Commercial Production: Methods of Exchange

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Commercial Production: Methods of Exchange


First Fruits . As it is in modem society, production activity in the Middle Ages was directed to the end of creating a product. It was not, however, always the case that a produced item would be sold. Most of the medieval population, the massive peasantry, never did acquire skills for commercial production purposes. Homemade goods were in the earlier Middle Ages most frequently produced for home use and not for commercial transactions. Production was undertaken simply as part of one’s social position both within and without the family. Since, however, medieval society depended more on local than long-distance exchange, any goods that were surplus to a household, modest or wealthy, did circulate, if not strictly speaking for commerce, by barter, gifting, or in payment of taxes or debts. Given the inherent shortages in the medieval economy, virtually any item produced could, if its owner desired, make its way into the market.

Production . Commercial production was, however, a part of the medieval economy as well and, just as mercantile exchange, an activity by which one earned part or the whole of one’s livelihood. Medieval farmers, for example, who came to town and exchanged their goods with those of the townsmen, were engaged in part in earning a living from the commercial production of agricultural products. The medieval peasant carpenter or spinner might also have lived in part by farming, in part by practicing his or her skilled trade. Most urban medieval craftsmen, however, lived almost exclusively by selling manufactured goods for barter or money. The rural blacksmith or the fine-metal smiths who settled in the medieval towns would be examples of those who lived by trading goods they had produced, goods whose manufacture requires a specific skill or “art,” such as horseshoes and broaches.

Trading . Commercial trading came about before commercial production. The former was necessary for the few goods, such as salt and iron, which had to be secured outside the village. Many of those who traded exclusively for a living, especially those whose livelihood derived from rare goods, came into towns at fair time and were not a constant presence in the local region. Local producers were the main, regular traders in a town. While producers in the urban environment traded from the front of their shops, the earliest and busiest of urban trading places was the market. Part of the normal routine of a town, the market was the highlight of the week. Most towns had market days once or twice weekly, which is when the farmers would come to town and exchange their goods with those of the townsmen. Farmers usually sold their surplus at the most local markets, but by 1300 peasant women were bringing eggs and produce to market towns as much as twelve miles away from their villages.

Economic Transactions . Two economic transactions dominated the medieval production sphere: the selling of produced goods and services, and the procuring of the raw materials used to produce those goods. The trade component to commercial production was what first made it a viable medieval activity. Predominantly providing self-employment, a craftsman was both artisan and shopkeeper, living and working in the same building. Although a craftsman’s house could range in height from two to sometimes six stories, the ground floor at street level was of the greatest economic importance. It was where artisans sold directly to their customers with the help perhaps of the artisan’s wife

and maybe a relative to attract the buyer. In this setting for the economic transaction of a sale of goods, the producer’s role differed superficially little from any merchant’s.

Selling Services . Selling services based on one’s training was also a viable way to make a living in the Middle Ages. Although many of the service providers were professionals, as, for example, notaries, advocates, or doctors, the model for their method of economic survival was the craftsman. The sale of a commercially produced item had originally borne much greater resemblance to the rendering of a service than to the sale of a good. In an example from the tenth century, a weaver received wool from a textile merchant, and when the cloth was woven, it was supplied to the merchant in return for a wage. This type of economic transaction, which allowed for those who were providing a service to survive in the Middle Ages, was quite different from the standard exchange involving the purchase and sale of produced goods. In the case of a service rendered, one of three possible things was actually being remunerated: a duty’s having been carried out or a task performed such that a product was realized and supplied; the expertise of the individual supplying the service; or the time/labor of the one providing the service.

Patronage . One archetypal medieval situation that derived from the payment-for-service-rendered relationship was that of the medieval artisan whose work was made possible by patronage. Rich people who wanted to beautify their homes and churches supported financially the artists, sculptors, and painters of the day. With this backing, these craftsmen could devote all their time to artistic endeavors. The same relationship existed in the Middle Ages between teachers, writers, and master builders or architects, and their supporters. Patronage is prominently linked to the artistic production of the Renaissance era, but kings and queens, wealthy merchants, Italian patricians, and rich noble families of the Middle Ages became important patrons of the arts. King Louis IX of France gave so much financial encouragement to learning, arts, and architecture that his reign has been called “the Golden Age” of medieval France.

