In attempting to understanding the ideas and institutions of the period of history that is usually called the “Middle Ages” it must be kept in mind that this covers a time frame that easily is divided up into smaller periods, each of which can be seen to have its own unique characteristics and qualities.

Furthermore, each part of Europe had its own historical development in terms of traditions and customs.  Only one institution encompassed the entire European world through most of this time – the Catholic Church.

The Middle Ages is usually defined as beginning with the fall of the Roman Empire in A.D. 476, to invading Germanic tribes.  The “close” of the Middle Ages is commonly said to be around 1500. After this date momentous changes occurred in European history that transformed the face of European society, and the development of the whole world, as well. Fifteen hundred was the eve of the Great Religious Reformation known as Protestantism. It marks the beginning of the “discovery” of the “New World” by Christopher Columbus in 1492 and a sea route around Africa to India in 1498.

Shortly after 1500, the compass came into use, which radically changed the ability to travel vast distances out of sight of land and without dependence on clear skies to “read” the stars. It saw the introduction of gunpowder, which transformed warfare. And it was the start of intellectual forces that eventually resulted in the Age of Reason and the Age of Enlightenment in the eighteenth century.

Rural Life and the Self-Sufficiency of the Manorial System

In the United States, today, less that 3 percent of the labor force works in farming or farming-related occupations, plus this small percentage of the American work force feeds the most of the population of the country with much left over to export to feed other parts of the world.

This is in stark contrast to life in the Middle Ages. It has been estimated that between 80 percent to 90 percent of Europe’s population lived on the land and devoted all their time to the production of food. The remaining 10 percent to 20 percent of the population was either following various small and relatively simple trades and crafts in the towns, or provided personal services to the nobility, or were members of the Catholic Church and, therefore, ministering to the religious needs of the people.

Agriculture throughout most of Medieval Europe was organized around the Manorial System. The local social units revolved around “the Manor,” or residence of the “Lord,” who both owned all the land and ruled over its use and the people on it, through possessing a high degree of power and legitimacy.

The German sociologist, Franz Oppenheimer, in his book, The State (1915) and the American economist, Mancur Olson, in Power and Prosperity (2000), both argued that the modern State emerged out of the conquest of a territory by marauding bands who decide to permanently settle down and rule over those they had conquered and plundered. The State became the political institutional structure that provided legitimacy to the conquering bands by rationalizing their rule as not just an on-going extortion racket for their own enrichment, but as beneficial to the ruled and plundered due to the conqueror providing them with law and order, and some useful infrastructure projects.

Each manor ultimately served as a mostly self-sufficient economic entity, in which all production for the local members was performed. Besides growing their own food, the manors raised livestock, milled their own grain for bread, spun thread to make their own clothing, and produced and maintained most of their own farm and manufacturing implements.

The manors contained within themselves three characteristics: They were unified political and economic activities in one institution; they extensively used forced labor for the performance of many tasks and duties; they were extremely self-sufficient.

The Manorial System was part of the wider Feudal Order. Feudalism represented a system in which the occupants and users of the land lived and worked on it were not the owners; they were “tenants” of the “sovereign” – the Lord of the Manor – who legitimized his authority by claiming to offer protection to the occupants in the form of military service.

The distinguishing aspect of the Lord of the Manor was that he was political leader and economic employer, and the two roles were not considered separate. As the French historian, Marc Bloch, explained in his book, The Feudal Society (1939)

The lord did not merely draw from his peasants valuable revenues and an equally valuable labor force. Not only was he rentier of the soil and beneficiary of the services; he was also a judge, often – if he did his duty – protector, and always a chief, whom apart from any more binding and more personal tie, to whom those who ‘held’ their land from him or lived on his land were bound, by a very general but very real obligation, to help and obey.

Thus, the seigneurie was not simply an economic enterprise by which profits accumulated in a strong man’s hands. It was also a unit of authority, in the widest sense of the word; for the powers of the chief were not confined, as in principle they are in capitalist enterprises, to work done on his ‘business premises,’ but affected a man’s whole life and acted concurrently with, or even in place of, the power of the state and the family.

Like all higher organized social cells, the seigneurie had its own law, as a rule customary, which determined the relations of the subjects with the lord and defined precisely the limits of the little group on which these traditional rules were binding.

The second element of the Manorial System was compulsory labor. The villeins, or serfs, who were occupants on the land, were given the right to cultivate some of the Lord’s land for their own benefit in exchange for their labor in tilling the remainder of the land for the benefit of the Feudal Lord.

The villeins also paid various dues in the form of money (from portions of the crops they grew on the land they were permitted to use for their own purposes, and which they sold in the local towns and villages), and other in-kind services, such as compulsory road building and maintenance at certain times of the year.

