In the eighteenth century British merchants outdistanced their old trading rivals, the Dutch, and gradually took the lead over their new competitors, the French. Judged by the touchstones of mercantilism—commerce, colonies, and sea power—Britain was the strongest state in Europe.
The Old Regimes
Britain and France were the dominant European powers of the eighteenth century.
At the beginning of the century Spain was still powerful, though it would decline throughout the century.
The Dutch remained prosperous, while the once-powerful Swedes declined even further. Economic change was the touchstone.
By increasing productivity and at the same time releasing part of the farm labor force for other work, the revolution in agriculture contributed to that in industry. Industry also required raw materials, markets, and capital to finance the building and equipping of factories. Thus the prosperity of commerce also nourished the growth of industry.
The agricultural revolution—the second force transforming the modern economy—centered on improvements that enabled fewer farmers to produce more crops. The Netherlands were the leaders, producing the highest yields per acre while also pioneering in the culture of new crops like the potato, the turnip, and clover.
Many of the basic institutions of European business life had developed before 1715—banks and insurance firms in the Renaissance, for example, and chartered trading companies in the sixteenth century.
Mercantilism had matured in the Spain of Philip II, in the France of Louis XIV and Colbert, and in Britain between 1651 and the early eighteenth century. The steady growth of seaborne trade, stimulated by an increasing population and a rising demand for food and goods, was a main force in quickening the pace of commerce.
The changes that undermined the Old Regime were most evident in western Europe. They were in some respects economic revolutions.
In the eighteenth century the pace of economic change was slower than it would be in the nineteenth or twentieth, and it provided less drama than such political upheavals as the American and French revolutions.
Yet in the long run the consequences of the economic “revolutions” were fully as revolutionary as were the political and social ones of 1776 and 1789.