Figure 1.02 analyzes patterns of change in English wheat prices (1330/1–1346/7 =100). Prices are for harvest years (e.g., 1347 = Michaelmas, Sept. 29, 1346, to Michaelmas, Sept. 29, 1347). Data are from a price series by D. L. Farmer in H. E. Hallam, ed., The Agrarian History of England and Wales, vol. 2, 1042–1350 (Cambridge, 1988), 779–91. Trends are fitted with an Excel 5.0 program.
Even so, this great inflation of the medieval era was great because it was general throughout the Western world, and because it continued for a very long time. It happened in England, France, Italy, Germany, Iberia, and every other part of Europe where prices have been studied.10 Throughout that broad region, its impact was not perfectly uniform. The pace of inflation was comparatively rapid in the north of Italy, moderate in England and France, and slowest in eastern and northern Europe; but no part of the Western world is known to have escaped it.11
Why did medieval prices go up? Some historians find the cause in an expansion of the money supply; others, in the growth of population. Both factors were involved, but population appears to have been the prime mover. Before 1150, as we have seen, the population of Europe had been slowly increasing. After 1170, its rate of gain accelerated. In Picardy, the rural population doubled during the last quarter of the twelfth century (1175–1200), and kept growing rapidly for three generations thereafter. Similar trends appeared in England, France and Germany.12
Figure 1.03 compares the medieval price revolution in three parts of Europe, where trends were much the same in the thirteenth century, but different in the play of contingent events during the crisis of the fourteenth century. These data were compiled by Wilhelm Abel from price series of Rogers (England); d’Avenel (France); Bartolini, Fabris, Magaldi and Parenti (Italy). The source is Abel, Agrarkrisen und Agrarkonjunktur, appendix.
During the thirteenth century, large parts of rural Europe became more densely settled than they would ever be again until the twentieth century. One study of the Lincoln fens on the east coast of England finds that the number of inhabitants reached a level in 1287 that would not be exceeded until 1950. Similar patterns have been discovered in the English counties of Devonshire, Gloucestershire, Leicestershire, Cambridgeshire, Warwickshire and Norfolk.13
The cause of medieval population-growth was mainly an increase in fertility, not a decline in mortality. After a long period of comparative stability and growing prosperity, women throughout Europe married at earlier ages and decided to have more children. The result was a medieval baby boom that began in the twelfth century and continued for many years.14
This medieval baby boom had important economic consequences. It changed the age-structure of the population. As long as it continued, a larger proportion were dependent children. Fewer were mature adults in the prime of their productive years. This happened at the same time that people needed more food, fuel, houses and land. Demand for life’s necessities expanded more rapidly than supply could increase. Inexorably, prices went up.15
Figure 1.04 finds a strong association between prices and population growth in medieval England. The sources for population are point estimates by H. E. Hallam (1983) and E. Miller (1991); and for grain prices a series by D. L. Farmer, ail in The Agrarian History of England and Wales, II, 537; III, 4–5.
Figure 1.05 shows the long rise of agricultural prices in Angevin England. As in other price revolutions, the price of staple foodstuffs and energy led the advance, and were also the most volatile. The source is D. L. Farmer, “Some Livestock Price Movements in Thirteenth Century England,” Economic History Review 2d ser., 22 (1969) 15.
Not all prices increased at the same rate. The most rapid rises appeared in the price of energy, food, shelter and raw materials— items most heavily in demand during a period of population growth, and least elastic in their supply.16 Specially striking was the price of energy. In England from 1261 to 1320, the price of firewood and charcoal rose faster and farther than that of any other commodity. The cause was not hard to find. During the late twelfth and thirteenth centuries, Europe rapidly cut down its forests, consumed its timber, and burned its brushwood for fuel. Timber and charcoal began to be imported over increasing distances, and the great coal fields of England, Belgium and France began to be exploited on a large scale during this period. London suffered severely from smoke pollution in the thirteenth century.17
Close behind the soaring cost of energy came price-rises for food-stuffs of various kinds—particularly for grain, meat, and dairy products that were the staples of life in medieval Europe. This trend was evident everywhere in the Western world, where a grain market was well established by the early thirteenth century.18
By contrast with energy and food, the price of finished manufactures such as cloth and nails increased comparatively little—less than the cost of raw materials such as wool and iron. The inflation of industrial prices was moderate, because the supply of manufactured goods could be expanded more easily to meet rising demand.
