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Lectures for A Medieval Survey
Lynn H. Nelson
THE RISE OF CAPITALISM
ca. 1300 - 1500
The basic medieval manufacturing organization was the traditional shop -- a master and wife, a couple of employees, and a couple of children learning the trade. The master bought his raw materials, fabricated his product, and sold it retail. The shop was residence, dormitory, workshop,ware-house, and retail store. The masters of a given trade in a particular location united into a guild. The guild served many functions:
The guild system non-competitive and adapted to an expanding economy. After 1250, economic expansion slowed and the guilds had to face new conditions. The reaction of the masters of many guilds were
These steps were insufficient in the long run. The guild system was designed to be cooperative rather than competitive. Any desire for efficiency and profit was balanced by the acceptance of the goal of a stable economy and concern for the common good. A significant portion of the profits of the guilds was diverted to providing social services, but the major limitation of the system was that it was based upon a number of small businesses and thus could not develop any efficiency of size. Although the guilds could pool capital, they could not permit a few individuals to accumulate enough capital to establish large and "rationally" organized enterprises.
After 1350, markets began to grow smaller, and the powerful long-distance merchants had to lower their costs in order to compete. They did so by producing their own goods, by-passing the guilds. There were two major systems of such "proto-capitalist" production.
Merchants' agents would rent the necessary equipment to peasant families, sell them raw materials, and purchase the finished product. This process was particularly common in the production of candles, clocks, pewterware, stockings, hats, but most particularly in weaving. This system continued to be common until the end of the 19th century.
The merchants would concentrate equipment in a warehouse ("factory"), acquire raw materials from their own farms or through agents, hire workers for wages only, ignore any production quotas, and compete rather than co-operate. This system was used primarily for manufacture consisting of several steps or dealing with heavy materials. It eventually developed into the factory system characteristic of the Industrial Era and which is still prevalent in the post-Industrial age.
The manufacturing guilds fought the development of these proto-capitalist systems, but were defeated by an alliance of the merchants' and the other "great" guilds (professional groups such as doctors, druggists, lawyers, gold- and silver-smiths). Although there were class wars in many towns, the artisan guilds were unable to compete economically, and so eventually disappeared. Many guilds persisted for a long time, however, especially those in retail and small-scale service and repair. It was only with the appearance of shopping centers and "supermarkets" after World War II that butchers and bakers lost their professional status, while such groups as plumbers have managed to keep that status. The professional guilds developed into the American Medical Association, the American Bar Association, and the silver- smiths and gold-smiths became the economy's bankers.
The proto-capitalists of the later middle ages did not support civic services, so urban life deteriorated. The workers' standard of living dropped, and this reduced their ability to buy the goods they produced. The European consumer markets grew quite restricted, and this contributed to a general recession in the fifteenth century. Production was now uncontrolled, and cycles of inflation and depression became common. More production was moved to the countryside, and wealth concentrated more rapidly in ever-fewer hands.
Together with the disappearance of the manorial system in the countryside, the emergence of capitalism altered the structure of society. Peasants and middle class split into two classes, the proprietors and a proletariat, the lower levels of which merged with the pauper class. Something of the same thing was happening among the nobility, where there was an increasing gap between the squires and the magnates. The medieval structure of social classes was being replaced by the modern structure based upon economic classes.
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