Guild Regulations . In an age when economic laws were few and thieves plentiful, many an honest artisan had reason to bless the power of the guild and its regulations for assuring him a welcome at the town market or on his speciality’s street, where he could find respect for his wares, a guaranteed return, and safety from theft and exploitation. The craft masters, the actual guild members, were all highly skilled in their trades. Therefore, as long as the guild could be assured of the sustained quality of their production, it felt it could also regulate the prices for the goods they sold and/or the wages they were paid for services rendered. Thus, guilds set standards of work and checked their artisans’ products to make sure they were of a high quality. An artisan who sold goods of poor quality would be fined and forced to spend time in the stocks at the marketplace.

Guild Manipulation . Although an artisan who sold his goods at a higher-than-allowed price would also be fined and publicly humiliated, it was obvious sometimes that neither the guild collective nor the individual artisan was acting out of a desire to live up to high ideals of requisite remuneration for work of excellent quality. Guilds saw as one of their main goals to protect the price of their goods and their commerce in the towns. Guilds regulated the numbers of individuals who could be engaged in any trade. Of course, guilds were simply manipulating the economic principle of supply and demand in price determination. The price of manufactures was dependent on the number of products available for purchase, and hence on the number of craftsmen producing them.

Price Determination . In keeping the number of artisans and the number of products available for purchase artificially low at times, guilds caused prices to rise and frequently to remain far higher for longer than otherwise would have been the case. Whenever, during the Middle Ages, the production of goo’ds decreased, such as during the Black Death (1347–1351), when population dropped generally and many craftsmen died, prices rose. They rose markedly, if at the same time, trade into the same markets also declined, since goods that might have substituted for the missing production were also not available. A guild, by holding effectively a monopoly, in the name of the quality of its artisans could reap major economic advantages for its members. Guilds, which functioned by their own rules, frequently found themselves, however, in the position of having to resolve disputes, some of which derived from their placing limits on foreign artisans and products.

Independence of Guilds . Thus, over time, urban artisans came under criticism for the economically sheltered life they could lead as members of guilds, which seemed to place wealth and power ahead of production quality and commercial leadership. Guilds afforded them this luxury in that they established their own rules and judgments to handle internal guild disputes and turned to the town courts to settle commercial disagreements, some of which derived from the merchants responsible for supplying raw materials to artisans or for buying their wares for resale. For most of the Middle Ages guilds played an important role in organizing the new economic and social life of the medieval townsman, but the increasing importance of money changed the guild system. The old personal relationship of a master with his craftsmen-in-training, the journeyman and apprentice, often gave way to a relationship based on cash wages. After the period of the Black Death, the shortage of workers in towns led to a definitive appeal to substantial craft wages. Free peasants moved openly to the towns, where wages were high; serfs fled there secretly. Guilds had less power as production grew in scale and at the hands of wage laborers.

Church and Artisan . The church played a critical role in the commercial life of the artisan. Artisan and customer sold and bought in a single transaction together, which according to church law had to follow a set of moral regulations summed up in the “just price.” The necessary steps to transforming a good from a raw to a processed form were thought by medieval intellectuals to make the end product justifiably more expensive: wine, for example, had invested labor in it that grapes themselves did not; raw materials had a cost; and craftspeople had to purchase tools to create end products. On the other hand, a producer ought not price his product so high that his would-be customer could not afford the item and thus not have his need for it met. Purchases for most people in the Middle Ages meant stretching one’s means as best one could and, with the prices of medieval manufactures dependent on the number of craftsmen and traders in any locale, when prices rose markedly, one simply had to go without. Of course, the laws of supply and demand, however artificially manipulated, could not be completely counteracted by church teaching, and the “just price” remained more of an intellectual exercise for medieval scholastics than a practiced method of economic exchange.