A case in point was the cost of armor. This, the leading “consumer durable” in medieval Europe, was mainly designed to make a more durable consumer. Iron skullcaps called coifs were worn not merely by soldiers but also by traveling merchants who lived in a world where consumer complaints were forcefully expressed. The price of iron coifs and body armor in the thirteenth century behaved very much like that of washing machines and refrigerators in the twentieth century. It rose in nominal terms, but fell in relation to other commodities for which supply was less elastic.19
Altogether, historian Michael Postan observes that “movements of agricultural and industrial prices did not synchronize” with one another during the medieval price-revolution. This distinctive pattern of price-relatives was typical of a demand-inflation. It appeared in every great wave without exception.20
Figure 1.06 represents the relative movement of commodity prices in England from 1261–70 to 1311–20. As in most price revolutions, the cost of energy and food rose most rapidly. Manufactured goods lagged behind. Prices are decennial means, computed from raw data in J. E. Thorold Rogers, A History of Agriculture and Prices in England, I, 1259–1400.
This population-driven inflation was reinforced by material pressures of many other kinds. An economic consequence of population-growth was an expansion of trade. In England, the number of weekly markets licensed by the Crown grew at an accelerating rate from 1180 to 1274. These medieval markets were mainly places for the local exchange of firewood, grain, livestock, bread, ale, cloth and “chapman’s wares” such as coal, salt and fish.21
The growth of commerce stimulated industrial development, at such a pace that medieval historian Jean Gimpel speaks of an “industrial revolution of the thirteenth century.” Dye works, fulling mills and iron works multiplied throughout Europe. Some operated on such a scale that the effects of environmental pollution by medieval industries still scar the landscape of Europe seven centuries later.22
The growth of commerce and industry had major consequences for monetary systems. Expanding markets increased the velocity of money in circulation. This added a monetary inflation to a demand inflation, and caused prices to keep on rising, once the increase had begun.
Cultural Responses to the Medieval Price Revolution
In the mid-thirteenth century, the medieval price-revolution entered a new stage. Inflation rose beyond the limits of previous price fluctuations. As it did so, people began to think about it in a different way— not as a sequence of fluctuations, but as a secular trend. Many years ago, a German scholar discovered that during the middle decades of the thirteenth century (circa 1230–60), medieval writers changed their language of economic description. When they referred to rising grain prices, they shifted their Latin terms from fames to caristia. Fames meant famine, hunger, short harvests. Caristia (from the adjective carus, costly, dear) meant high prices in general and the high cost of living.23
This change of terms from fames to caristia meant that the increase in the price of food was no longer perceived to be
mainly a matter of fluctuations in the size of the harvest. It was now recognized as a general inflation. People had begun to awaken to the fact that the rising cost of living was not a short-run disturbance but a long-term movement.
