The Discovery of the American Continent: Capital Accumulation, Trade Volume and the Price Revolution in Europe

This study examines the effects of the discovery of the American continent on capital accumulation, trade volume, and price levels in Europe. The primary objective is to reveal the extent to which the influx of gold, silver, and agricultural raw materials from the New World contributed to early modern growth dynamics in Old World economies. The study aims to bring together the transformation in the volume and structure of foreign trade through the channel of capital accumulation and the price revolution debates within a common economic framework. The analysis first briefly summarises the production structure, trade networks and financial capacity of the pre-discovery European economy. It then examines the effects of precious metal flows to Europe, particularly via Spain and Portugal, following the discovery of the American continent, on public finances, commercial capital and financial markets. In this context, the relationship between mineral revenues and state borrowing, war financing, and the growth of commercial capital is discussed. Another focus of the study is the rise of Atlantic trade networks and the relative decline of the old Mediterranean-centred routes. New trade routes and changes in the composition of commodities expanded the volume of foreign trade for European states and transformed the regional and class distribution of trade. The price increases triggered by the abundance of silver disrupted the balance between wages, profits, and rent revenues, leading to a prolonged price revolution and accompanying distributional tensions. Consequently, the study argues that the discovery of the American continent was not merely a process of geographical expansion for Europe, but also a profound economic restructuring process operating through capital accumulation, trade volume, and the general price level. This finding demonstrates that Europe's rise in the global economy during the early modern period must be understood within the framework of the interaction between resources transferred from the Americas and intra-continental institutional and political dynamics.