Carroll Quigley - The Evolution of Civilizations

One of the chief consequences of these economic changes was the advent of a money economy. As a result of this, all relationships in society developed a tendency to become expressed in monetary terms. This was true of the relationships that each noble lord had with his vassals in the feudal system and with his serfs in the manorial system. The aid and counsel owed by the vassal in the former case, as well as the dues and services owed by the serf in the latter, were, sooner or later, transformed from obligations to pay in kind to obligations to pay in money.

Each change was made at the going rate of value, so that the nobles ceased to have fixed incomes in kind and began to have fixed incomes in money. But the steady rise in prices up to 1300 meant that the value of fixed-money incomes was steadily reduced; every year a fixed income would buy less. This rise in prices and equivalent fall in the value of money occurred because both the amount of money in circulation and the speed with which it circulated increased faster than the increase in the volume of goods available (although this was also increasing).

The reduction of noble incomes by the decreasing value of money meant that less could be saved from these incomes. Thus there was less and less available for investment. If we consider that the price level was about three times as high in 1300 as it had been at the end of the tenth century, we shall see that a noble who commuted his income into money at the earlier date would have only one-third as much real income at the later date. No one, of course, was quite this badly off, for the simple reason that no one commuted as early as the tenth century, and the later the commutation the less the loss, but by the end of the thirteenth century most nobles were being reduced to desperation. This situation was made even worse by the fact that the institutionalization of the nobility led to customary and legal restrictions on their activities that made it very difficult for them to supplement their decreasing real incomes. On the Continent generally (but not in England), they were forbidden to engage in commerce or to marry nonnoble girls. These restrictions made it impossible for the nobility to obtain access to incomes from the commercial class (as was done in England, where there were a peerage and an aristocracy but no nobility).

The result of all these noble misfortunes was that the only feasible way in which a noble could supplement his income was as a mercenary soldier or, possibly, as a royal bureaucrat. The latter was unlikely because writing and counting were not noble skills. Thus a noble was inclined to seek to supplement his income from war. This need became the basis for the imperialist wars of the Age of Conflict that began at the end of the thirteenth century. English wars against the Scots, Welsh, Irish, and French; French wars with the English, Burgundians, and others; the almost endless struggles among the princes, both lay and clerical, of Italy and Germany; all these, as well as civil struggles such as the Wars of the Roses, the struggles of the Armagnacs, or the Sicilian Vespers, helped to provide jobs for the impoverished feudal nobility.

The economic crisis that emerged from the decrease of feudal spending was delayed only briefly by the continuance of saving and investment by commercial groups. The economic life of the towns, including both commercial and crop activities, became institutionalized in the fourteenth century largely by the activities of the guilds. As demand ceased to grow, these adopted restrictive regulations, preventing admission of new workers to most activities and, under the pretext of protecting the quality of the products, curtailed output and increased prices. At the same time towns placed all kinds of restrictions (generally known as municipal mercantilism) on business activities. These included restricting commercial exchange to set times and places (the market), putting restrictions on nontownspeople in the town market, forbidding purchases for later sale in the same market, hampering or taxing export of goods from the town, and so forth. All such regulations, embodying what is technically called "a policy of provision," had a very adverse influence on technological advance for most of the fourteenth century.

The decrease in expansion arising from the growth of economic institutionalization was accelerated by a number of other factors. One of these was a fall of prices after 1300, accompanied, within a half-century, by a scarcity of labor. The fall of prices probably began with the decrease in demand arising from institutionalization, but it was greatly accelerated by the scarcity of bullion. By the year 1300 the accessible silver mines and scanty gold resources of Europe had been systematically exploited for about four centuries and most of the easily obtained bullion had been extracted. Mines were becoming exhausted or were going deeper than could be operated easily by the available technology. The problem of keeping water out of the deeper mines was rapidly becoming insoluble. The ordinary lift pumps known at the time would not take water higher than about thirty feet, since they worked by air pressure, so that depths greater than this had to be pumped out in multiple stages. Problems of ventilation and of removing ores were also rising rapidly. As a consequence, after about 1320 the annual increase in the bullion supply and thus the increase in the volume of money were less than the increase in production of goods, and the long rise in prices was reversed. Costs, particularly wages, did not fall so rapidly as prices, with the result that profit margins (price minus costs) were reduced or wiped out completely. This discouraged production. The situation was alleviated for a short time just at the middle of the fourteenth century because the outbreak of the Hundred Years' War in 1338 helped to strengthen prices, but profit margins hardly benefited at all, because the shortage of labor resulting from the onslaughts of the Black Death after 1348 raised wages. Even today, when wages constitute a smaller portion of total costs, nothing will curtail production faster or more completely than rising wages in a time of falling prices. One rather paradoxical consequence of this situation was that incomes were distributed somewhat more equitably, and the standards of living of the poorer groups frequently improved in spite of the general economic decline. This meant that aggregate incomes, as a whole, were decreasing, but the share of the total income going to the working people was rising and the share of the upper classes was falling quite rapidly. As a consequence of this, both saving and investment (which were upper-class activities) decreased even more rapidly, and the depression worsened. This economic and social crisis of the fourteenth and early fifteenth centuries is well documented in the historical records. Josiah C. Russell tells us that the British population was 1.1 million in 1086 and rose very rapidly until about 1240, then increased more slowly during the next century and achieved a peak of about 3.7 million in 1348; it then decreased to 2.23 million by 1377 and to 2.1 million in the early fifteenth century and was still at no more than 3.2 million in 1545. M. M. Postan tells us that all the towns of England, except Bristol and London, lost population from the fourteenth century to the fifteenth century. A similar pattern was being experienced on the Continent. E. Baratier and F. Raynaud report the population of Marseilles fell by at least 75 percent in the period 1263 to 1423. Similar trends have been reported from most of western and central Europe. C. M. Cipolla says that the crises of the early decades of the fourteenth century were comparable in their gravity to those that struck the modern world in 192935. In his study of Italian businessmen, Y. Renouard says that economic enterprise was replaced by warfare after 1330 as the accepted method for making one's fortune. An old work of R. Davidsohn's gives us fairly specific figures for the manufacture of woolen cloth in Florence in the fourteenth century: 100,000 pieces in 1309, only 70,000 in 1339, falling to 30,000 in 1373, and reaching 19,000 in 1382.