Origin Story: A Big History of Everything

by David Christian

The steep gradients of wealth and information in the first global-exchange networks opened such vast commercial opportunities for European merchants and entrepreneurs that their wealth and political influence increased until even emperors, such as the Holy Roman emperor Charles V, began to borrow from merchants. European rulers were generally keener to work with merchants than traditional rulers such as the Ming emperors of China had been because most European states had modest resources, fought endless wars, and were constantly short of cash. And rulers who borrowed from merchants were naturally eager to support commerce. In this way, there emerged a close symbiotic relationship between European traders and rulers. Rulers protected and supported commerce, and in return they got the right to tax and profit from commercial wealth. This was the earliest and crudest form of capitalism, a system admired by European economists from Adam Smith to Karl Marx.