Shift in the European economy: Mediterranean to

Atlantic

The period of geographical and economical expansion that began in the

second half of the 16th century slowly came to an end by the 1600 and 1620,
for many regions in Europe. Some areas experienced decelerated growth;
some stagnated, while some others witnessed a steady decline. During this
period the long-distance trade with Asia, Africa and the New World resulted
in the shift of economic centre of Europe from the Mediterranean cities to the
Atlantic coast of north-west Europe. This shift was a clear indication of the
decline of the Italian city-states and the Iberian Peninsula – the two major
economic points in the European economy during the previous centuries as
the trade of the Atlantic Ocean started gaining more prominence than the
Mediterranean trade which was earlier monopolised by the Italian (mainly
Venetian) merchant class.

The seventeenth century witnessed an overall contraction of the European

economy, the commercial and industrial sectors began to lose their drive
because of the lack of support of agriculture. Many parts of Europe
experienced uprisings, major conflicts, wars and breakdown of political
structures. Demographically also many parts of Europe showed decline or
stagnation. All this has led many scholars to conclude that the seventeenth
century was a period of crisis in Europe. The decline of the Mediterranean
states has been particularly highlighted by scholars. However the
north-western region of Europe mainly Holland and England experienced
growth despite decline in other parts of Europe.

Despite being a politically, culturally and socially divided the Mediterranean

region had a certain sense of economic unity. The whole area was
stimulated by trade. The large volume of transactions of currencies and
commodities created prosperity and Venice, Italy was centre of this
economy directly operating in the Mediterranean via intermediaries. The
trading networks connected to the Baltic, Northern and Western Europe and
through the Levant ports in the east to the Indian Ocean and northern Africa.
Some Italian cities had become the centre of industries since the
mid-fourteenth century and Venice along with its extended network of trade
and fleet of trading vessels became the epicentre of the world economy.

Similarly, under the united efforts of the crown of Castile and Aragon, Spain
rose as a leading power in the sixteenth century as the importance of Venice
waned and the zenith of Spanish hegemony was reached in the 1580’s. By
this time, Spain had under its control Portugal, several states of Italy,
Netherlands, the Philippines and territories in north and central America. It
had become the mightiest military power in Europe and possessed the rich
mines of the new world (one of the major reasons for its economic growth
and importance during this period). Antwerp in southern Netherlands
emerged as the economic centre of the world economy, having replaced
Venice. During this time Antwerp was under the Spanish control. However by
the mid-seventeenth century the domination of the Mediterranean states
drew to a close and these powers were pushed outside the main network of
world economy, Antwerp lost its significance to Amsterdam, which many
think symbolises the seventeenth century shift in economic balance from the
Mediterranean to the Atlantic.

Scholars present several explanations for the economic decline during the
seventeenth century. Some historians such as J.H. Elliott, J.I. Israel, Domenico
Sella and F. Braudel emphasize that this period was not one of complete
regression, as suggested by E.J. Hobsbawn, instead only regional decline took
place while, some others consider this to be a period of industrial crisis
affecting manufacturing, trade and commerce. The Marxist historians like
Hobsbawn view the seventeenth century crisis as the crisis of production.

Europe’s economic development was quite uneven there was a stark

difference among regions. Some region witnessed an irrevocable change
lost their earlier domination, certain other experienced slower growth and
few regions made rapid strides in the capitalist direction. The decline of
region did not necessarily mean the decline of an entire region, sometimes it
would lead to the rise of an alternative centre. For example the industrial
decline of Florence was succeeded by the rise of textile industry in Siena and
Prato. Similarly, during this period we see the rise of England and Holland as
alternative centres following the decline of Spain and England.
Some regions in Europe especially northern Europe witnessed a period of
industrial growth and economic progress during this period. Most important
industrial activities during this period were – textile, mineral extraction and
shipbuilding.

