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You should also have considered the following matters:
I would choose capitalism as the second important thing that distinguished Western Europe from the other civilizations of the Old World. Even until well into the modern era, the Turks, Indians, and Chinese could, and did, manufacture far finer rifles than the Europeans. The difference was that the Europeans manufactured millions of them. Mass production, assembly lines, interchangeable parts, and other such things were what distinguished the Europeans from the other civilizations of the world, and all of these things were a product of Capitalism.
Capitalism is one of those terms that are in common use, but that people would find it difficult to define. Basically, capital is wealth, and Capitalism can be defined as a situation in which a person owns wealth in the form of raw materials and/or the tools for processing those raw materials into marketable manufactured goods. The person sells his goods and uses the profit to obtain more raw materials and/or more tools to process that material. "But," you might say, "that describes practically every economic activity in existence. How is Capitalism different?" Capitalism differs in that the person who owns the raw materials and/or tools of production does not engage in amassing those raw materials or in using those tools but he does own -- completely and absolutely -- whatever is produced with them. The people who do the work are paid by the man who owns the materials and tools, and that's the only share of the profit that they are entitled to receive.
Karl Marx, the 19th-century historian/economist who developed the theories underlying Communism, stated the matter quite simply when he defined Capitalism as a system in which the means of production are owned and controlled by the wealthy. Marx believed that Capitalism was an unstable system, and Communism was based upon his theory that the laws governing economics were physical laws that could not be changed by human beings (remember the Realists?), and that the people who did the work but did not share in the profits -- the proletariat -- would eventually take control of the sources of raw materials and the means of production by force, and would establish a new society based upon an economy different from that of Capitalism. He believed that any human society was a reflection of the economic system it employed, and this seems like a valid observation. It means that the capitalist society that evolved in Medieval Europe made it unique in the early modern era.
Let's see how capitalism developed.
In about 1000, the rulers of Kiev had destroyed the Khazar state to the east of them and, by so doing, removed a buffer that had protected the Varangian Route of Russian rivers from the peoples of central Asia. One of these peoples, the Patchinaks (there are various spellings of this name), settled around 1000 in those lands where the Varangian rivers entered the Black Sea. The Varangian route was blocked, and merchants began once again to carry goods from the Baltic to Mediterranean markets by way of the Seine-Loire-Garonne/Rhone river routes of France. In turn, Eastern merchants in appreciable numbers began to appear once again in the West.
The western European cities of the Roman empire had been, for the most part, artificial creations established by the imperial government to centralize legal, religious, and economic activities. As the empire in the West decline, power and population began to move from the cities to the countryside. By the tenth century, many of these Roman cities had been abandoned, or had been reduced to fortresses, cathedrals, or monasteries with a nearby village, often enclosed by part of the old Roman wall. Nevertheless, they were still centers of population and generated a certain amount of traffic. The long-distance traders often found these locations convenient for breaking their journey, selling some of their goods, dividing cargo, or even trading with merchants arriving from distant parts. They often established residences and warehouses (called "factories") in the villages adjacent to the main administrative center and took the lead in restoring and extending the old Roman walls to complete the defenses of an essentially new manufacturing and commercial center. These merchants created a social life by establishing guilds, an old institution that had evolved to meet new needs. Originally religious groups that met for feasts on religious holidays, the guilds had been transformed by the merchants of the time into corporations providing their members with common defense, the opportunity to pool their capital, political action groups, and many other advantages. The merchants' guild took the lead in developing and governing these new trading settlements. Their great growth came, however, as a result of development in medieval agriculture.
Medieval farming was not organized as it is at present, with individual family farm situated in a fenced block of fields, woods, and pasture. In the year 1000, a bird's-eye view of europe would have consisted of a green sea of forest with scattered brown islands of human habitation. Each island consisted of a village surrounded by two large and unfenced open fields. The village would have had a church, perhaps a larger fortified house of the lord or his steward, and several huts.
