EMERGENCE OF MODERN ECONOMY
The effects of the Crusades on Europe’s economy were tremendous (very large or great). Once the Europeans returned home from the Crusades bringing spices and other Asian goods, the demand for such goods soon developed. The demand for the Asian goods led to the growth of trade. As Europe’s trade with other parts of the world grew, so did trade throughout Europe. The growth of trade also increased the growth of European cities. People began moving from the manors to find new jobs in cities.
Many crossroads became busy marketplaces. Old Roman roads were repaired and once again became important highways of commerce. Commerce is the buying and selling of goods. Commerce grew as merchants stopped at major crossroads to sell their goods to the local people.
Increased trade across the Mediterranean helped European towns to grow and made the role of urban merchants more important. The arrival of the merchant class in European medieval society disrupted the previous social structure that dominated the region. Prior to the increase in commerce and the importance of trade, Europe had been run as a feudal society. When merchants began accumulating wealth through trade, they were looked at with disdain by the nobility, knights, and clergy that had previously held the majority of the wealth in society.
GROWTH OF BANKING
The emerging banking system was an important part of the development of civilization. Banking can be traced to medieval and early Renaissance Italy. The development of banking spread from northern Italy throughout the Holy Roman Empire. A need for banking began during the Crusades. Basic banking developed out of the need to make payments for supplies and equipment. Waging international war could not be accomplished without banking facilities to transfer huge sums of cash.
A money system was introduced after the Crusades due to the demand put on the production of goods. Many peasants that worked for the nobles on their fiefs (a large area of land that was ruled over by a lord in medieval times) moved to cities and towns in order to search for a better future. This left the vassals of smaller fiefs unable to pay the remaining peasants on the land for their work. As a result, vassals had to return to fighting as a knight in the service of nobles in exchange for the fees that the nobles would give.
Also, land was becoming scarce, so money became a natural substitute. With the remaining vassals, lords found it more effective to pay a vassal an annual fee. Vassals then had loyalties to more than one lord in order to receive more money, and confusion among loyalties occurred. However, feudalism was on its downfall and would soon be replaced by the money system.
As commerce grew during the Middle Ages so did the need for banking. The increased trade with merchants brought about the need for banking. Merchants became the first class of people besides the clergy to receive an education in order to become experts at handling and recording money, charting maps, and writing detailed accounts of their journeys. It was these activities that lead to the growth of banking in the Middle Ages.
The Catholic Church (which was a major influence on the economic and social structure of the day) was strongly opposed to the idea of banking because it disagreed with the idea that banks could gain interest on loans, also known as usury. People began to utilize banks nonetheless, especially after the Bubonic Plague, which resulted in a decrease of general faith in the Church.
GROWTH OF TECHNOLOGY AND AGRICULTURE
As towns and populations continued to increase so did the need for advancement in technology and agriculture. The growth increased and encouraged innovation to assist with the changing times and needs of the people.
In the Middle ages, the plow was improved and was used with a multiple oxen team for plowing. This innovation made clearing forest much faster and easier. Farmers during the Middle Ages changed from two crop rotation to a three-crop rotation. More crops could be grown as a result. As food production increased, the population of Europe grew.
Iron production played an important role in the development of medieval agriculture. The iron could be forged by local blacksmiths into parts for plows, pitchforks, shoes for horses, and the new horse harness.
In addition to the mining of iron ore, manufacturing was very important to the Middle Age. During the early to mid-Medieval Age, the textile industry was dominated by guilds, as were the other crafts. A guild was a workers' association. The main role of a guild was the regulation of its trade or craft. Citizens and foreign merchants had to sell to a guildsman (guilds), who would then resell to the citizens. Guilds are associations of people sharing a trade or craft, intended to control the quality and quantity of their production and to protect their interests. Many goods would be sold through markets. These guilds were composed of all artisans, merchants, and traders within the town.
Of the crafts, the largest was in cloth making. It is cloth making that the first industrialization occurred during the Middle Ages. By the Middle Ages, the location of textile production was usually a household where the man was the weaver and the women prepared and spun yarn for the loom. All cloth was woven by hand on a loom and the most common materials of this time period were wool, cotton, silk, and linen.
Towns
The emergence of towns in medieval Europe was directly related to the changes that the region was going through at the time. Lords began attempting to make their lands more desirable places to live and formed towns in order to attract wealthy merchants who would be able to pay higher taxes. As the taxes rose, illiterate peasants banded together to ensure that they wouldn't be cheated out of their money due to their lack of education. Charters were then established in order to reduce corruption and provide some legal assistance for the peasants.
During the Middle Ages, some towns held weekly markets where people from nearby villages could trade for food and other useful items. By the 1200s, Europe’s towns had become bustling centers of trade and industry where people came to buy and sell goods. Some became famous for their great fairs. Merchants from all over Europe brought goods to sell at these fairs.
Medieval cities were surrounded by stone walls. Inside the wall, stone public building and wooden houses were jammed close together. Candles and fireplaces were used for light and heat.
Towns could be unhealthy places. Wood and coal fires in people’s homes and shops filled the air with ashes and smoke. Sewers were open, and there was little concern for cleanliness.
City women kept house, cared for children, and managed the family’s money. Wives often helped their husbands in their trade, sometimes carrying on the trade after their husbands’ deaths.
Commerce and the Merchant Class
The arrival of the merchant class in European medieval society disrupted the previous social structure that dominated the region. Prior to the increase in commerce and the importance of trade, Europe had been run as a feudal society.
Trade encouraged townspeople to produce many different kinds of products. Craftspeople organized guilds, or business groups. Each craft had its own guild. Merchants, grocers, and shoemakers—along with many other kinds of workers—all formed guilds.
Guilds were financed by their members, who paid fees. In return, the guild protected workers and their families. If a guild worker died, the guild would pay for the worker’s funeral and often care for the worker’s family. Some guilds provided free schooling. Guilds also financed building programs.
Guilds controlled business and trade in a town. The guild set the price for a product or service. Guilds also set and enforced standards of quality for goods. They also controlled where and to whom a member could sell goods. If a guild member broke the rules of the organization, his products could be taken away, resulting in no profits for the individual merchant.
In addition, guilds decided who could join a trade. An apprentice, or trainee, learned a trade from a master artisan who provided room and board but no wages. After completing the training, the apprentice became a journeyman who worked under a master for a daily wage.
When merchants began accumulating wealth through trade, they were looked down on by the nobility, knights, and clergy that had previously held the majority of the wealth in society. Merchants eventually gained some respect from those groups. Merchants became the first class of people besides the clergy to receive an education in order to become experts at handling and recording money, charting maps, and writing detailed accounts of their journeys.