While taking up the case of textile production most historians agree that the
Italian textiles had during the seventeenth century virtually disappeared from
the export market. Flemish wool industry which had been expanding in the
previous century also underwent contraction. Many French textile centres like
Amiens, Reims and Rouen dwindled. However, in Holland and England the
textile industry actually grew, especially with the introduction of ‘draperies’.
Leiden, a city in Holland, emerged as one of the most important centres of
industrial production in Europe. In England the rise of the new draperies led to
the domination of the English in the Iberian and the Mediterranean markets.
The success of the textile industry led to an increase in employment
opportunities in England and Holland. While, northern Italy, Germany and
Spain had to deal with unemployment of artisans, their socio-economic
displacement and the disinvestment caused by the destruction of the textile
industry in their respective countries.

Spain’s influx of silver from the Americas declined during this period leading to
a overall decline in currency in Europe and a contraction of international
liquidity. Germany, which was an important centre of silver supply, was faced
with a dramatic loss in its production, as consequence of the economic crisis
as well as the Thirty Years War.

By the beginning of the seventeenth century the Spanish shipbuilding industry

had started to decline, while the shipping industry in Holland stood out as an
important centre especially in Rotterdam.

Ruggiero Romano understood the economic development during the

sixteenth century to be the product of agrarian expansion which fuelled
industry and trade. However, in the seventeenth century the industrial and
trading sector could no longer be supported by agriculture due to what
Romano refers to as an “agrarian crisis”.
Two major areas of trade – the Mediterranean and the Baltic – underwent
significant changes in their trade structure. After 1650, the Mediterranean was
merely an area that exchanged locally produced good and exported only
raw material instead of finished goods like before. The French- Levant trade
also decline after the 1650s. The Baltic region which was earlier the main
source for grains in Western Europe now began exporting timber, metals and
naval stores, instead.

In the sixteenth century, we witness that the conditions in Europe were

favourable for the emergence of capitalist mode of production owing to
factors such as growing population, increase in manufacturing activities,
rising prises and expanding overseas markets. However, the obstacles of the
feudal setup prevented the advance towards modern capitalism. Most
Marxist historians, especially E.J. Hobsbawn therefore conclude that the
seventeenth century crisis that existed in many parts of Europe was actually a
crisis in the mode of production. They argue that the preceding period of
economic growth was set in the feudal matrix from which it was unable to
break free. They see the crisis as the last phase of transition from feudal to
capitalist economy. For Hobsbawn the crisis showed Europe's inability to
overcome obstacles of the feudal structure to reach capitalism.

This is also the time when we witness the north-western countries like Holland
and England carving out new colonial markets and growing towards a
capitalistic mode of production. The expansion of the colonial empire
encouraged the growth of the commercial fleet. Colonies started being
emporia for European goods. Capital investments began to be made in
foreign trade via the East India Companies and the African companies.
According to Hobsbawn the crisis was general to all of Europe and not
confined to specific regions. He says that the solution to this crisis was in
bourgeoisie revolutions such as the English revolution of the 1640’s. He argues
that despite a general crisis in all of Europe the results were different in regions
like England as they were able to break free of their feudal structure and
moves towards capitalism due to such revolutions.

While many historians, as mentioned earlier, see the seventeenth century as a

period of crisis in Europe, there are many others who do not agree with this
view. For example Perez Zagorin and Trevor-Roper do not agree with
Hobsbawm’s analysis. Zagorin argues that there is a lack of evidence to
support Hobsbawm’s argument of a general crisis in Europe. Zagorin does not
find Hobsbawm's connection between the English revolution of the 1640’s to
the crisis convincing. John Elliot and AD Lublinskaya also reject the notion of
a general crisis in Europe. Pierre Goubert suggests that an examination of the
French localities would undermine the assumption that any one period was a
time of specific economic crisis and it varied from region to region. Since this
debate remains inconclusive it is tricky say whether or not the seventeenth
century was in fact a period of crisis in Europe.

The vacuum created by the decline of the Spanish, Italian and the other
prominent European economies due to various contributing factors from the
beginning of the seventeenth century was thus filled by the rising economies
of England and Holland, which took advantage of the economic situation.
The rise of the England and Holland resulted in a geographical shift in the
economic centre of Europe, thereby resulting in the shift of economic
balance from the Mediterranean to the Atlantic.