European History Pt. 4 — Early Capitalism

Last time, we were looking at some of the economic changes that came with the discovery of the new world.

The book I’m working with only sketches these developments, and when economics is concerned, such a sketch makes it very hard to take away concrete lessons.

Some things stood out though.

1. The putting out system that began in the 1400s was an interesting precursor to subcontracting and more industrial production methods. It also involved an early free-trade dispute. The towns and guilds were restrictive about the spinning and weaving of wool. As a result, England exported raw wool to Flanders who sent it back dyed, spun, and woven. English entrepreneurs dodged these towns and guilds by setting up peasants outside of towns with looms. They “put out” the wool to the peasants. This was an early instance of using peasants and farmers as a flexible labor force.

2. Capital movement was not smooth. Up until 1640 (!), a loan with interest was criticized as usury. Of course well before this, people began making exceptions for “legitimate return” and since capital was more and more gonig to finance projects of public use rather than to finance the habits of the clergy (for example), resistance to the practice crumbled. This just goes to show you how recently human history invented and accepted the idea of a capital system of banks that we have today (and which has given us considerable trouble as of late).

3. Merchants were the winning class in this economic period. I talked about their role from an economic theory perspective here.

4. Government had a huge role in creating modern capitalism as we know it. It was governments who first ordered lots of guns, which spurred the first attempts at mass production, and they financed mercantilist ventures in their own countries. The English Poor Laws were designed to relieve poverty but they also compelled labor. Tariff systems multiplied at this time, as did trade concessions all over the globe, in the new world, and with the Turks.

5. Peasants were better off because the price of agricultural products went up, and since their manorial dues to their lords were denominated in money amounts, it took much less of their product to meet those sums.

Changing Social Structures

Switching from the economic to the social, the book I’m reading tries to get a little bit of the zeitgeist of these times (~1500-1648).

The story I came away with from these sections was about the middle class and how it diversified at this time. Town officials, merchants, ship owners, professions like doctors and lawyers, and the clergy were all middle class. This was especially true for protestants who allowed marriage. The sons and daughters of protestant religious figures helped populate the middle class.

As the middle class rose in prominence, so did the need for education of all kinds. Colleges and universities sprouted up all over Europe at this time.




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