The First Feudal Age: Trade and Currency

From Feudal Society by Marc Bloch. Volume 1: The Growth of Ties of Dependence. Phoenix Books; The University of Chicago Press, 1968. Translated by L.A. Manyon. Cover price: $1.95

From Chapter 4:

The First Feudal Age: Trade and Currency

The life of the Europe of the first feudal age was not entirely self-contained. There was more than one current of exchange between it and the neighbouring civilizations, and probably the most active was that which linked it to Moslem Spain, as witnessed by the numerous Arab gold pieces which, by this route, penetrated north of the Pyrenees and were there sufficiently sought after to become the object of frequent imitations. In the western Mediterranean, on the other hand, long-distance navigation was now practically unknown. The principal lines of communication with the East were elsewhere. One of them, a sea-route, passed through the Adriatic, at the head of which lay Venice, to all appearance a fragment of Byzantium, set in a world apart. On land the Danube route, for a long time severed by the Hungarians, was almost deserted. But farther north, on the trails which joined Bavaria to the great market of Prague and thence, by the terraces on the northern flank of the Carpathians, continued to the Dnieper, caravans passed back and forth, laden on the return journey with products of Constantinople or of Asia. At Kiev they met the great transversal which, running across the plains and from river to river, linked the riparian countries of the Baltic with the Black Sea, the Caspian or the oases of Turkestan. For the West had missed its chance of being the intermediary between the north or north-east of the continent and the eastern Mediterranean, and had nothing to offer on its own soil to compare with the mighty comings and goings of merchandise which made the prosperity of Kievian Russia.

Not only was this trade restricted to very few routes; it was also extremely small in volume. What is worse, the balance of trade seems to have been distinctly unfavourable -- at any rate with the East. From the eastern countries the West received almost nothing except a few luxury articles whose value -- very high in relation to their weight -- was such as to take no account of the expense and risks of transport.

Money was no object to those in the West who could afford luxuries from the East.
In exchange it had scarcely anything to offer except slaves. Moreover, it seems that most of the human cattle rounded up on the Slav and Lettish territories beyond the Elbe or acquired from the slave-traders of Britain took the road to Islamic Spain; the eastern Mediterranean was too abundantly provided with this commodity from its own sources to have any need to import it on a large scale. The profits of the slave-trade, in general fairly small, were not sufficient to pay for the purchase of precious goods and spices in the markets of the Byzantine world, of Egypt or of nearer Asia. The result was a slow drain of silver and above all of gold. If a few merchants unquestionably owed their prosperity to these remote transactions, society as a whole owed scarcely anything to them except one more reason for being short of specie.

Mmmm yes, trade imbalance. We know of that, these days.
However, money was never wholly absent from business transactions in feudal Europe, even among the peasant classes, and it never ceased to be employed as a standard of exchange. Payments were often made in produce; but the produce was normally valued item by item in such a way that the total of these reckonings corresponded with a stipulated price in pounds, shillings and pence. Let us therefore avoid the expression 'natural economy', which is too summary and too vague. It is better to speak simply of a shortage of currency. This shortage was further aggravated by the anarchic state of minting, another result of the subdivision of political authority and the difficulty of communication: for each important market, faced with the threat of shortage, had to have its local mint. Except for the imitation of exotic coinages and apart from certain insignificant little pieces, the only coins now produced were denarii, which were rather debased silver pieces. Gold circulated only in the shape of Arab and Byzantine coins or imitations of them. The libra and the solidus were only arithmetical multiples of the denarius, without a material basis of their own. But the various coins called denarii had a different metallic value according to their origin. Worse still, even in one and the same area almost every issue involved variations in the weight or the alloy. Not only was money generally scarce, and inconvenient on account of its unreliability, but it circulated too slowly and too irregularly for people ever to feel certain of being able to procure it in case of need. That was the situation, in the absence of a sufficiently active commerce.

But here again, let us beware of too facile a formula -- the 'closed economy'. It would not even apply exactly to the small farming operations of the peasants. We know that markets existed where the rustics certainly sold some of the produce of their fields or their farmyards to the townsfolk, to the clergy, to the men-at-arms. It was thus that they procured the denarii to pay their dues. And poor indeed was the man who never bought a few ounces of salt or a bit of iron. As to the 'autarky' of the great manors, this would have meant that their masters had gone without arms or jewels, had never drunk wine (unless their estates produced it), and for clothes had been content with crude materials woven by the wives of tenants. Moreover, even the inadequacies of agricultural technique, the disturbed state of society, and finally the inclemency of the weather contributed to maintain a certain amount of internal commerce: for when the harvest failed, although many people literally died of starvation, the whole population was not reduced to this extremity, and we know that there was a traffic in corn from the more favored districts to those afflicted by dearth, which lent itself readily to speculation. Trade, therefore, was not non-existent, but it was irregular in the extreme. The society of this age was certainly not unacquainted with either buying or selling. But it did not, like our own, live by buying and selling.

