The Political History of the World

The European Economy


All right I bet you are all very anxious to jump into the world of the sixteenth century economy but first I want to quickly address where the podcast is going over the next couple episodes I’m sure by this point you started to ask yourself G. is the political history of the United States ever going to actually talk about you know the political history of the United States. The answer is yes we are actually coming to the end of our European survey so we have this week’s episode on the economy then next week we are going to have an episode focusing primarily on what everybody else is doing in the Americas and then we are going to be ready to go to Jamestown so if you’re wondering where all the American histories in this hang out we’ll get there shortly.

For this week that we are willing to continue our survey of Europe in the sixteenth century by turning our attention to the economic landscape. Much as it the episodes of politics and religions I plan to cover just the very basics of the economy and its structures during the sixteenth century and hopefully show you the changes that were currently. Also as of politics and religion the sixteenth century was a time of major economic change. Unlike the rapid change though that we see with religion following the reformation the changes to the economic system though are far more gradual in nature the change that we are going to talk about today are changes that realistically took place over the better part of 200 years likewise with such a long duration there really is not a central figure driving the change instead what we’re going to see is a series of events that unfold rain this time that spurred the transition from feudalism into a capitalistic society. There are several reasons why the transition took place this way in more specifically why they occurred when they did.

In this episode I’m gonna look at the system that was in place throughout Europe prior to the movement to more modern capitalistic system we are going to look at the feudal system explain why the system became increasingly unsustainable during the sixteenth century and in the time leading up to it we’re also going to look at why more capitalistic the system replace the feudal system what advantages did a capitalistic system have over the feudal system and how did the growth of the central St encourage and even require that more capitalist forms of economy takeover. Finally we’re gonna look at the concept of mercantilism and the desire of nations to hoard boycott. Concepts that we still have today such as trade deficits would emerge during this era. Moreover it is necessary to the nation to secure these critical resources that’s going to help explain why there was a drive out of necessity to explore new lands. This need is was going to push these countries to go across the ocean into the New World and is going to be the engine that drives imperialism. To start today we’re gonna look at the economic systems that were in place prior to the rise of capitalism it is the fuel economy that he come to dominate Europe in the centuries prior to the emergence of capitalism. The fuel economy rose to prominence in Europe in the time between the eighth and tenth century and the feudal system is fundamentally different than what we’re used to today our modern world view is of an economic situation that is driven by the central nation.

We discuss economics with terms such as gross domestic product a figure that looks at the total output of a particular nation this concept is born out of the year that we’re gonna be talking about today but prior to that in the future world this would not really have been I think. Prior to this point the economics of Europe were not driven by centralized economies but rather from powerful landlords who held vast amounts of land it was these landlords that held the power over taxation. This system which existed to some degree from the fall of the Roman Empire and come to prominence later in the Middle Ages so a largely agrarian system of substance farming take place. Under a feudal system you would have expected to see a number of smaller economic centers where the majority of the funds went to that local landmark. Most of the people living in this time would have been farming just enough product to sustain themselves with the remainder being given to the landlord in the form of tax. Any excess beyond that amount that’s given to the landlord and needed to sustain themselves could then be sold to non agrarian populations within the city. 

The system led to a limited merchant class which came from namely 2 groups you have the individual farmer who produced enough that they could afford to sell the excess as well as those working for the landlord himself it was either the landlord who made up the vast majority of the merchant class the system generally resulted in limited opportunities for trade and made the town the nexus of the economy. Net trade of course did exist during this time however it was much different in nature than what we think of today. Trade in a modern sense is a product of mass production and the global ease of large scale shipping. However under a feudal economy trade was focused on the movement of luxury goods not sustenance goods. What this means is that there is always going to be a limited market for trade as really only the wealthy could afford such luxury items the farmer who makes just enough food to pay his taxes and let the word of his own family was not going to have the funds to ever participate in the trade or acquire the goods being moved. This system is old the most powerful person in any given area being that individual landlord it is the landlord who is going to be the individual that the peasant is going to be responsible to is the landlord who’s collecting the taxes when it came time to raise an army it is the local landlord who’s going to be responsible for selecting who goes to war. 

