Elizabeth I: Economy - Prosperity & Depression (AQA A Level History: Component 1: Breadth study): Revision Note

Summary

• England's economy was built on the cloth trade, which dominated exports throughout the reign but remained vulnerable to war and diplomatic disruption

• The Antwerp Crisis of 1563–1564 forced English merchants to find new markets

• Crown income rose by roughly 50% between 1558 and 1603, roughly kept pace with inflation in peacetime but far short of what was needed to fund prolonged war with Spain

• The 1590s brought the worst economic conditions of the reign

  • Four successive harvest failures pushed prices up by over a third, and real wages fell to their lowest point since the Black Death

• By the 1590s, Elizabeth was spending close to twice her annual revenue in wartime, resorting to land sales and monopolies that weakened the Crown's long-term finances

• Historians debate how much the economy truly developed:

  • Trade grew and diversified, but inflation outpaced wages throughout and ordinary people were no better off in real terms by 1603 than in 1558

Prosperity in the Elizabethan Era: The Growth of the Cloth Trade

England's economy at the start of the reign

• Elizabeth inherited a difficult economic situation in 1558

  • Mary's reign had left serious financial problems: debased coinage, expensive wars and a trade crisis

  • England's population was rising rapidly, putting pressure on food supplies, land and wages

  • Inflation had run throughout the mid-Tudor period and continued to rise under Elizabeth

The cloth trade

• The cloth trade was the foundation of England's commercial prosperity

  • Woollen cloth accounted for around 80–90% of England's exports by value

  • England produced vast quantities of undyed and unfinished cloth for sale abroad

  • The Merchant Adventurers held a monopoly over the export of this cloth

  • Before the 1560s, virtually all English cloth was sold through Antwerp

• Antwerp was the commercial hub of northern Europe

  • English cloth arrived there unfinished and was dyed and sold on across Europe

  • English merchants brought back luxury goods: spices, silks and other Mediterranean produce

  • This dependence on a single market made England very vulnerable to disruption in the Netherlands

The Antwerp Crisis and its consequences

• The Antwerp Crisis of 1563–1564 was the most serious economic shock of the early reign

  • Philip II imposed restrictions on English cloth imports to the Netherlands in 1563, triggering a sharp trade crisis

  • The Merchant Adventurers had to find alternative markets almost overnight

    • They eventually relocated to Emden, then Hamburg, as their main base of operations

• New markets gradually replaced Antwerp over the following decades

  • English cloth found buyers in Russia, the Baltic, the Mediterranean and Asia

  • New joint-stock companies managed these new trading routes (see the Trade and Commerce revision note for full details)

Crown finances

• Elizabeth faced persistent financial pressure throughout her reign

  • Inflation meant the costs of government rose steadily while traditional revenues stayed relatively flat

  • The prices of goods the government consumed, such as iron for shipbuilding and provisions for armies, all rose

• Between 1558 and 1603, royal income grew by approximately 50%

  • This was just enough to keep pace with inflation in peacetime

  • It was nowhere near enough to fund prolonged war with Spain after 1585

• Elizabeth raised revenues through several sources

  • The Book of Rates, revised in 1558 (at the end of Mary's reign), increased customs duties on cloth exports

  • First fruits: a revived tax on the first year’s income of clergy (originally taken by the papacy), provided the Crown with revenue from Church appointments

  • Parliamentary subsidies were voted in wartime

    • Elizabeth relied on these increasingly from 1585 onwards

  • The sale of Crown lands raised short-term cash

    • But deprived later monarchs of regular income

  • Monopolies were licences granting individuals exclusive rights to produce or sell certain goods

London and growing prosperity

• London grew significantly as a commercial centre throughout the reign

  • By 1600, London had become by far the largest city in England and a major European commercial centre

  • London generated a large share of the Crown's customs revenue

  • A growing merchant class built wealth through trade, with some buying land and joining the gentry

• For those at the top of society, the reign brought real material gains

  • The gentry built or extended country houses, reflecting their growing wealth

  • New goods such as tobacco, sugar and spices began appearing among wealthier households

