The Medieval Origins of Capitalism

I've never been a huge fan of economics.  In my opinion, the difference between most economic theories and practices is predominantly one of semantics.  In the end, all systems of exchange can be reduced to their common denominator: the rich get richer while the poor get poorer. No one system is really all that preferable to another (in my opinion). With that said, studying the history and evolution of economics does help to shed light on the changes and advances that have been made in society, and the efforts to even the playing field for all of humanity.

And when it comes to the study of economics, no system is more important to the modern Western world than capitalism.  For many Americans, capitalism is every bit as important of a component to the founding of their nation as is the Declaration of Independence or the Constitution (even though the Founding Fathers never really put capitalism on their radar).  And though there is much to say for the more modern conceptualizations of capitalism (i.e. Adam Smith, Max Weber, etc.) the original origins of capitalism hail back to a time before the "New World" had even been discovered.  

The world that was 14th century Europe was a world in constant flux.  Severe political, religious, social, economic and health problems plagued (literally) the landscape.  These mitigating factors brought with them sweeping tides of change that helped to redefine European society.  For instance, the Black Death, along with the Great Famine of 1315-1317, had ravaged the countryside, claiming at least 1/3 of the populace in the process.  The massive loss of laborers caused a dramatic change to the Manorial and Feudal systems in almost all of Europe.  This lack of laborers created new opportunities for the peasantry to move about and benefit from additional markets.  In addition, the development of newer agricultural technologies revitalized the markets of a suffering Europe.  Eventually, the emergence of Calvinist doctrines, particularly regarding worldly success as a symbol of God's favor, encouraged further growth, all of which gave rise to the earliest embryonic form of capitalism known as Mercantilism.   Needless to say, these advances fit nicely with the discovery of the "New World" in the following century, and eventually evolved to become a staple in the Western world. 

Of course, I am not suggesting that our modern understanding of capitalism existed in the Middle Ages.  Far from it.  But it is fair to say that an infant form of the system was beginning to emerge during the middle part of the 14th century.  Improvements in naval travel helped to augment the trade markets to and from Europe, and increased the demand for goods.  As a result, an emerging class of specialized laborers found themselves having access to a measure of wealth that had never before existed under feudalism.   Skeptics will, of course, point out that improvements in trade and the emergence of new markets don't necessarily equate to capitalism and they are right.  But there is a large body of evidence for commercial activity in the Middle Ages, and particularly in the Mediterranean, which deserves to be recognized for its enterprise and sophistication.  Mediterranean, and particularly Italian, merchants traded in high-value luxury goods, like spices, gems, dyes, and exotic metalwork. And although goods like these had circulated the seas for centuries, the volume and value of this trade increased dramatically in the wake of the struggles of the 14th century.  And it is very unlikely that such an expansion would have occurred under the old systems of manorialism and feudalism, which insisted on being self-reliant and relatively localized in scope.  Therefore, the expansion that took place in the 14th century should be seen as the result of the many social and economic changes that had taken place.

As you can see in the map above, European and Middle Eastern traders were active across a wide swathe of the Mediterranean world. To this end, the major Italian cities established trading colonies, to protect their interests abroad and monopolize the sources of desirable goods. These cities included, Amalfi, Naples, Genoa, and of course, Venice. The merchant-imperialism of these cities went hand in hand with the complex ways of investing and launching trading missions organised by the merchants themselves.  In addition, it was this expansive trade system that eventually allowed Arabian literature, architecture, mathematics, etc. to make their way into the European heartland, thus helping to ignite the Renaissance.  It's not a stretch to suggest that without these advances, Europe may never have had its De Vinci.

 In conclusion, what we can glean from the history and origins of capitalism (or any other economic system for that matter) is that it didn't come into existence overnight.  It took a great deal of time to evolve into what we have today, and frankly, it's still evolving.  Economic systems are static, unchangeable concepts, but rather are fluid and ever-changing.  This is certainly the case with capitalism.  From its birth in the Middle Ages to its existence today as the predominant means of exchange in the Western World today, capitalism has had a long and interesting history.  Will it last?  I have no idea.  As I said at the beginning of this post, I don't believe there is all that much difference between rival economic systems to begin with, but then again, I never lived in Feudal Europe.