The local landlords with a true center of power in the fuel economy. For a monarch trading say the eleventh century they’re going to find their authority only one as far as the landlord would allow. In this aspect much of the economy during the time before the fifteenth and sixteenth century was barter in nature by the sixteenth century things had clearly began to change as tree became more of a central part of the European economies. The question therefore becomes why what it changed I supported a move from the feudal system to a capitalist system. The beginning of the change to more capitalist system which first appeared in the fourteenth and fifteenth century during the 0 years war. With the war economy for such a long time the population of feudal France in England found themselves stretched thin. Between the existing feudal dues and now the necessity of additional taxes help fund the war the population of these countries lost the available income to engage in any trade both internationally or even on that local scale. This means that suddenly landlords and artisans were left with product that they couldn’t move this would lead to a long period of economic stagnation. With this type of stagnation landlord suddenly found the growth more difficult as more more tenants struggled under increasing pressures of higher taxation the war economy. The entire situation is further exacerbated by the issue of the population that occurred as a result of repeated outbreaks of the plague. It is this particular plague that has earned the nickname the black death and is most often when people think about when they think of plague outbreaks. The plague was spread by fleets which typically run on the back of rats. Well commerce was nowhere near where it is today there was still enough of it that the rats carrying the infected fleas were able to spread. From what we know today we believe that the operator will begin in the east and spread to the west in Europe specifically operates with star down near the coast of the Mediterranean and then spread north with time the outbreak of the 13 hundreds which touched nearly all parts of Europe.

In the 60 years of this particular outbreak at least one third of the European population died I’ve seen some estimates they showed that nearly half of the European population may have died as a result of this plague. The play touch all levels of European society royal families a clergy Bosa deaths from the outbreak and yet with the play did not discriminate it should come as no surprise that the proportion of the population that did the majority of the die was from that peasantry class. The population had a devastating effect on the feudal landlords fewer people meant the landlords with left with 2 options on the one hand the landlord could accept less from their tenets and accept the new reality. Or on the other hand hello could raise taxes on the remaining population try to get more out of those who survived. Well the reality of the situation is that the one where we’re going to be required to survive with less it did not stop them from placing additional pressures on to those peasants who survived the pressure of having a long time or kind of me as well as devastation from a result of the plague led to increasing discontent among the peasant population.

The arrest leads to a prolonged period of nearly 150 years of peasant rebellions throughout Europe. The cause of the majority of these rebellions was the exceptionally high fuel dues being impressed on those presents the Inge from these excessive Jews would boil over and the landlords were suddenly left with rebellions on their hands. The largest of these are millions with the German peasant revolt a 1524 to 1525 this is going to remain the largest popular uprising in Europe up until the French Revolution 250 years later. During the conflict the German aristocracy killed nearly a quarter of 0 peasants as they struggle to regain control. In this manner the German aristocracy did manage to suppress the revolt despite the great cost of doing so however well the peasant revolt was ultimately a failure for the peasants it didn’t exactly Michael M. ller sleep any better. 40 years before the uprising in Germany is similar uprising had occurred in Catalan an area in northern Spain. In the revolution the Katelyn Pederson’s managed to bring meaningful reform in their rebellion this is something that is likely going to remain in the minds of the European landlords as they look at their own standings and the risks involved. The results in German Catholic we’re the biggest incidents a peasant revolt during the era yet this type of revolt was hardly an isolated incident around Europe similar events have occurred in France in England and were spurred on by the same pressures. In a 100 year period from 1450 to 5050 there were at least 16 major peasant revolts in Europe and it was the anger over these high tax burdens as well as the continued practice of servitude in the pharmacy serfdom that because these peasant rebels become a popular fixture throughout the continent. Well the vast majority of these rebellions were ultimately put down by the landlord it’s not exactly the kind of problem that is going to make any landlord very happy. 

