3.3 Continuities and Changes to Economic Practice and Development

Even in 1750, most Europeans lived in villages and farmed. Harvests still decided whether people ate well or starved. France's famine of 1693–1694 killed more than a million people. In eastern Europe, serfdom stayed in place and even grew stricter (see 1.10). Remember this continuity; change was real but uneven.

In the putting-out system, also called cottage industry, a merchant delivered raw materials like wool or flax to rural households. Families spun and wove at home, and the merchant collected the finished cloth, paid them by the piece and sold it. This let merchants avoid town guilds, which controlled prices and quality, and tap cheap rural labor in the off-season. Over time, work and trade slipped free of many such guild and local rules.

Whole families worked, including women and children, which gave rural households extra cash. Historians call this proto-industrialization because it built up markets, capital and a workforce before factories. It is one of the roots of the Industrial Revolution (see 6.1).

Historian Jan de Vries described an industrious revolution: families worked longer and sold more of their labor so they could buy goods like sugar, tea, cloth and dishes. Rising demand from ordinary households helped drive economic growth.

The Dutch led early improvements, draining wetlands and growing fodder crops. English landowners adopted and spread them.

• Crop rotation: instead of leaving a third of the land fallow (unplanted) each year, farmers rotated crops. The Norfolk four-course system cycled wheat, turnips, barley and clover. Clover restored nitrogen to the soil, and turnips and clover fed livestock over winter.
• More livestock meant more manure, which fertilized fields, and more meat and dairy.
• Charles Townshend promoted turnips; Jethro Tull's seed drill (1701) planted seeds in neat rows; Robert Bakewell bred bigger sheep and cattle.
• New crops: potatoes and maize from the Americas fed people and animals.
• Enclosure: landowners fenced in open fields and common lands. Many enclosures came through acts of Parliament, especially after 1750. Enclosed farms were more efficient, but poor villagers lost grazing rights and many left for wage work or towns.

The Bank of England (1694) was founded to lend money to the government for war against France. Backed by Parliament, it let Britain borrow at lower interest than its rivals. Insurance grew too; Lloyd's of London began in a coffeehouse where merchants insured ships. Stock exchanges in Amsterdam and London traded shares. Secure property rights mattered too: once Parliament controlled the crown after 1689, British rulers could not easily seize property or cancel debts, so people were more willing to lend and invest.

Speculation could go wrong. In 1720 both the South Sea Bubble in Britain and John Law's Mississippi scheme in France collapsed after share prices soared far beyond any real value, ruining many investors.