The First Modern Economy
Shawana Messerli
Various events and historical transitions have been proposed as the start of the early modern period, including the fall of Constantinople in 1453, the start of the Renaissance, the end of the Crusades and the beginning of the Age of Discovery. Its end is often marked by the French Revolution, and sometimes also the American Revolution or Napoleon's rise to power.[1][2]
Historians in recent decades have argued that, from a worldwide standpoint, the most important feature of the early modern period was its spreading globalizing character.[3] New economies and institutions emerged, becoming more sophisticated and globally articulated over the course of the period. The early modern period also included the rise of the dominance of mercantilism as an economic theory. Other notable trends of the period include the development of experimental science, increasingly rapid technological progress, secularized civic politics, accelerated travel due to improvements in mapping and ship design, and the emergence of nation states.
The early modern period is a subdivision of the most recent of the three major periods of European history: antiquity, the Middle Ages and the modern period. The term "early modern" was first proposed by medieval historian Lynn Thorndike in his 1926 work A Short History of Civilization as a broader alternative to the Renaissance. It was first picked up within the field of economic history during the 1940s and 1950s and gradually spread to other historians in the following decades and became widely known among scholars during the 1990s.[4]
At the onset of the early modern period, trends in various regions of the world represented a shift away from medieval modes of organization, politically and economically. Feudalism declined in Europe, and Christendom saw the end of the Crusades and of religious unity in Western Europe under the Roman Catholic Church. The old order was destabilized by the Protestant Reformation, which caused a backlash that expanded the Inquisition and sparked the disastrous European wars of religion, which included the especially bloody Thirty Years' War and ended with the establishment of the modern international system in the Peace of Westphalia. Along with the European colonization of the Americas, this period also contained the Commercial Revolution and the Golden Age of Piracy. The globalization of the period can be seen in the medieval North Italian city-states and maritime republics, particularly Genoa, Venice, and Milan. Russia reached the Pacific coast in 1647 and consolidated its control over the Russian Far East in the 19th century. The Great Divergence took place as Western Europe greatly surpassed China in technology and per capita wealth.[5]
As the Age of Revolution dawned, beginning with revolts in America and France, political changes were then pushed forward in other countries partly as a result of upheavals of the Napoleonic Wars and their impact on thought and thinking, from concepts from nationalism to organizing armies.[6][7][8] The early period ended in a time of political and economic change, as a result of mechanization in society, the American Revolution, and the first French Revolution; other factors included the redrawing of the map of Europe by the Final Act of the Congress of Vienna[9] and the peace established by the Second Treaty of Paris, which ended the Napoleonic Wars.[10]
In the Americas, pre-Columbian peoples had built a large and varied civilization, including the Aztec Empire, the Inca civilization, the Maya civilization and its cities, and the Muisca. The European colonization of the Americas began during the early modern period, as did the establishment of European trading hubs in Asia and Africa, which contributed to the spread of Christianity around the world. The rise of sustained contacts between previously isolated parts of the globe, in particular the Columbian Exchange that linked the Old World and the New World, greatly altered the human environment. Notably, the Atlantic slave trade and colonization of Native Americans began during this period.[11] The Ottoman Empire conquered Southeastern Europe, and parts of West Asia and North Africa.[12]
In the Islamic world, after the fall of the Timurid Renaissance, powers such as the Ottoman, Suri, Safavid, and Mughal empires grew in strength (three of which are known as gunpowder empires for the military technology that enabled them). Particularly in the Indian subcontinent, Mughal architecture, culture, and art reached their zenith, while the empire itself is believed to have had the world's largest economy, bigger than the entirety of Western Europe and worth 25% of global GDP.[13] By the mid-18th century, India was a major proto-industrializing region.[14]
Meanwhile, in Southeast Asia, the Toungoo Empire along with Ayutthaya experienced a golden age and ruled a large extent of Mainland Southeast Asia,[15][16] with the Nguyen and Trinh lords[17] de facto ruling the south and north of present-day Vietnam respectively, whereas the Mataram Sultanate was the dominant power in Maritime Southeast Asia. The early modern period experienced an influx of European traders and missionaries into the region.