Regimented Quality of Manor Life

From morning to night the tenants were watched, supervised, reprimanded, and ordered to do various tasks. They had to work the Lord’s land; they needed to do a certain amount of field work each day, including caring for the Lord’s livestock (cows, horses, chickens, pigs, etc.), making sure the Lord’s land was properly manured, and maintaining and repairing the tools and implements owned by the Lord.

Only when all of this work had been done, were they allowed to, then, work their personal plots of land for their own family purposes. They were closely watched and supervised, since their own self-interest was to finish their work on the Lord’s land as quickly as possible to get to work on their own plots of land from which they personally benefited.  Explained Marc Bloch:

To this Lord, as they called him, the cultivators of the soil owed, first, a more or less important part of their time; days of agricultural labor devoted to the cultivation of the fields, meadows, and vineyards of his demense [estate]; carting and carrying services; and sometimes services as builders and craftsmen.

Further, they were obliged to divert to his use a considerable part of their own harvests, sometimes in the form of rents and sometimes by means of taxes in money, and preliminary exchange of produce for money being in this case their own affair.

The very fields that they cultivated were not held to be theirs in full ownership, nor was their community – at least in most cases – the full owner of those lands over which common rights were exercised.

But were said to be ‘held’ by the Lord, which means that as landowner he had a superior right over them, recognized by dues to him, and capable in certain circumstances of overriding the concurrent rights of the individual cultivators and of the community.

The villeins, or serfs, were born on the land and lived out their lives there. Few ever traveled more than 30 miles from their birthplace. If a Feudal Lord were to sell one of his manors to another Nobleman, it included not only the land, livestock, and working tools, but the serfs on the land, as well.

The only escape from serfdom on the Manor was to successfully go to and hide in one of the Medieval walled cities for one year and a day. After that, the villein, or serf, was considered a “free man.” Thus, in the Middle Ages it was said, “City air makes you free.”

Commerce and Trade in the Cities

While the manors, to a great extent, survived through a rather comprehensive system of self-sufficiency, the towns and those who resided in them acquired many of the things they needed through trade. Theirs was, therefore, an exchange and money economy.

But commerce, trade, and money exchange implies a system of property rights that permits ownership by individuals, and rules and laws of contract among the agents.

It was in the towns of the Middle Ages that there began to emerge the economic, legal, and social institutions that are essential and, indeed, the prerequisites for the development of an extensive and complex market economy.

It is in the urban areas of Medieval Europe that we see the foundations for the modern age of capitalism, with its traditions and legal protections for individual rights, private property, and the emergence of an economic order in which each participant fulfills his own wants by serving others through production and trade – and an interdependency that naturally follows with an exchange-based system of division of labor.

While the institutions of property and contract slowly emerged during this period, it would be a great error to interpret this to mean that Medieval town life in any way reflected a free market setting. If anything, it was the opposite.

Competition as we know it today did not exist, and would have been considered dangerous and an undesirable way of doing business. Prices and wages were all controlled on the basis of conceptions of “fairness” and “justice,” as conceived at the time.

And communal ownership and management of property in the towns was a common practice in a number of areas. For example, a common pasture on which the townspeople grazed their livestock; town control of the grain mill, with all those living in the town having to use the municipal facilities; often bakeries, ovens and market places would be communally owned and managed in a similar manner.

Medieval Guilds and the Regulated Economy

The real institutional mechanism for economic regulation in the Medieval towns was the “guilds.” The “guilds” were occupational associations that determined who was permitted to trade in the town, and under what terms and how the product or service was to be produced and offered on the market.

Foreign merchants were permitted to trade in a town only under special permit. Their movements were watched, they were not allowed to “under sell” the town’s merchants, and could only offer products of specified qualities and types.

Among the towns’ people, themselves, the “guilds” set:  The rules for apprenticeships – who and how many people might enter a profession or occupation each year under a “master” who was a member of a guild; the methods and materials that might be used in producing goods; the hours when businesses might be open for trade; that goods could not be withdrawn from the shelves until a certain time of the day, and only sold on the guild-controlled markets; and all prices for both products and resources were fixed within maximums and minimums above and below which were violations of the guild codes and subject to criminal prosecution.

Sir William Ashley, in An Introduction to English Economic History and Theory (1909), recounted some episodes of such regulations and how they were enforced.

In the year 1311, Thomas Lespicer of Portsmouth had brought to London six pots of Nantes lampreys [an eel-like water animal with a jawless sucking mouth]. Instead of standing with his lampreys for four days after his arrival in the open market, under the wall of St. Margaret’s Church in Bridge Street [as was required by law], he took them to the house of Hugh Malfrey, a fishmonger.  There he stowed them away, and sold them a couple of days after to Malfrey, and without bringing them to market at all.

They were brought before the mayor and alderman, confessed their guilt, and were forgiven; Thomas gave an oath that henceforth he would always sell lampreys at the proper place only, and Hugh that he would always tell strangers where they ought to take their lampreys . . .

