The Formation of Capitalism in European History
"Pure capitalism is characterized by private ownership of resources and by reliance on markets, in which buyers and sellers come together and determine what quantities of goods and resources are sold and at what price. Here no central authority oversees production and consumption. Rather, economic decisions are coordinated by the actions of large numbers of consumers and producers, each operating in his or her own self-interest. Because property is privately owned, it can be used in whatever manner its owner chooses (Ragan and Thomas, p. 46)."
Europe had its capitalistic beginnings in the mid-seventeenth century. However, medieval Europe is characterized by the antithesis of this kind of economy. Who caused the pendulum to swing? Historians, with their tendency to generalize, often lose in the aggregate, or barely touch upon the root reformers of this era. The Northern Italians laid the foundations for the dissolution of the feudal order and the transformation of Europe into a capitalist region.
Life in medieval Europe can be characterized by sameness. That is, relative to the life expectancy of a human being, little changed from year to year. Granted, there were periods of war and civil unrest, but the society as a whole remained unchanged. If a person was born into a poor family, then he or she would remain poor with virtually no exceptions. Society was regimented from top to bottom with predetermined social status, and no room for the ambitious.
Even an individual's social contacts were largely limited to their local area. The vast majority of medieval society was engaged in agricultural endeavors. These endeavors were carried out on communal farms owned by a noble overseer. The instruments of production were simple and there was little division of labor. Production was for the immediate need of the household or village-community. Some products were taken to the local market and exchanged. Exchange was usually compulsory, in that, one was obligated to supply products and services on terms dictated by custom and law. Interregional trade, however, was limited to the point that even a poor local harvest often "meant hunger, malnutrition, and greater vulnerability to disease, and crop failure meant starvation (Birdzell and Rosenberg, pp. 39-40)."
The economic system of this era is termed feudalism. Feudalism is defined by conditioned holding of land by lords on some kind of service-tenure to the monarch. The lords were a noble class who supplied military service and council to the monarch. The lords' social status was determined by their land holdings. The lords' estates were farmed by compulsory labor, known as serfs. The lords maintained a great deal of control over the serfs. They dictated what, where and when to plant. They also operated as a judiciary force over the serfs (Hilton, pp. 34-36).
Feudalism is, thus characterized by political decentralization. The monarchs,...