This dangerous mix of high feudal dues and depopulation from plague led to increasing pressure and rebellions among the peasant populations and further exacerbating these problems is that those being killed in the Republicans are now not available to go farm their land which leads to further de population and just keep compounding the problem. Now if you’re a sixteenth century landmark you clearly have some problems that you’re going to need to go ahead and address. Obviously you don’t want to be living in a world with ongoing rebellions rebellions are never a good thing for their landlord the landlord runs the risk of really bad things happening to them say for example a peasant mob showing up at their door with pitch forks and torches interested in airing their grievances. And even if they manage to suppress the rebellion they’re going to likely have to do so by killing the people that they depend on to pay their dues so regardless of the outcome the landlord always is going to lose. The obvious answer for the landlord is the call of the central government for help after all that’s but the central government does right. Well there’s a problem with this plan. If your if your landlord it is in your best interest to keep the small central government a think. So why do you want a small central government. Through much of the Middle Ages it is the feudal landlord who is the real king for most peasants. Sure there’s a guy on some thrown somewhere but you never really interacted with him in any kind of meaningful way.

It is the landlord who is responsible for collecting taxes collected his feudal dues hopping around a people to fight in the army and doing all those things that happen on a daily basis. It is the landlord not the king who is directly involved in the day to day activities of the peasants. And bill and would like to this way they liked having the power to control taxation and control their prison populations they thoroughly enjoy being kings over their small fiefdoms a strong central government is a direct threat to the sovereignty if you are an actual monarch you would be more than happy to curtail the power of the landlords and make it less likely that they start having thoughts about what it would be like to be the actual king so to summarize a strong central government is bad for the landlords more as a weaker central government is beneficial to those landlords. The problem for our landlords is that the peasants have reached a breaking point in that insurrections are breaking out. Well being the ruler of your own fiefdom is nice it is a whole lot less fun when that angry mob Iraq’s landlords now left with few options were in fact forced to turn to the central government for help in suppressing the rebellious rabble. Changes in military technology and tactics also we’re going to play into all of this as guns and cannons begin the process of replacing bows and swords ideas such as the infantry charge begin to appear. 

These things require a more disciplined army that was previously necessary and also requires more manpower this year is a 2 fold problem for the landlord with the necessary increasing discipline that army requires it makes far more sense to have a standing army rather than just a bunch of guys running out there with swords and armor this is going to put additional strain on landlords as they were already suffering from depopulation. With standing armies it also meant that the central state has a new and powerful tool at their disposal. Give a rebellion starts the individual landlord or a collection of landlords are now less likely going to be able to put together the force that they have to put down the insurrection. Experienced soldiers are remain in the army longer and are no longer at the disposal of the landlord in the way that they had been previously. This means that one rebellions occur the landlord is not going to be able to have the manpower necessary to quash the insurrection.

Once again this is gonna push the landlord to haven’t asked the central government for help something that spoiler alert the central government is going to be more than happy to oblige with. At the same time that this is all going on between the fifteenth and sixteenth century you enter into a period where there are particularly powerful monarchs throughout Europe. These monarchs are able to build the complex bureaucracies in this necessary to collect taxes anymore more control matter the local landlords ever were able to do. The central government taking over tax collection is a huge blow for the local landlord. It was not a great secret that manipulating the taxes of the peasantry was a pretty big financial boon to the local M. looks now suddenly the state steps then removes a large part of the individual landlords income and with it their power. With more the peasantry many reaching the central St that means that there was less of the money reaching the landlords. Okay so what does any of this have to do with the changing economic system in Europe. Well in the most simple terms a feudal economy is going to have limited trait often within a small region. 

As more powerful central states appear it is the state itself the begins participated in trade on a much larger scale often involving other countries. Trade is moving from being something that occurred on the local level to something that occurs on a national level. The other part of the story that we cannot ignore is the importance of the discovery of the Americas. By 1492 Europeans were fairly well aware of the resources that existed within Europe and the surrounding area. For instance there was an awareness of where the silver and gold mines were and the rest estimate of their yields. However with the discovery of the Americas that equation suddenly changes in a huge way. Economist Edward pero es explains the situation by stating that between 14161530 silver production couldn’t topple in central Europe despite this however demand was still outpacing the supply thus driving up the cost of silver. With the discovery of the Americas Europe suddenly had a far richer source of gold and silver that could keep up with the demand. The greater supply of further precious metals fuel even more demand though people wanted more more of these goods. This race to acquire precious metals is going to form the basis of the dominant economic thought of the day that Adam Smith is going to eventually DUP mercantilism.