This discovery set in motion a series of cultural responses that caused prices to rise higher. One of the most important of these inflationary responses was an expansion of the money supply. Silver was the most common coin in commercial exchanges within Europe during the thirteenth century. Gold tended to become the leading currency in international trade.24
The supply of these precious metals was remarkably small in the medieval West. Scholars have estimated that as late as the year 1500, all the gold in Europe would have fit within a two-meter cube (that is, eight cubic meters in all).25 The supply of silver was much larger, but still very small by modern standards. As late as 1200, England’s silver stock totaled only about 300 tons, and would have fit into a fourteen-meter cube. Altogether, it amounted to only a few ounces of sterling for every man, woman and child in the realm.26
At the same time, there were also heavy losses of silver from Europe. France’s unfortunate King Louis IX (1214–70) was captured on a crusade in the year 1250. His royal ransom (together with expenses of the crusade itself) cost his nation 240 tons of silver—a heavy burden on a medieval economy.27
During the thirteenth century, a major effort was made to expand the supply of silver in Europe. Old mines opened again in Hungary and the Harz Mountains. New mines were brought into operation. Output was increased by new technologies.28 By the end of the thirteenth century, production may have risen as high as fifty tons a year.29 Much of this metal was turned into currency. Mints throughout Europe coined money on demand; merchants commonly appeared with a supply of silver, and asked to have it converted into coin, which was done for a fee.30
Silver stocks expanded throughout Europe in the thirteenth century. One study finds that silver coins minted in England rose from 200,000 pounds in the period 1210–18, to more than 500,000 in the 1240s, and above 1,000,000 pounds in the 1280s. As the quantity of money increased, its value declined. The effect was to drive prices higher.31
Gold, which had drained away from Europe during the early Middle Ages, now began to flow in again. Some of it was stolen by Venetian pirates, Teutonic knights and French crusaders. More was gained in trade, and large quantities of bullion were imported from the mines of Africa. In the mid-thirteenth century, the Italian city-states became the first in the West to mint gold coin since the fall of Rome. Genoa may have been the earliest trading town to do so, as early as 1249. The people of Florence followed with gold florins in 1252. Venice began to issue gold ducats in 1284. The ducat became renowned for its stability, by keeping its gold content unchanged for more than five hundred years, from 1284 to the fall of the Venetian republic in 1797. The quantity of gold and silver in circulation, and probably their velocity as well, increased during the late thirteenth century, and added to inflationary pressures.32
Despite these increases, historian Carlo Cipolla observes, “the supply of precious metals proved to be relatively inelastic throughout the whole period, and the growth of the demand for silver for monetary purposes exceeded the supply.” To solve this problem, a variety of other monetary expedients were adopted. Commodities were used as money in addition to gold and silver. Pepper, for example, became a form of currency in the seaport cities of southern Europe. New credit instruments such as contracts of exchange and bank transfers expanded rapidly.33
Metal coins were also systematically debased. In Italy and France particularly, mint-masters reduced the content of silver in their coins, and increased the quantity of base metal. Individuals acted in other ways to diminish the value of money that passed through their hands. Coins were clipped, filed, scraped, and washed despite ferocious penalties. Cipolla finds evidence that debasements “became more rapid between the middle of the thirteenth century and the fourteenth century.”34
The continuing rise in commodity prices during the later stages of the price-revolution was linked to these monetary factors. Deliberate increases in the quantity of precious metal, debasements of various kinds, and the development of other instruments of exchange all sent prices higher. But the money supply was not a deus ex machina that descended inexorably upon the economy. It was an artifact of human will and purpose. People responded to the discovery of caristia by deliberately expanding the quantity of money. In cultural terms their actions helped individuals and institutions to cope with high prices, but had the collective effect of driving prices higher. The price-revolution thus became a self-reinforcing process. High prices increased demand for money. When the demand was met by increased supplies of money, and growing velocity, prices were driven higher.
Figure 1.07 explores the impact of money on prices. It finds an association in movements around the central tendency. Recoinages lowered prices; debasements inflated them. The source is D. L. Farmer, “Some Livestock Price Movements in Thirteenth-Century England,” Economic History Review, 2d ser., 22 (1969) 21.