[In the year 1364] John-at-Wood, a baker, was charged before the common sergeant with the following offense: “Whereas one Robert de Cawode had two quarters of wheat for sale in common market on the pavement within Newgate, he, the said, John, cunningly and by secret words whispering in his ear, fraudulently withdrew Cawode out of of the common market; and then they went together into the Church of the Friars Minor, and then John bought the two quarters [of wheat] at 15.5 pence per bushel, being 2.5 pence over the common selling price at the time in that market, to the loss and great deceit of the common people, and to the increase of the dearness of corn.

At-Wood denied the offense  . . . Thereupon, a jury of the venue of Newgate was empanelled, who gave a verdict that At-Wood had not only thus bought the corn [wheat], but had afterwards returned to the market, and boasted of his misdoing; this he said and did to increase the dearness of corn.

Accordingly, he was sentenced to be put into the pillory for three hours, and one of the sheriffs was directed to see the sentence executed and proclamation made of the cause of the offense’.

The rationale for the guilds and their rules and regulations of prices, production, and entry into professions and occupations and trades was, they said, to maintain reasonable prices for customers and minimum qualities of the goods offered to them in the market place.

In fact, the guilds served as a legalized avenue for the monopolization of trade within crafts and professions. It also was a retarding influence on any improvements in the qualities of goods, or in the varieties of commodities offered on the market. And a disincentive on the part of craftsmen and professionals to try to lower their costs of production and increase their revenues by offering their goods at reduced and more attractive prices.

All such behavior – quality improvements, increased variety, lower selling prices – were declared to be “unjust” and “unfair” trading practices that would harm all the “honest” men in the various lines of production and trade. Such market conduct, it was claimed, would destabilize markets, disrupt traditional standards of doing business and harm both producers and consumers in the long run. It was better to control and limit supply, methods of production, and prices and wages to customary paths, it was to assure “continuity” to town and commercial life.

“Free Fairs” an Avenue to a Freer Markets

It would be incorrect to suggest that there were no opportunities or avenues for experimentation in trade. The most successful of these avenues was the Medieval Fair. A trade fair usually required the permission of the king, and was most frequently bestowed upon on a local Lord or a church dignitary, who would act as the “sponsor” for the event.

They were frequently held at the crossroads of famous and much traveled trading routes, and were often where towns were founded that later became famous cities.

Their times were selected to coincide with religious festivals or other holidays that would attract large gatherings of people. And they might last for a few days or up to six weeks. The more successful and prominent fairs became national or international institutions throughout Europe, attracting merchants and tradesmen from all parts of the continent. Besides business, the fairs also served as occasions for social diversion and merry-making, with sideshows, wild animals, dancing bears, magicians, musicians, and “freaks.”

The duke or bishop hosting the fair would try to promote its success by arranging that the merchants, dealers, and tradesmen traveling to the fair would be exempt from the usual taxes, tolls, and trading regulations and restrictions while these individuals were at the fair. The noble or religious sponsor did so for personal gain – they received special fees and taxes from the participating merchants and tradesmen.

The relatively free trade environment that surrounded the events resulted in them coming to be called “free fairs.” This system of trading fairs came to have two important functions:

First, they acted as a medium through which the different parts of Europe could have regular, though infrequent, contact with each other, and be made familiar with the types and qualities of goods and their methods of manufacture;

Second, it introduced conceptions of rules of commerce, contract, and property rights in an institutional setting in which the gains from exchange demonstrated the enhanced opportunities for mutual benefit and profit when regulations, tolls, and taxes did not rigidly hamper the free flow of men and goods. People began to learn the lessons offered from a practice of freer trade.

In summary: political, social, and economic life in the Middle Ages revolved around two sets of institutions:

The Manorial System in the countryside, where life was relatively one of self-sufficient existence in which the vast majority of the material necessities of life were cultivated, produced, manufactured, and used with the confines of the respective estates of the Lords of the Manors, with the Lords having control over virtually all political and economic life.

The Guild System in the towns, which were the location of trade, manufacturing, crafts, and specializations of various sorts, and which were traded with the people on the Manors for much of the food and related agricultural items that the townspeople needed.

Even with emerging appreciation and recognition of property rights and legal contract relationships for commerce and exchange in the towns, the economic system was one of strict regulation of prices, production, and employment through the craft and professional guilds.

The structure of the Manorial and Guild Systems also meant that the economic focus, the political loyalties, and social relationships tended to be limited to extremely narrow geographical confines. Little attention and few political or economic ties connected the various parts of Europe for the most part during this long period of history – other than the periodic “Free Fairs.”

The following two tabs change content below.
Dr. Richard M. Ebeling is the recently appointed BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel. He was formerly professor of Economics at Northwood University, president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).

Radicals for Capitalism

Subscribe to the Capitalism Network's free email newsletter.

You have Successfully Subscribed!