The rise in gold and silver didn’t just return to Europe for hoarding though that is what happened to the majority of it which is something that we will discuss you in a moment. Large portions of gold and silver were taken to places like Asia where was traded for other luxury items like spices and jewels. These new new luxury goods then begin entering the European market place on a far greater scale than had previously been seen largely due to that new found wealth made available in the Americas. Initially at least no nation would embrace this new and evolving economy like the Portuguese what. And what a story is seldom going to involve Portugal they do provide an excellent example of why the Americas would help fuel a New World economy. Numerous sources discuss how it was Portugal that was really at the forefront of growing international trade. So why Portugal the reason why Portugal would lead the way to becoming a leader in trade can clearly be seen simply by looking at the map to the northeast Portugal is completely blocked in by Spain. To the south and west they’re bordered by an ocean. Trade in the Mediterranean has always been fraught with dangers especially considering that the narrow opening to the Mediterranean and you brought her was controlled by the Spanish. For Portugal expansion overland was all but impossible on the seas however it was a very different story.

Bush will have other advantages over its European neighbors whereas most of Europe in the fifteenth century had been embroiled in internal warfare Portugal had known relative peace this allowed the local merchant class of Portugal to flourish. It illustrates the importance of that central state to the internal stability instead of struggling with minor warring fiefdoms Portugal and its strong central St were largely free of these problems this in turn allowed the resources of the nation to be used on growing trade and expansion rather than petty warfare. For the Portuguese oversee expansion always was the logical jump being landlocked by Spain they had few other prospects of expanding into Europe. To the west however the possibilities were limitless. This is in conjunction with a strong central St keeping the peace which allows Portugal to initially jumped out as a leader in the exploration of the Americas. And will ultimately the Spanish are going to pull ahead exploration and trade were a hallmark of the Portuguese golden age. With the experience of the Portuguese really shows is that power that a strong central government gives to an expanding state these governments are more stable they are less subject to the whims of a feudal lord. And larger governments are going to allow international tree to grow any true world economy to begin to form although this is reinforced by the sudden surge of supply from the Americas. To finish this week I wanted to just a couple of minutes to discuss the concept of mercantilism.

Really capitalist systems are not the same as we know them today well first of all is the type of capitalism that today we know simply as a mercantile economy so what the heck is mercantilism. The most simple explanation of mercantilism is that is the process of gathering and hoarding bulldog. Okay so what does that mean. Well first let’s start off with answering the question what is boiled. Boban is simply precious metals namely gold and silver. In game theory mercantilism is what you would consider a 0 sum game what this means is that in every transaction there is a winner and there is a loser. The thought was that in every deal between 2 countries it was always necessary that one country one in one country lost. This idea fosters the line of thought but there are only so many limited resources to go around so for example let’s say that England has one kind of gold the benefit for the English would be 2 fold not only do they have the gold in their possession but by then having the gold it means that nobody else has that same cold. The simple way I have seen this explained is with pizza and let’s be honest here Peter explains basically everything you need to know in my life. So let’s pretend that you and 7 friends decide to buy a pizza they decide to have you get that pizza when you divide the PC you get your piece slightly bigger than everybody else’s. In a 0 sum game you’ve just one to the detriment of everybody else. Your larger slice of pizza means that everybody else is going to be forced to eat a smaller slice of pizza. When taken to the economy what results is a nation attempting to hold as much precious metals they can’t. Doing this forces the other countries who themselves want to obtain as much 0 as they can to trade for them from a position of relative disadvantage. In terms of economic policy inside the state you’re going to see mercantilism benefits as well self in several ways. The main calling card of a mercantilist economy is going to be the very high tariffs on imports.