Wealth . Nonetheless, few craftsmen ever figured among the rich of the Middle Ages. Most were of modest means, from their dwellings with oilcloth-covered shuttered windows to their small back gardens that supplemented their craft incomes with garden produce and pigs and chickens. The earliest medieval measure of wealth was land, usually cultivated land, followed by forest land, villages, swamps, and finally wasteland. In the thirteenth century most medieval nobles would still have put landholdings at the top of their assets list. Money, precious metal currency, was, however, becoming more popular as a sign of wealth, especially as the development of trade, commerce, and town life continued and money was needed to buy goods and even to pay workers.

Copper Coinage . Towns became increasingly dependent upon money, not only gold or silver coinage but also copper. The latter metal was less valuable because it is easier to find, yet its lesser value was precisely the reason why tradespeople desired copper coins. They could serve as a medium of exchange for less expensive items. The average daily wage of most later medieval craft professions was quite modest: for example, for agricultural tasks in thirteenth-century Italy, about 2 denarii (silver penny = 1/240 of a pound) in the winter, 3 denarii during the summer for men and half that for women; for carpentry in England at the beginning of the fourteenth century, from 3 denarii to 5 denarii depending on the time of the year; and for wetnurse services in thirteenth century Italy, ¼ denarii per baby. Thus, the currency which represented a fraction of the denarius, black (copper) money, proved useful to commercial producers and their customers.

Moneylender . One artisan in particular was to flourish as a result of the increase in medieval money use: the moneylender. Fluctuation in a coinage’s value was one reason for moneylending’s having become a popular medieval occupation, especially if a bank treasurer or precious-metal storehouse holder could play to his advantage the fact that the apparent value of the coinage was usually ostensibly stronger than the actual value behind it. Another reason for the strength of the moneylender’s occupation was that in the interface between trade and commerce, it offered many different ways of making a profit. The symbiosis of trading and commercial production was obvious when money lent toward the nurturing of production led to favorable prices for the lender once goods were produced. In this scenario the lender would gain from the end purchaser of the product, not from the producer himself, so merchant and producer effectively worked together. One example might be Italian merchants lending to English sheep farmers in return for favorable delivery terms. A more common scenario had town moneylenders being the source of funds for landowners who needed help to get money for goods and wage payments.

Money Wages . From kings, noblemen and women, merchants, and peasants, money began to circulate into the hands of artisans in the form of payment for goods or as wages for service. The increase in the number of large-scale industries after 1200 was a sure indication that money use was on the rise in the Middle Ages in the artisans’ sphere. Both large-scale commercial production and the long-distance trade that fostered it required large amounts of capital investment. Textile production and ore mining are two examples of large-scale commercial production with some characteristics of capital intensity, if only in their wage bills. The Italian city of Milan had a workforce of sixty thousand when it started fine-cloth production around 1100, although it was the only prominent fine-textile production center in southern Europe until the next century. Between 1212 and 1237 tin mining in England rose from five hundred to seven hundred long tons. In the thirteenth century, twelve textile cities and towns, among them Ypres, were a part of the sought-after production of Flanders (present-day Belgium); and by 1313 Ypres alone was producing 92,500 pieces of cloth annually, a total rivaling that of Florence with its workforce of thirty thousand.


John W. Baldwin, The Medieval Theories of the Just Price (Philadelphia: American Philosophical Society, 1959).

Robert H. Bautier, The Economic Development of Medieval Europe (London: Thames & Hudson, 1971).

Thomas N. Bisson, Conservation of Coinage: Monetary Exploitation and its Restraint in France, Catalonia, and Aragon, cA.D.lOOO-c.1225 (Oxford: Clarendon Press, 1979).

Robert S. Lopez, The Shape of Medieval Monetary History (London: Variorum, 1986).

Norman J. G. Pounds, An Economic History of Medieval Europe (London & New York: Longman, 1974).

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Commercial Production: Methods of Exchange

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