Other responses to rising prices appeared in the movement of wages, rents and interest. In the early stages of the great wave, wages had kept pace with prices, and during some decades even increased more rapidly. But as inflation continued in the mid-thirteenth century, money wages began to lag behind. As a consequence real wages fell, slowly at first, then with growing momentum. By the late thirteenth and early fourteenth centuries real wages were dropping at a rapid rate. In 1320 real wages in western Europe were 25 to 40 percent lower than they had been a century before.35
At the same time that real wages fell, rents and interest rose sharply. Returns to landowners generally kept pace with inflation and even exceeded it. The old notion that feudal and manorial lords were hard pressed by falling real income during price-revolutions has been contradicted by much research. In many parts of Europe, rents and land values increased even more rapidly than the price of energy and food. The pioneering French price historian Georges d’Avenel may have been the first to discover that rents reached very high levels during the late thirteenth century—the “highest recorded levels in all of the Middle Ages.” Subsequent research has solidly confirmed d’Avenel’s findings. The rate of increase in rent appears to have been greater than 2 percent a year—twice the inflation of grain prices in the later stages of the price-revolution.36
Figure 1.08 finds that returns to labor kept up with the rising cost of living in the beginning of the medieval price revolution, but lagged behind in the later stages (circa 1265–1330). The data are in D. L. Farmer, “Prices and Wages,” in H. E. Hallam, ed., The Agrarian History of England and Wales, Volume II, 1042–1350 (Cambridge, 1988) 777.
Manorial lords had many ways of protecting their income against inflation. They could impose new fines and feudal dues upon the peasantry, and often did so. They also possessed monopolies of milling—in effect, owning the water and even the wind in their territories. The chronicle of Jocelin de Brakelond tells of a free spirit named Herbert the Dean who built himself a mill, and defended it with an argument that “free benefit of the wind ought not to be denied to any man.” His lord was reduced to paroxysms of fury, and swore that “by God’s face I will never eat bread till that building be thrown down.” Conflicts of this sort commonly ended in the triumph of the lord.37
Figure 1.09 examines returns to landed capital in France and Germany, and finds that rents and real estate values rose more rapidly than wages and the general price level. Sources include Robert Fossier, La terre et les hommes en Picardie, 1:581; Karl Lamprecht, Deutsches Wirtschaftsleben im Mittelalter (Leipzig, 1886) 2:614–615.
In the late thirteenth century, manorial lords aggressively expanded their economic privileges. At St. Albans, just north of London, the Abbey constructed its own grist and fulling mills, and forbade the inhabitants to take their grain and cloth anywhere else or even to process them in their homes. The result was an insurrection in 1274. When Queen Eleanor passe
d through St. Albans, she was met by a vast throng of weeping women, reaching out their hands in supplication and crying “Domina, misere nobis.” The Queen tried to help them, but the Abbot of St. Albans took his case to the King’s court and won. Strife continued at St. Albans for many years, while the abbots waxed fatter and the peasants grew thinner. Similar scenes were enacted throughout Europe.38
At the same time, rates of interest also rose very high. In the Italian city states, interest charged in actual transactions increased from 12 percent a year before 1230, to 20 percent later in the century. This rise was greater than the average increase of commodity prices. Real interest rose at a time when real wages were falling.39
Men of wealth were able to profit by the price-revolution in many ways. Powerful Italian merchants, for example, obtained laws that allowed them to insist on being paid in gold florins or ducats which held their value, but permitted them to pay wages and taxes in silver coins which were much debased. As a consequence, rich merchants grew richer, and the poor sank deeper into misery and degradation.40
This growing gap between returns to labor and capital was typical of price-revolutions in modern history. So also was its social result: a rapid growth of inequality that appeared in the later stages of every long inflation. A case in point was the commune of Santa Maria Impruneta, six miles south of Florence in the hills of Tuscany. In 1307, the richest tenth of Impruneta’s families held about 33 percent of its wealth. By 1427, their holdings had increased to 50 percent. At the same time the poor sank deeper into distress. The wealth of the bottom half of the population sharnk from 21 percent to 6 percent. The rich were growing richer. At the same time, much evidence survives of the rapid growth of rural poverty and homelessness during the late thirteenth and fourteenth centuries.41
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