You want to keep bullion inside the nation not traded way for foreign goods. During the colonial era you often saw the colonies act with restricted trait so for example a colony would only be allowed to send their kids back to the home nation they would not be able to engage trade directly with any foreign powers so the French colony may be restricted from trading directly with an English colony instead the size pies will be sent home to England and the home nation will contract the trade with friends directly this ensures that the central government is always in control of their internal supplies of goods and they’re not being bypassed. The system but also stressed the importance of having a surplus of trade this is a concept that we still have today in the United States every time there is a federal election one of the candidates is always going to bring up the trade deficit. Working with the mercantilist economy the nation is going to want to attempt to keep trade as one sided as possible you always want to export more than you’re importing under the system. And this is not to see the trade is not important with mercantilism as it does remain a critical component of the system however it is in the best interest of each country to limit imports as much as possible well having a high number of exports. The system would remain effect in large part up through the seventeenth and into the eighteenth century when it began to give way to a more free market form of capitalism. That is really all I’m planning to say about mercantilism it is something that’s going to come up from time to time as we discuss trade from the American colonies however it generally speaking I don’t really anticipate that we’re going to be spending a ton of time talking about the horrible yon in this podcast just wanted to get it out there make sure you guys know what was going on economically at the time. What makes this story so much different from the other subjects we’ve covered in our survey of Europe is the fact that there really isn’t that 1 watershed moment or a single person driving the narrative if you look at the reformation all roads lead back to Martin Luther and 1517. If you’re interested in the English reformation well look no for further than Henry the eighth the key moment of the English Spanish for that would be the Spanish Armada. 

Even in our first episode on exploration you have names like Columbus and the 40 nineties to turn to. In the case of the economy though that just simply doesn’t exist there is no one person that we can pinpoint who drove these changes. There is an event that caused a sudden change in the system. The changes to the economy took place over the period of hundreds of years it is a slow process of depopulation which lead to higher and higher fuel dues the inability to make these leads to peasant revolts which weakens the now nervous landlord population of Europe central governments are becoming more advanced and more ability to tax which becomes necessary to support their armies as a military modernization begins to take place with the increase bureaucracy comes a notable decline in the power of the central landlords both as an individual and as a collective the central state took that power from the landlords and as a result began to grow more. With the growing central government the town becomes less important as an individual economic node and the country itself becomes increasingly important as national economies begin to appear and flourish. Trading creases through all levels of society throughout the sixteenth century as Europe becomes increasingly more involved in importing goods from the Americas. 

Although this is combined to lead to the end of the feudal economies in the past and introduce the more modern capitalist system that we know today. There are numerous other factors that I did not bring up for conversation in this episode for instance during the same period you have a big issue with the manipulation of currency and that is going to help also I sure anymore capitalist system and I did bring it up because bluntly it’s a subject that I personally don’t feel comfortable enough to talk about and at least in the context of our story I don’t believe that it’s going to be that important of a factor at this point talk to an economic historian about the era there’s a great deal more that is going to influence the change from feudalism to capitalism. For our purposes however I think this will give you a pretty good background that you’re going to need moving forward. Everything I described our events that took a very long time to occur. In this episode we travel all the way back to the 13 hundreds and Ford well into the 16 hundreds. The reformation was off and running in a single generation but economic change takes centuries. So we discuss the changes of the sixteenth century what we’re really discussing is the humiliation of 200 years of political social and financial pressures on the economic systems manifesting themselves. The sieges don’t just stop in the sixteenth century at the time of the founding of Jamestown the economy was still very much a volley into a more modern system. Economic concepts such as mercantilism would dominate their day as the world economy will become increasingly globalized in the decades and centuries to come. Next time we are going to conclude our survey of Europe by looking at what is happening over in the Americas it has been quite awhile since we last looked at what was going on across the Atlantic and I want to give you an idea of where all the major players are located in what they’re doing on the eve of the Jamestown colony. 

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The Political History of the World