Video Lesson

Lesson Objectives

After learning this lesson, you will be able to:

• examine the developments that led to the emergence of early capitalist relations;
• appreciate the importance of early capitalist relations to the modern world.

Brainstorming Question

• In what ways does commerce affect urban life in your locality?
• What is its contribution for the development of that particular urban center?

Key terms and Concepts

During the period from 1000 AD to 1500 AD, Europe experienced both economic development and setbacks. The emergence of capitalist relations accelerated, particularly after 1500 AD. The economy initially suffered a decline in the 14th century due to the Hundred Years’ War between England and France, which disrupted trade and weakened both nations’ economies. Concurrently, widespread peasant rebellions protested oppression, while urban workers clashed with wealthy merchants. The devastating Black Death pandemic from 1347 to 1352 further exacerbated Europe’s woes, killing a significant portion of the population. However, economic revival began in the late 15th century with increased trade and urban growth, leading to the rise of new social classes such as merchants, bankers, and professionals. These developments fostered the accumulation of capital and the establishment of modern financial institutions like banks, though full legal equality for all citizens in Europe would only be achieved after the French Revolution in 1789.

Development of Towns and Long-Distance Trade

Between approximately 1000 and 1300 AD, towns and cities across Europe experienced significant growth in size and number, fueled by expanding long-distance and local trade. Urban centers became hubs where capitalist relations developed rapidly, particularly through trade conducted by merchants. Towns varied in size, with the smallest having 500-2000 inhabitants, larger centers ranging from 2000-10,000 people, and great cities like Venice and Paris potentially reaching 100,000 inhabitants. These urban areas served as economic focal points, functioning as markets for goods exchange—where rural areas supplied food and towns exported manufactured products. Larger urban centers engaged in extensive long-distance trade, extending beyond European borders into Muslim lands of the Mediterranean. Within towns, manufactories operated in small craft workshops, producing goods dominated by merchant capitalists organized into guilds. Many craft workers became wage laborers under these merchant capitalists, and certain towns developed renowned industrial specialties, such as Flanders’ luxury woolen cloth in Belgium.

During the medieval period, towns and cities in Europe evolved into multifaceted centers of administration, commerce, religion, and culture. They served as hubs for local governance by feudal lords or royal officials, and were often religious centers overseen by archbishops and bishops. Many urban areas boasted renowned churches, monasteries, and universities, attracting pilgrims and scholars alike. As the money economy grew, Italian cities saw the emergence of banks and wealthy merchants who lent money at interest, facilitating trade across Europe. Wealthier towns gained autonomy through payments to feudal lords or through struggles for independence, with some like Venice becoming powerful city republics. In Germany, important cities operated as “free cities” under the German Emperor, managing their affairs independently. Cities were fortified with walls for defense and taxation purposes, and their administration was typically controlled by the bourgeoisie—wealthy merchants who engaged in profitable long-distance trade, especially in luxury goods like silk and spices from the Middle East traded through ports like those in the eastern Mediterranean.