Moreover, commerce, even in the form of barter, was not the only or perhaps even the most important channel by which at that time goods circulated through the various classes of society. A great number of products passed from hand to hand as dues paid to a chief in return for his protection or simply in recognition of his power. It was the same in the case of that other commodity, human labour: the corvée furnished more labourers than hire. In short, exchange, in the strict sense, certainly played a smaller part in economic life than payment in kind; and because exchange was thus a rare thing, while at the same time only the poorest could resign themselves to living wholly on their own produce, wealth and well-being seemed inseparable from authority.

Wealth and well-being seemed inseparable from authority: a wonderful insight.
Nevertheless, in an economy so constituted the means of acquisition at the disposal even of the powerful were, on the whole, singularly restricted. When we speak of money we mean the possibility of laying by reserves, the ability to wait, the 'anticipation of future values' -- everything that, conversely, the shortage of money impedes.

Sorry to interrupt mid-paragraph. But that last sentence there, the one that begins "When we speak of money..." -- I have to discuss it. In my copy of the book I highlighted it heavily, some years back. But when I read it today I found it confusing. Bloch, writing When we speak of money, is referring to us, the people of our day, or Bloch's day more specifically. Block (1886-1944) originally wrote Feudal Society in 1939 (according to Wikipedia).

So he lived through the Great Depression and wrote that sentence near the end of it. I would have thought his view of money then would be similar to ours today. But it isn't. When I think of money I do not think of "laying by reserves," of setting money aside, of waiting to make that special purchase. I think of getting the paycheck and paying the bills. Bloch thought of money as a store of value. I think of it as a medium of exchange.

Perhaps I am still too near the time before our crisis, and still think in pre-crisis mode.

I think in our day there is a shortage of money. Most people know better. But I know we have a lot of credit in circulation, which looks like money in circulation and works like money in circulation but costs more to use, and has to be paid back besides. We don't have a lot of money. We have a shortage of money, and a lot of debt.

In feudal times the wealthy collected ornaments -- "the crown, the goblet, or the crucifix" -- made largely of gold. They had a shortage of money because so much of their gold was in these ornaments. We have a shortage of money too, but money is different now. Circulating money is in short supply because so much of the money has been stashed away as savings. It looks like we don't have a shortage of money because the savings get lent out, creating credit-in-circulation which looks just like money but costs so much more.

It is true that people tried to hoard wealth in other forms. The nobles and kings accumulated in their coffers gold or silver vessels and precious stones; the churches amassed liturgical plate. Should the need arise for an unexpected disbursement, you sold or pawned the crown, the goblet, or the crucifix; or you even sent them to be melted down at the local mint. But such liquidation of assets, from the very fact of the slowing down of exchange which made it necessary, was never easy nor was it always profitable; and the hoarded treasure itself did not after all constitute a very large amount. The great as well as the humble lived from hand to mouth, obliged to be content with the resources of the moment and mostly compelled to spend them at once.

The weakness of trade and of monetary circulation had a further consequence of the gravest kind. It reduced to insignificance the social function of wages. The latter requires that the employer should have at his disposal an adequate currency, the source of which is not in danger of drying up at any moment; on the side of the wage-earner it requires the certainty of being able to employ the money thus received in procuring for himself the necessities of life. Both these conditions were absent in the first feudal age. In all grades of the hierarchy, whether it was a question of the king's making sure of the services of a great official, or of the small landlord's retaining those of an armed follower or a farm-hand, it was necessary to have recourse to a method of remuneration which was not based on the periodic payment of a sum of money. Two alternatives offered: one was to take the man into one's household, to feed and clothe him, to provide him with 'prebend', as the phrase went; the other was to grant him in return for his services an estate which, if exploited directly or in the form of dues levied on the cultivators of the soil, would enable him to provide for himself.

Now both these methods tended, though in opposite ways, to create human ties very different from those based on wages. Between the prebend-holder and the master under whose roof he lived the bond must surely have been much more intimate than that between an employer and a wage-earner, who is free, once his job is finished, to go off with his money in his pocket. On the other hand, the bond was almost inevitably loosened as soon as the subordinate was settled on a piece of land, which by a natural process he tended increasingly to regard as his own, while trying to reduce the burden of service. Moreover, in a time when the inadequacy of communications and the insufficiency of trade rendered it difficult to maintain large households in relative abundance, the 'prebend' system was on the whole capable of a much smaller extension than the system of remuneration based on land. If feudal society perpetually oscillated between these two poles, the narrow relationship of man and man and the looser tie of land tenure, the responsibility for this belongs in large part to the economic regime which, to begin with at least, made wage-earning impracticable.


The first feudal age was part of a long, slow recovery from a great-great-great depression that we call the Dark Age.

My idea of "recession" is not that everyone is worse off, but that fewer people do better. I think my idea of recession comes from this Marc Bloch excerpt. In those unfortunate times, there were not so many monetary transactions. And a lot of those were large-scale, gold-coin transactions -- buying a neighboring feudal village, perhaps. And yes, even the peasants and serfs used money on occasion. But more silver than gold. And less silver than base metal. It was very much like "the two economies" that John Edwards (the presidential candidate) used to speak of.