  • For ordinary labourers, rising prices eroded any gains from growth in trade

Economic Depression in the 1590s: Bad Harvests, Plague & Rising Prices

Inflation throughout the reign

• Prices rose throughout the whole of Elizabeth's reign, not just in the 1590s

  • Prices rose by around 400% across the Tudor period as a whole

  • Wages did not keep pace; real wages fell consistently from the 1520s onwards

  • The poorest in society were hit hardest at every stage

• Several long-term factors drove this inflation

  • Population growth from around 2.5 million in 1520 to around 4 million by 1600 put pressure on food supplies

  • Earlier debasement under Henry VIII and Edward VI had contributed to inflation, although recoinage in the 1550s began to stabilise the currency

    • The price rises from this still lingered into the start of Elizabeth's reign

  • Silver flooding into European markets from Spanish mines in the Americas kept prices rising

  • Landowners shifting from arable farming to sheep pasture (enclosure) reduced food production and pushed prices up further

The 1590s depression

• The 1590s brought the worst economic conditions of the reign

  • The decade began with good harvests, but 1594–1597 saw four successive serious crop failures

  • Agricultural prices rose by over a third over the decade

  • Real wages fell to their lowest levels since the Black Death

  • Many parish registers for the 1590s show far more burials than baptisms

• While plague temporarily reduced population pressure, its impact was short-term and did not reverse the long-term trend of population growth

  • A serious epidemic in 1592–1593 killed thousands and continued to hit urban and rural populations

  • Disease compounded food shortages and reduced the workforce available for harvest and trade

• The war with Spain added severe financial pressure from 1585

  • The loss of legitimate trade with Spain removed a major market for English cloth

  • By the 1590s, in wartime, Elizabeth was spending close to twice her annual revenue

  • Parliamentary subsidies were demanded more frequently and resented more strongly

• Food riots reflected genuine popular desperation

  • Riots broke out in London, the south-east and East Anglia in 1595–1597

  • Merchants hoarding grain were a particular target

  • Local authorities and the Privy Council responded by regulating food prices and distribution

• The severity of the depression varied by region and should not be overstated

  • The impact of the depression varied across England, with some regions experiencing more severe hardship than others

  • In comparative terms, the 1590s were not as severe as crises in the 1550s or 1630s

  • The government's responses, including the regulation of food markets, were better co-ordinated than elsewhere in Europe

  • But, for the poorest, the suffering was real, severe and sustained

How Much Did England’s Economy Develop under Elizabeth?

• Use the specific evidence below to build and support your argument

The case that England's economy developed under Elizabeth

• The cloth trade expanded and adapted to new markets

  • New trading routes to Russia, the Baltic and the Mediterranean replaced dependence on a single market

  • The Merchant Adventurers adapted and continued to drive cloth exports throughout the reign

• Crown income grew and Elizabeth developed new revenue sources

  • Royal income increased by around 50% between 1558 and 1603

  • The Book of Rates improved customs revenue from cloth exports

  • Elizabeth managed to avoid bankruptcy despite the enormous costs of war with Spain

• London grew into a major European commercial centre

  • The merchant class expanded and diversified, with wealth enabling some merchants to buy land and enter the gentry

• Greater political and religious stability after 1559 created conditions for trade to grow

  • The avoidance of expensive continental wars in the early reign allowed commerce to develop

  • The religious settlement reduced the domestic instability that had characterised the 1540s and 1550s

The case that economic development was limited

• Inflation outpaced wages throughout the entire reign

  • Prices rose by around 400 per cent across the Tudor period

  • Real wages fell consistently; ordinary people were poorer in real terms by 1603 than in 1558

  • The benefits of growth accumulated with the gentry and merchants, not with the labouring poor

• The cloth trade remained vulnerable to disruption

  • The Antwerp crisis of 1563–1564 was a serious shock that took years to recover from

  • War with Spain from 1585 cut off another major market and raised the costs of trade

• The 1590s depression was severe

  • Four harvest failures in four years pushed prices up by over a third

  • Real wages reached their lowest point since the Black Death

  • The Crown was spending around twice its revenues by the end of the reign

• Crown finances were left in a weakened state by the end of the reign

  • Sales of Crown land provided short-term income but damaged long-term royal finances

  • Reliance on parliamentary subsidies created political tension, as seen in the 1601 monopolies debate

• The structural problems of the economy were never solved

  • Population growth and inflation were beyond the government’s control or reach

  • The fundamental problem of wages lagging behind prices persisted into the 17th century