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1.7: Cities and Economic Change

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    The increase in population tied to the agricultural revolution had another consequence: beyond simply improving life for peasants and increasing family size, it led to the growth of towns and cities. Even though most peasants never left the area they were born in, many did migrate to the nearest towns and cities and try to make a life there; serfs (unfree peasants) who made it to a town and stayed a year and day were even legally liberated from having to return to the farm. Likewise, whole families and even villages migrated in search of new lands to farm, generally speaking to the east and north as noted above.

    This period saw the rebirth of urban life. Not since the fall of Rome had most towns and cities consisted of more than just central hubs of local trade with a few thousand inhabitants. By the twelfth century, however, many cities were expanding rapidly, sometimes by as much as six times in the course of a few centuries. Likewise, the leaders of these cities were often merchants who grew rich on trade, rather than traditional landowning lords.

    Even as the agricultural revolution laid the foundation for growth and the cities took advantage of it, other factors led to the economic boom of this period. Lords created new roads and repaired Roman ones from 1,000 years earlier, which allowed bulk trade to travel more cheaply and effectively. More important than bulk goods, however, were luxury goods, a trade almost entirely controlled by the Italian cities during this period. Caravans arrived in the Middle East from China and Central Asia and sold goods to Italian merchants waiting for them. From the Black Sea Region and what was left of Byzantium, the Italians then transported these goods back to the west. Silk and spices were worth far more than their weight in gold, and their trade created the foundation for early financial markets and banks.

    Trade networks emerged not only linking Italy to the Middle East but southern to northern Europe. In the Champagne region of France annual fairs brought merchants together to trade their goods. German rivers saw the growth of towns and cities on their banks where goods were exchanged. Starting in the twelfth century, the German city of Lubeck became the capital of the Hanseatic League, a group of cities engaged in trade that came together to regulate exchange and maintain monopolies on goods.

    The social consequences were dramatic and widespread, yet the status of merchants in European society was troubled. They were resented by the poor (still the vast majority of the population), often despised by traditional land-owning nobles, and frequently condemned by the church. Usury, the practice of lending money and charging interest, was classified as a sin by the Church even though the Church itself had to borrow money and pay interest constantly. Likewise, anti-Semitic stereotypes about Jews as greedy and ruthless arose from the simple fact that dealing in money and money-lending was one of the only professions Jews were allowed to pursue in most medieval kingdoms and cities. Christian Europeans needed loans (as it happens, loans and banking are essential to a functioning cash economy), but despised the Jews they got those loans from - hence the origins of some of the longest-lasting anti-Semitic stereotypes.

    Even though cities did not "fit" in the medieval worldview very well, even the most conservative kings had to recognize the economic strength of the new cities. Just as peasants had been able to negotiate for better treatment, large towns and cities received official town charters from kings in return for stable taxation. In many cases, cities were practically politically independent, although they generally had to acknowledge the overall authority of the king or local lord.

    The growth in trade did not, however, create a real “market economy” in the modern sense. For one thing, skilled trades were closely regulated by craft guilds, which maintained legal monopolies. Monopolies were granted to guilds by kings, lords, or city governments, and anyone practicing a given trade who was not a member of the corresponding guild could be fined, imprisoned, or expelled. Guilds jealously guarded the skills and tools of their trades - everything from goldsmithing to barrel making was controlled by guilds. Guilds existed to ensure that their members produced quality goods, but they also existed to keep out outsiders and to make the "masters" who controlled the guilds wealthy.

    This page titled 1.7: Cities and Economic Change is shared under a CC BY-NC-SA 4.0 license and was authored, remixed, and/or curated by Christopher Brooks via source content that was edited to the style and standards of the LibreTexts platform; a detailed edit history is available upon request.