The huts were usually small, and perhaps made of whitewashed sod, or wattle and daub. They often housed the family's animals also. There would be one or two rooms, with a loft for storage. The family lived in a single room, in the center of which was a few flat stones on which the fire was placed. The roof was thatched, with a hole at the top through which the smoke escaped. There were probably no windows, and light came in through the smoke hole and an open door.The floor was dirt, sometimes covered with leaves or rushes. The furniture was a trestle table, a few stools, and a storage chest or two for whatever pallets the family might spread on the floor as their beds. Each hut had a messuage, about half an acre of land for a garden, bee-hives, etc. Attached.
The huts were sometimes grouped around a central open place, or green, in which the peasants often grazed their animals. There was usually a source of water nearby, and a stream might run through the green, perhaps ponded to raise fish, ducks, and geese. Along the stream grew tall grass that the villagers mowed regularly to store for winter feed for their animals. Not too far away was the forest or brush in which the villagers pastured their pigs, gathered nuts, berries, herbs, and other things, and, when allowed to do so, picked up sticks and twigs to use as fuel.
The open fields of the village were used to grow grain, usually wheat. They consisted of a large number of adjacent strips, each about 33' wide and 660' long, the amount of land that could be plowed in half a day. Each villager, the lord, and the local church owned several of these strips, and the strips that an individual owned were located throughout the field. The greatest labor was that of plowing, and the village would plow and plant and entire field cooperatively. Since there were no chemical fertilizers or herbicides, the soil was exhausted quickly, and weeds were a constant problem. To meet these concerns, the peasants planted only one of their fields each season. The other was left fallow. The village animals would graze on the weeds, deposit their manure, and, before the remaining weeds had seeded, the peasants would plow them under.
Weather was a constant worry. Wet springs could cut plowing time, rot seed in the ground, and so reduce the harvest. Fall rains could wet the grain before harvesting and make it impossible to dry and thresh. Production was not great -- seven to ten bushels per acre was considered good, and two or three of those bushels had to be saved for seed. Part of the peasants' harvest was taken by the lord as taxes, and part by the church as a tithe, for perhaps a total of three or four more bushels out of ten. So a peasant might gather as his own only a bushel or two from each of his strips. A family of four needed about 35 bushels a year, so families went hungry when there was a harvest shortfall. Most relied upon their garden to give them some variety in their diet and to save them in case of a failure of the wheat crop.
During the period between about 800 and 1000, however, medieval peasants made several innovations in farming that increased production and productivity greatly. One was the use of horses for plowing. Horses are faster and have greater endurance than oxen and can be controlled by voice commands, eliminating the need for an additional man in the plow team to guide the ox or oxen with a sharp pole. Several innovations were needed to make use of horses, however: horseshoes to keep the horses' hooves from softening in the wet earth of plowing time, the horse collar, since horses do not have well-defined shoulders like oxen, and harnessing. The peasants developed tandem harnessing, which allowed as many horses as one had to be hitched to the same vehicle.
This gave the medieval peasants almost unlimited tractive power and made possible the widespread use of the heavy, or mould-board, plow. This plow had an iron plowshare that could cut through the earth and a mould-board that turned the sod over. This made the traditional criss-cross double plowing of fields unnecessary. The mould-board plow could also plow deep -- as long as sufficient tractive power was available -- to make more soil minerals possible, and could plough the heavy but fertile soils of northwestern Europe.
The peasants started using peas and beans as an alternative crop to grain. Peas and beans restore nitrogen to the soil, choke out weeds, provide excellent silage for winter stock feed, and their vines keep the soil friable and thus make plowing easier. Many villages divided their two fields into three, and planted them in a rotating sequence of beans, winter wheat, summer wheat, and fallow. With good planning, this could result in three annual harvests in place of the traditional one.
