The Great Divergence. European economics and institutes in XV-XVII

Preconditions: Middle Ages (400 to 1500 )
The dominant role of the Catholic Church and its dogma
Subsistence agriculture -> Internal Exchange/Sharing
Poorly centralized power of King as the Overlord
Slow pace of technological development
The prohibition of charging “interest”

Reformation or Renaissance
Secularization
Church split: the emergence Protestantism
Centralization of power
Development of Technologies and Sciences -> The Great geographic discoveries
New religious standards -> Controlled “interest”

Loan at interest: long history
“The doctrine of fair price”
- Thomas Aquinas
(Aquinas) (1225-1274)
Martin Luther (1483-1546)
and John Calvin (1509-1564)

From Peasants to Burgess
The appearance of manufactories and craft associations
Development of trade relations on all levels of supply chain
Development of shipbuilding: rebirth of caravel

The Great Developments

The Great Geographic Discoveries

What’s New in the New World

The new perception of the world

The Peace of Westphalia (1648)