The Economy in the Middle Ages: The Medieval Economic System

In my mind, the Middle Ages were not as dark and dreary as many economists understand. This is because society traded a lot off for industrialization and to live in a post-industrial world. I had four grandparents from the 19th century, and they lived under a semi-feudal system. Therefore, I can speak from experience. Although if you are measuring aggregate GDP per capita, they were not as well off, if you look at life quality, maybe Medieval economics is not what it appears at first glance.

The Medieval System, specifically in the minds of most, is connected to trade and industry in Western and Central Europe. In Eastern Europe, it was almost until the 19th century before the economic change occurred. So, the dates are fluid depending on geography when we speak of the Medieval economic system. This, of course, is connected to political reality.

What was Medieval Economics?

During the Middle Ages, which lasted from the 5th to the 15th century, economies were characterized by a feudal system and manorialism. In this system, the lords owned the land and provided protection to the peasants in exchange for their labor and a portion of their crops. Trade was primarily local and limited, with merchants and artisans operating in town marketplaces. The growth of towns and the expansion of trade routes, such as those along the Mediterranean Sea, led to the development of a more sophisticated economy and the emergence of long-distance trade. The use of money became more widespread, and the growth of a money-based economy facilitated the growth of the merchant class. Despite these developments, the feudal system remained the dominant economic organization throughout the Middle Ages, and most people lived and worked on the land.

Medieval times and the economy

What was the average day life for a Medieval peasant?

The daily life of a medieval peasant was characterized by physical labor and a lack of material comforts by modern standards. If you have never had something like the Internet, you do not miss it and might have even been happier. Most peasants lived in small, self-sufficient communities, working on the land and performing various farming and household maintenance tasks. They lived and worked with their family. There was no commute. A typical day for a peasant might have included:

  • Rising early to tend to livestock and complete chores such as milking cows or collecting eggs.
  • Working in the fields, planting and harvesting crops, and tending to animals.
  • Taking a break for a simple meal, which might consist of bread, cheese, and vegetables.
  • Resuming work in the afternoon, either in the fields or performing other tasks such as weaving, blacksmithing, or carpentering.
  • Returning home in the evening for a modest dinner, spending time with family, or participating in community events.

Going to bed early, as there was limited access to light and entertainment in the evenings.

  • No Streaming or smartphones
  • Time talking with friends and family, playing games, telling stories, looking at the stars, and dreaming and speculating about life.

Peasants lived a simple, agrarian lifestyle with limited opportunities for advancement. But time moved slower because of the lack of digitalization. Life had a sweeter quality. I can speak from experience. I grew up before computers and cell phones and the wide use of TV. And my wife is from a village in Europe, as did my grandparents even less. Life was perhaps better, except we did not have all the plastic gadgets.

If you have ever lived in the countryside or in a village, you understand that objectively this is a high quality of life.

Was love in the Middle Ages about money?

Upper-class marriage in the Middle Ages was often more about social and political considerations than about love, and money was a factor in many marriages. Families often made arrangements to secure economic or political advantages, such as increasing land holdings or forming alliances between noble families. Dowries, gifts, or property brought by a bride to marriage were also commonly used to enhance the financial position of the groom’s family. That created courtly love, which is beyond the scope of economics.

Love and high romance ruled the Middle Ages

However, for most people, love and romance defined medieval society. Troubadours, wandering poets, and musicians sang of romantic love and chivalry, and courtly love, a highly stylized code of behavior, became popular among the nobility. Tales of chivalry and courtly love, such as those of King Arthur and the Knights of the Round Table, also spread throughout Europe and inspired a fascination with romantic love.

So while money played a role in many marriages in the Middle Ages, the idea of love and romance was also present and played a role in most people’s lives except in the “privileged classes”. I think I would instead have been a peasant.

What was the monetary system like in Medieval times?

M ney is a medium of exchange, nothing more. The government does not define money. However, it was based on trust to function as a medium of exchange. Tangible assets that were portable could function as money.

