rome seceded from Henry. The unrest and conflict in Germany continued, just as under Henry IV. And the controversy with respect to investiture dragged on for another ten years. Like his father before him, Henry V was faced with waning power. Ultimately, he had no choice but to give up investiture and

8532-438: The price they received for commodities was dependent on the ships returning (which often did not happen on time) and on the cargo they carried (which often was not according to plan). The commodities market was very volatile for this reason, and also because of the many wars that led to cargo seizures and loss of ships. Trade in this period was a risky business: war, weather, and other uncertainties often kept merchants from making

8640-668: The pro-Imperial bishops of Northern Italy clashed with the pro-papal forces of Countess Matilda in the battle of Volta Mantovana . The pro-Imperial forces were victorious, and in March 1081 Henry IV marched from the Brenner Pass into the March of Verona unopposed, entering Milan in April that year. He then attacked Rome and besieged the city with the intent of forcibly removing Gregory VII and installing Clement III. The city of Rome withstood

8748-654: The republican government of Mihály Károlyi and its Social Democratic regime. The republic was short-lived, with socialist Béla Kun toppling the Karolyi government to create the Hungarian Soviet Republic . Polanyi left Hungary for Vienna in order to undergo medical treatment. During this time, the Kun government was replaced by the right-wing authoritarian regime of Admiral Horthy . As a consequence, Polanyi left Hungary permanently. From 1924 to 1933, he

8856-516: The rest of the world. From the 16th to 18th centuries, Europeans made remarkable maritime innovations . These innovations enabled them to expand overseas and set up colonies, most notably during the 16th and 17th centuries. They developed new sail arrangements for ships, skeleton-based shipbuilding, the Western "galea" (at the end of the 11th century), sophisticated navigational instruments, and detailed charts and maps. After Isaac Newton published

8964-485: The right to choose the pope. In the meantime, there was also a brief but significant investiture struggle between Pope Paschal II and King Henry I of England from 1103 to 1107. The earlier resolution to that conflict, the Concordat of London , was very similar to the Concordat of Worms. After the decline of the Western Roman Empire , investiture was performed by members of the ruling nobility (and

9072-455: The siege, but the Vatican and St. Peter's fell in 1083. On the outskirts of the city, Henry gained thirteen cardinals who became loyal to his cause. The next year the city of Rome surrendered and Henry triumphantly entered the city. On Palm Sunday , 1084, Henry IV solemnly enthroned Clement at St. Peter's Basilica ; on Easter Day, Clement returned the favour and crowned Henry IV as Emperor of

9180-476: The solution to finding longitude. This spurred the development of the marine chronometer , the lunar distance method and the invention of the octant after 1730. By the late 18th century, navigators replaced their prior instruments with octants and sextants. Significant contributors to European exploration include Prince Henry the Navigator of Portugal, who was the first of the Europeans to venture out into

9288-538: The state in medieval Europe over the ability to choose and install bishops ( investiture ) and abbots of monasteries and the pope himself. A series of popes in the 11th and 12th centuries undercut the power of the Holy Roman Emperor and other European monarchies , and the controversy led to nearly 50 years of conflict. It began as a power struggle between Pope Gregory VII and Henry IV (then King, later Holy Roman Emperor) in 1076. The conflict ended in 1122, when Pope Callixtus II and Emperor Henry V agreed on

9396-621: The study of ancient societies in general has been questioned. Polanyi's The Great Transformation became a model for historical sociology . His theories eventually became the foundation for the economic democracy movement. Polanyi was active in politics, and helped found the National Citizens' Radical Party in 1914, serving as its secretary. He fled Hungary for Vienna in 1919 when the right-wing authoritarian regime of Admiral Horthy seized power. He fled Vienna for London in 1933 when Adolf Hitler came to power in Germany and fascism

9504-467: The theory of the divine right of kings . Many of the papal selections before 1059 were influenced politically and militarily by European powers, often with a king or emperor announcing a choice which would be rubber-stamped by church electors. The Holy Roman Emperors of the Ottonian dynasty believed they should have the power to appoint the pope. Since the ascendance of the first of that line, Otto

9612-499: The weakness of the German monarchy. The ruler was dependent upon the good will of the nobility of his land. These were technically royal officials and hereditary princes. He was also dependent on the resources of the churches. Henry IV alienated the Church of Rome and many of the magnates in his own kingdom. Many of these spent years in open or subversive rebellion. Henry failed to create a proper bureaucracy to replace his disobedient vassals. The magnates became increasingly independent, and

9720-604: The world until the Industrial Revolution . In a notable example of crossover between stock companies and banks, the Bank of England , which opened in 1694, was a joint-stock company. Banking offices were usually located near centers of trade, and in the late 17th century, the largest centers for commerce were the ports of Amsterdam , London, and Hamburg . Individuals could participate in the lucrative East India trade by purchasing bills of credit from these banks, but

9828-664: Was Cecília Wohl . The name change to Polanyi was made by Karl and his siblings. Polanyi was well educated despite the ups and downs of his father's fortune, and he immersed himself in Budapest 's active intellectual and artistic scene. Polanyi studied at the Minta Gymnasium . Polanyi founded the radical and influential Galileo Circle while at the University of Budapest , a club which would have far reaching effects on Hungarian intellectual thought. During this time, he

9936-492: Was " Jean Jacques Rousseau : Or Is a Free Society Possible?" After the war, Polanyi received a teaching position at Columbia University (1947–1953). However, his wife, Ilona Duczyńska (1897–1978), had a background as a former communist , which made gaining an entrance visa in the United States impossible. As a result, they moved to Canada , and Polanyi commuted to New York City. In the early 1950s, Polanyi received