In Early Modern times, the major nations of East Asia attempted to pursue a course of Isolationism from the outside world but this policy was not always enforced uniformly or successfully. However, by the end of the Early Modern Period, China, Korea and Japan were mostly closed and uninterested in Europeans, even while trading relationships grew in port cities such as Guangzhou and Dejima.
In the early Ming dynasty, urbanization increased as the population grew and as the division of labor grew more complex. Large urban centers, such as Nanjing and Beijing, also contributed to the growth of private industry. In particular, small-scale industries grew up, often specializing in paper, silk, cotton, and porcelain goods. For the most part, however, relatively small urban centers with markets proliferated around the country. Town markets mainly traded food, with some necessary manufactures such as pins or oil. In the 16th century the Ming dynasty flourished over maritime trade with the Portuguese, Spanish and Dutch Empires. The trade brought in a massive amount of silver, which China at the time needed desperately. Prior to China's global trade, its economy ran on paper money. However, in the 14th century, China's paper money system suffered a crisis, and by the mid-15th century, crashed.[22] The silver imports helped fill the void left by the broken paper money system, which helps explain why the value of silver in China was twice as high as the value of silver in Spain during the end of the 16th century.[23]
China under the later Ming dynasty became isolated, prohibiting the construction of ocean going sea vessels.[24] Despite isolationist policies the Ming economy still suffered from an inflation due to an overabundance of Spanish New World silver entering its economy through new European colonies such as Macau.[25] Ming China was further strained by victorious but costly wars to protect Korea from Japanese Invasion.[26] The European trade depression of the 1620s also hurt the Chinese economy, which sunk to the point where all of China's trading partners cut ties with them: Philip IV restricted shipments of exports from Acapulco, the Japanese cut off all trade with Macau, and the Dutch severed connections between Goa and Macau.[27]
The damage to the economy was compounded by the effects on agriculture of the incipient Little Ice Age, natural calamities, crop failure and sudden epidemics. The ensuing breakdown of authority and people's livelihoods allowed rebel leaders, such as Li Zicheng, to challenge Ming authority.
The Ming dynasty fell around 1644 to the ethnically Manchu Qing dynasty, which would be the last dynasty of China. The Qing ruled from 1644 to 1912, with a brief, abortive restoration in 1917. During its reign, the Qing dynasty adopted many of the outward features of Chinese culture in establishing its rule, but did not necessarily "assimilate", instead adopting a more universalist style of governance.[28] The Manchus were formerly known as the Jurchens. When Beijing was captured by Li Zicheng's peasant rebels in 1644, the Chongzhen Emperor, the last Ming emperor, committed suicide. The Manchus then allied with former Ming general Wu Sangui and seized control of Beijing, which became the new capital of the Qing dynasty. The Manchus adopted the Confucian norms of traditional Chinese government in their rule of China proper. Schoppa, the editor of The Columbia Guide to Modern Chinese History argues,
"A date around 1780 as the beginning of modern China is thus closer to what we know today as historical 'reality'. It also allows us to have a better baseline to understand the precipitous decline of the Chinese polity in the nineteenth and twentieth centuries."[29]
Following contact with the Portuguese on Tanegashima Isle in 1543, the Japanese adopted several of the technologies and cultural practices of their visitors, whether in the military area (the arquebus, European-style cuirasses, European ships), religion (Christianity), decorative art, language (integration to Japanese of a Western vocabulary) and culinary: the Portuguese introduced tempura and valuable refined sugar.[30]
The Edo period from 1600 to 1868 characterized early modern Japan. The Tokugawa shogunate was a feudalist regime of Japan established by Tokugawa Ieyasu and ruled by the shōguns of the Tokugawa clan. The period gets its name from the capital city, Edo, now called Tokyo. The Tokugawa shogunate ruled from Edo Castle from 1603 until 1868, when it was abolished during the Meiji Restoration in the late Edo period (often called the Late Tokugawa shogunate).[32]
Society in the Japanese "Tokugawa period" (Edo society), unlike the shogunates before it, was based on the strict class hierarchy originally established by Toyotomi Hideyoshi. The daimyōs (feudal lords) were at the top, followed by the warrior-caste of samurai, with the farmers, artisans, and traders ranking below. The country was strictly closed to foreigners with few exceptions with the Sakoku policy.[33] Literacy among the Japanese people rose in the two centuries of isolation.[33]
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