The monetary system during the Middle Ages was complex and varied across different regions and time periods. However, some standard features included:

  1. Use of coins: Coins, such as gold, silver, and copper, were widely used as currency. The value of coins was tied to their weight and metal content, and local lords or monarchs often minted them.
  2. Limited circulation of coins: Coins were often scarce, and trade was often conducted through barter or the use of credit. This made the monetary system relatively inefficient and limited economic growth.
  3. Lack of standardization: Different regions used different currencies and coins, leading to confusion and making trade between regions difficult. However, conscious diluting the metal was not widespread until after the 1700s (Murry Rothbard), when governments were financing imperialism.
  4. Use of money changers: To facilitate trade, money changers were established in marketplaces to exchange coins from different regions and to provide loans.
  5. The emergence of paper money: Paper money was used in some regions, such as China; here, it was used as a form of IOU from merchants to be redeemed for coins later. Paper money was arguably a step back economically if not backed by gold.

The monetary system during the Middle Ages was dominant d mainly by coins, but paper money and other forms of credit also played a role. The limited circulation of coins and lack of standardization made the monetary system relatively inefficient. However, it was still a crucial part of the medieval economy and helped to facilitate trade and commerce. People would use commodity money in the smaller towns and villages.

Trade in the Dark Ages

What is commodity money?

Commodity money is a form of currency based on a commodity with intrinsic value and is widely accepted as a medium of exchange. Commodity money is typically made from valuable metals, such as gold or silver, and its value is tied to the market value of the underlying commodity. It was basically a step above barter.

One of the advantages of commodity money is that it has inherent value, which makes it more stable and less susceptible to inflation than fiat money (money without intrinsic value backed by government decree). Commodity money is also portable, divisible, and easily stored, making it well-suited for use as a medium of exchange.

Who were the economic thinkers of the Middle Ages?

During the Middle Ages, economic thought was shaped by the teachings of t Catholic Church and the influence of the ancient Greek and Roman philosophers. The Church tried to give guidance, rightly or wrongly, about good economic conduct. In my opinion, it has a net positive effect. You can read books by Historian Thomas Wood in that regard. I recommend The Church and the Ma ket: A Catholic Defense of the Free Economy (Studies in Ethics and Economics). Here is an academic paper. Ideals of the Church on Economics

Some of the most influential economic thinkers of the period include:

  1. Thomas Aquinas (1225-1274): A medieval philosopher and theologian, Aquinas wrote extensively on economics and ethics. He believed that the just price of a good should be based on the cost of production, the need for the item, and the market demand for it. – My personal favorite. He developed the idea of a just price. A “fair or just” price still is in our consciousness today. That is cost + a reasonable profit, e.g., 10%. After the marginal revolution, this idea was not applicable, but it did play a role in medieval times and thinking about economics.
  2. Albertus Magnus (1193-1280): A German philosopher and theologian, Albertus Magnus wrote about the role of money in the economy and the importance of stable prices for economic growth.
  3. Richard of Saint-Victor (1110-1173): A French theologian and author, Richard of Saint-Victor, wrote about the ethics of trade and the importance of fair prices in the marketplace. This was similar to Aquinas.
  4. Henry of Ghent (1217-1293): A Belgian philosopher and theologian, Henry of Ghent wrote about the role of property rights in the economy and the importance of balanced trade for economic growth.
  5. John Duns Scotus (1266-1308): A Scottish philosopher and theologian, Duns Scotus wrote about the role of contracts in the economy and the importance of property rights for economic growth.

These thinkers made essential contributions to economic thought, laying the foundations for the development of modern economics. Their ideas influenced later economists and helped shape ethical and philosophical foundations of economic thought.

Goodness of the Middle Ages

Some Economic ideals from the Middle Ages the world could use today

Maybe the world would be better off if we fused modern technology with the economic ideals of the Middle Ages.

  • Organic, sustainable agriculture
  • Workers work with their families or close to home.
  • A fair and just price system
  • Money is based on gold.
  • Small markets and organizations rather than super conglomerate corporations
  • Donating 10% back to the community.

Considering the above, maybe I would go back to Mideveival times if I could, would you?

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