10044-542: Was a different matter, but the advantage gradually came to be on the side of Gregory VII. German princes and the aristocracy were happy to hear of the king's deposition. They used religious reasons to continue the rebellion started at the First Battle of Langensalza in 1075, and to seize royal holdings. Aristocrats claimed local lordships over peasants and property, built forts, which had previously been outlawed, and built up localized fiefdoms to secure their autonomy from

10152-772: Was actively engaged with other notable thinkers, such as György Lukács , Oszkár Jászi , and Karl Mannheim . Polanyi graduated from Budapest University in 1912 with a doctorate in Law . In 1914, he helped found the National Citizens' Radical Party of Hungary and served as its secretary . Polanyi was a cavalry officer in the Austro-Hungarian Army in World War I , in active service at the Russian Front and hospitalized in Budapest. Polanyi supported

10260-461: Was also during this period that Polanyi grew interested in Christian socialism . He married the communist revolutionary Ilona Duczyńska , of Polish-Hungarian background. Their daughter Kari Polanyi Levitt carried on the family tradition of economic academic research. Polanyi was asked to resign from Der Oesterreichische Volkswirt because the liberal publisher of the journal could not keep on

10368-599: Was also recovering from the Black Plague and its resurgences, and population growth was slowed by intermittent warfare by European nations among themselves and against the Ottoman Empire. As a result of these limitations, the colonial powers were unable to satisfy the labor shortage through emigration, and the Atlantic Slave Trade was established to import the labor. This can be contrasted with

10476-621: Was beginning, Italy was the economic capital of Western Europe: the Italian States were the top manufacturers of finished woolen products. However, with the Black Death in 1348, the birth of the English woolen industry and general warfare, Italy temporarily lost its economic advantage. However, by the late 15th century Italy was again in control of trade along the Mediterranean Sea. It found a new niche in luxury items like ceramics, glassware, lace and silk as well as experiencing

10584-527: Was elected under the influence of the Count of Tusculum , allegedly by bribing the electors. Dissenting cardinals elected Pope Nicholas II in 1058 at Siena . Nicholas II successfully waged war against Benedict X and regained control of the Vatican. Nicholas II convened a synod in the Lateran on Easter in 1059. The results were codified in the papal bull In nomine Domini . It declared that leaders of

10692-459: Was employed as a senior editor of the prestigious Der Österreichische Volkswirt ( The Austrian Economist ) magazine. It was at this time that he first began criticizing the Austrian school of economics , who he felt created abstract models which lost sight of the organic, interrelated reality of economic processes. Polanyi himself was attracted to Fabianism and the works of G. D. H. Cole . It

10800-464: Was forced to abdicate and was succeeded by his son Henry V , who had rebelled against his father in favor of the papacy, and made his father renounce the legality of his antipopes before he died. Henry V realised swift action and a change in his father's policy was necessary. Pope Paschal II rebuked Henry V for appointing bishops in Germany. The king crossed the Alps with an army in 1111. The pope, who

10908-510: Was founded by God alone—that the papal power (the auctoritas of Pope Gelasius ) was the sole universal power; in particular, a council held in the Lateran Palace from 24 to 28 February the same year decreed that the pope alone could appoint or depose churchmen or move them from see to see. By this time, Henry IV was no longer a child, and he continued to appoint his own bishops. He reacted to this declaration by sending Gregory VII

11016-419: Was known as lay investiture ) despite theoretically being a task of the church. Many bishops and abbots were themselves part of the ruling nobility. Given that most members of the European nobility practiced primogeniture , and willed their titles of nobility to the eldest surviving male heir, surplus male siblings often sought careers in the upper levels of the church hierarchy. This was particularly true where

11124-580: Was on the ascendancy in Austria. After years of unsuccessfully seeking employment at universities in the United Kingdom, he moved to the United States in 1940 where he joined the faculty at Bennington College and later taught at Columbia University . Polanyi was born into a Jewish family in Vienna. His younger brother was Michael Polanyi , a philosopher , and his niece was Eva Zeisel ,

11232-470: Was one of many that allowed for the categorization of risk. Another innovation was the use of ship catalogs and classifications. Other forms of insurance began to appear as well. After the Great Fire of London , Nicholas Barbon began to sell fire insurance in 1667. Laws were changed to deal with insurance issues, such as l'Ordonnance de la Marine (by Colbert in 1681). As the economy grew through

11340-480: Was published under the auspices of Colbert in 1691, and was the first complete code of maritime and commercial law; and "when we consider the originality and extent of the design and the ability with which it is executed, we shall not hesitate to admit that it deserves to be ranked among the noblest works that legislative genius and learning have ever accomplished." In England, the Navigation Acts were among

11448-402: Was rescued, but Rome was plundered in the process, for which the citizens of Rome blamed him. As a result, Gregory VII was forced to leave Rome under the protection of the Normans, fleeing to Salerno, where he grew ill and died on 25 May 1085. The last words he uttered were, "I have loved justice and hated iniquity, and therefore I die in exile." Upon the death of Gregory, the cardinals elected

11556-454: Was the real pope had initially been popular with some of the nobles, and even many of the bishops of Germany. But as years passed, this support was slowly withdrawn. The idea that the German king could and should name the pope was increasingly discredited and viewed as an anachronism from a by-gone era. The Empire of the Ottos was virtually lost because of Henry IV. On 31 December 1105, Henry IV

11664-526: Was weak and had few supporters was forced to suggest a compromise, the abortive Concordat of 1111 . Its simple and radical solution of the Investiture Controversy between the prerogatives of regnum and sacerdotium proposed that German churchmen would surrender their lands and secular offices to the emperor and constitute a purely spiritual church. Henry gained greater control over the lands of his kingdom, especially those that had been in

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