As trade grew, such modern-day business practices as banking, the borrowing of money, and bookkeeping had their beginnings. These economic developments were part of the Commercial Revolution, between 1450 and 1700. It brought great changes to ways of doing business. During the Commercial Revolution, the number and kinds of businesses increased as more and more investors looked to make big profits.
An economic system called capitalism emerged. Capitalism is a system in which businesses are owned by individual investors instead of the government. Individuals invest money in companies in the hope that the companies will make a profit. The United States and many other nations around the world today have economic systems based on capitalism.
During the Age of Exploration, capitalism grew rapidly in Europe. Many investors decided to form joint-stock companies that would send ships to Africa, the West Indies (Caribbean), and the Americas. Each investor in a joint stock company put up a share of the large sum of money needed for ships, crewmen, and supplies. It was hoped that company ships would sail to those lands and return with products worth more than had been spent on the voyage. Profits would then be shared by investors. In this way, no one risked losing a great deal of money.