So conditions in the West were now favorable to a revival of commerce. The slow spread of advanced farming techniques. The heavy plow made it possible to open up the fertile but heavy bottom lands of Europe, and to plow lands with a single pass rather than the criss-cross pattern the lands demanded of the scratch plough. The heavy plow required greater tractive power, and the development of metal horse-shoes, padded horse-collars, and tandem harnessing made it possible to use horses as draft animals. Horses were not only faster but were more intelligent than oxen and so did not need the attention of a man wielding a goad. The peasants discovered the value of leguminous crops (peas and beans) in restoring soil fertility, and -- although they did not realize it -- improved the human and animal diet of western Europe with the addition of the relatively high grade of protein provided by peas and beans. The deep plow and the use of legumes made it possible to change the two-field system, in which 50% of the arable land was put in fallow each season, to a three field-system, in which only 33% of the land needed to be in fallow. Agricultural productivity, as well as production, increased. This led to an increase in the peasant population at the same time that fewer hands were needed to provide the populations food requirements. A "surplus" peasant population arose that needed an outlet. Many of these peasants emigrated to the frontiers of Europe and began to support western European expansion by populating the lands the warrior class conquered. Many others turned to developing Europe's "internal frontier" by draining marshes, as in Belgium and the Netherlands, irrigating dry lands, as in Spain and parts of southern France, and clearing forests, as in Wales and eastern Germany. They began to transform Europe's landscape.
Even this was not sufficient to absorb all of the "surplus" peasant population, and many of them turned to trade and manufacture. Most villages had part-time artisans, who gained an additional income by working during the winter to supply the village's need for particular goods and services. As the size and number of villages grew, some peasant artisans began to work at trades full-time. This same increase in population led to the need for more distinctive personal names, and many people took their trade as a second name. Consequently, modern family names are a living record of the elaboration of the western European economy. Fletcher, Frenier, Shields, Schild, Spearman, Bowman, Boyer, Greaves, Sadler and others were engaged in the production of armaments, while Houseman, Mason, Maurer, Thatcher, Glazer, Turner, Carpenter, Sawyer, Sierra, and Dauber were in the business of home construction and improvement. Smith, Schmidt, LeFevre, Faber, Tinker, Plumb, and Ferrier worked in metals. Busch, Bush, Brewer, Brewster, Aylward, Boardman were in the brewing and bar-tending business. Arkwright, Cooper, Hooper, Boatwright, Wheelwright, Cartwright, Wainwright build boxes and barrels, boats, carts, and wagons. Wagner, Chapman, Packer, Merchant, Marchant, Drover, Dealer, Coiner, Minter were all engaged in the trading and selling of the products of such artisans. The list can be extended immensely. When long-distance trade began to flow once again through Western Europe, there existed a significant, although scattered body of manufacturers and craftsmen there. An agricultural revolution was underway. Population began to increase, and some of that increase began to concentrate in towns and cities and turn their energies to manufacture and commerce.
The presence of a population of artisans and merchants attracted a number of other specialists such as physicians, apothecaries, teachers, parchment-makers, scribes, lawyers, cobblers, furriers, butchers, bakers, cooks, prostitutes, barbers, tailors, and all of the other tradesmen necessary to support an urban population. Some of these centers developed some specialty of local manufacture. Centers along pilgrimage roots usually had a large number of shoemakers, for instance, since pilgrims walked for hundreds of miles along rocky roads and needed new shoes at regular intervals. The towns of Belgium began to use the fine wool from the sheep who pastured in the meadows and marshes along the sea to weave high-grade cloth for export to other towns.
Such industries increased local population still further. The production of woolen cloth, for instance, required carders (often women), fullers, dyers, spinners, weavers, printers (sometimes), and merchants. there was also an increased need for common laborers, and so many relatively unskilled peasants moved into the "new" cities and towns. These urban centers needed supplies of both food and raw materials for processing, and the supply of these commodities transformed peasant society.
Up to this time, there had been little point, from the peasants' point of view, to producing a surplus except to build up a reserve of food as insurance against crop failure, marauding war parties, or any of the other dangers of the time. Neighboring villages, producing the same crops, provided no market for surplus commodities, and there was little enough to buy even if there had been a cash market for surplus production. The need of the new and growing cities and towns for food and raw materials changed that situation completely, and many villagers now strove to increase their production and to sell their crops in the urban centers. Some used their profits to commute their labor services. Instead of spending two days a week in their lords' fields providing two weeks of plowing, two weeks of harvesting, and in numerous minor services, they paid an annual rent. Now able to devote their full energies to producing and selling more than before, such peasants were able to accumulate still more money and to use this money to purchase the land rights of their less fortunate neighbors. A class of landless peasants began to emerge that swelled the ranks of the homeless and jobless poor. The poor moved from place to place, seeking work, and offered a source of cheap labor for plowing and harvesting that made it possible to make medieval agriculture still more profitable. The village community no longer had to support members whose sole contribution was to provide the extra hands needed at harvest time.
European agriculture became rationalized in this fashion. In some parts of Europe, the need for raw materials for manufacturing grew so great that local agriculture could not satisfy that need as well as grow sufficient food for the population. These areas began to import food and raw materials, and this stimulated what might be called a transportation revolution, with the construction of new canals and roads, the dredging of harbors, and the development of new and more efficient wagons and ships. In time, this transportation network made it possible for some regions of Europe to specialize in growing and selling what was best suited for their lands and climate, and buying and importing the others things that they needed. This led to an extraordinary development of the European economy, which became based on regional specialization and the transport of bulk goods for mass consumer markets.
The basic medieval manufacturing organization was the traditional shop -- a master and wife, a couple of employees, and a couple of children learning the trade. The master bought his raw materials, fabricated his product, and sold it retail. The shop was residence, dormitory, workshop,ware-house, and retail store. The masters of a given trade in a particular location united into a guild. The guild served many functions:
The guild system reached a crisis in about 1250-1350. It was non-competitive and adapted to an expanding economy. After 1250, economic expansion slowed and the guilds had to face new conditions. The reaction of the masters of many guilds were
These steps were insufficient in the long run. The guild system was designed to be cooperative rather than competitive. Any desire for efficiency and profit was balanced by the acceptance of the goal of a stable economy and concern for the common good. A significant portion of the profits of the guilds was diverted to providing social services, but the major limitation of the system was that it was based upon a number of small businesses and thus could not develop any efficiency of size. Although the guilds could pool capital, they could not permit a few individuals to accumulate enough capital to establish large and "rationally" organized enterprises.
After 1350, markets began to grow smaller, and the powerful long-distance merchants had to lower their costs in order to compete. They did so by producing their own goods, by-passing the guilds. There were two major systems of such "proto-capitalist" production.
The "Putting-Out System
Merchants' agents would rent the necessary equipment to peasant families, sell them raw materials, and purchase the finished product. This process was particularly common in the production of candles, clocks, pewterware, stockings, hats, but most particularly in weaving. This system continued to be common until the end of the 19th century, and the early parts of George Eliot's (1819-1880) novel, Silas Marner, offer a good picture of its operation at its height.
The "Factory" System
The merchants would concentrate equipment in a warehouse ("factory"), acquire raw materials from their own farms or through agents, hire workers for wages only, ignore any production quotas, and compete rather than co-operate. This system was used primarily for manufacture consisting of several steps or dealing with heavy materials. It eventually developed into the factory system characteristic of the Industrial Era and which is still prevalent in the post-Industrial age.
The manufacturing guilds fought the development of these proto-capitalist systems, but were defeated by an alliance of the merchants' and the other "great" guilds (professional groups such as doctors, druggists, lawyers, gold- and silver-smiths). Although there were class wars in many towns, the artisan guilds were unable to compete economically, and so eventually disappeared. Many guilds persisted for a long time, however, especially those in retail and small-scale service and repair. It was only with the appearance of shopping centers and "supermarkets" after World War II that butchers and bakers lost their professional status, while such groups as plumbers have managed to keep that status. The professional guilds developed into the American Medical Association, the American Bar Association, and the silver- smiths and gold-smiths became the economy's bankers.
The proto-capitalists of the later middle ages did not support civic services, so urban life deteriorated. The workers' standard of living dropped, and this reduced their ability to buy the goods they produced. The European consumer markets grew quite restricted, and this contributed to a general recession in the fifteenth century. Production was now uncontrolled, and cycles of inflation and depression became common. More production was moved to the countryside, and wealth concentrated more rapidly in ever-fewer hands.
Together with the disappearance of the manorial system in the countryside, the emergence of capitalism altered the structure of society. Peasants and middle class split into two classes, the proprietors and a proletariat, the lower levels of which merged with the pauper class. Something of the same thing was happening among the nobility, where there was an increasing gap between the squires and the magnates. The medieval structure of social classes was being replaced by the modern structure based upon economic classes.