What the End of Feudalism Tells Us About Capitalism’s Inevitable Demise
To understand capitalism today you have to go back in time to see where it got its start. The origins of capitalism lie in the economic upheaval that followed one of the largest pandemics in history.
Late stage capitalism is all the rage right now. This is especially true for younger generations — mine included — who believe there is no way out of the economic mess we’re in.
Despite all the doom and gloom, there is light at the end of the tunnel. To get there, however, we’ll have to give up capitalism as we know it and embrace something entirely new.
We’ve been here before. Following the Black Death, Europe underwent radical political, social, and economic transformation. With the death of millions of peasants, feudalism came to an end. But that didn’t happen overnight. It took centuries for a new economic model to emerge — capitalism.
If the United States is indeed in late stage capitalism, a new alternative economic model is in the process of being built. Maybe it will be a digitally native and decentralized economy. Maybe it won’t.
History tells us that transitions take time. We may be instrumental in building the new system that emerges, but it’s likely we won’t have the opportunity to benefit from it.
This essay will examine how the Black Death was a catalyst for massive economic change in Europe during the Middle Ages. It will argue that capitalism emerged as a reaction to the failures of feudalism rather than being an organic source of original innovation.
This tells us that whatever replaces capitalism today will likely be an economic reaction to a catalyst that has already happened — or to something that is to come. We can use the lessons from the past to chart a course in the sea of uncertainty that lies ahead.
The Black Death was a catalyst for major economic disruption, initiating the end of feudalism.
An outbreak of bubonic plague — commonly referred to as the Black Death — struck Europe in the mid-14th century. Based on population data available from that time, about half of Europe’s population was wiped out.
England, one of the largest European powers of the time, was a feudal economy. The church and nobility owned the land, and the peasantry worked it. Mercantilist trade was growing but limited. While craft guilds were prevalent in large cities, the economy was largely based on agricultural output.
This created a highly stratified society where wealthy elites oversaw large agricultural manors and were socioeconomically segregated from the poor. While no one was immune to bubonic plague, your status did play a role in determining your likelihood of survival. In England, approximately 70% of the population lived at or below the poverty line. With poorer hygiene, the plague spread faster among poorer populations, leading to much higher rates of fatalities.
This had disastrous consequences for feudal economies. With millions of peasant laborers killed off by the Black Death, fewer people were available to work. There wasn’t an abundance of cheap labor to work landholders’ fields like there had been before the plague.
With fewer workers participating in the economy, wages rose. As wages rose, prices also rose, and productivity declined. Inflation became rampant, driving the standard of living down. Fewer agricultural goods entered the market, bringing local trade to a standstill.
The post-Black Death years turned into a battle over the economic future of Europe. Feudalism became an unsustainable economic model thanks to the decline in the supply of labor and the subsequent rise in costs that followed. The Protestant Reformation, continental wars in Europe, and the Age of Exploration that started to emerge in the 16th century were all part of a larger transformation from feudalism into capitalism.
Capitalism emerged as a reaction to the flaws of feudalism.
To understand today’s capitalist economy, you first have to understand the chain of events that led to its emergence. It didn’t magically appear. It’s the byproduct of two centuries of transition that began with the Black Death.
As the bubonic plague was ravaging Europe’s population, France and England had just kicked off what would later be known as the Hundred Years’ War. Wars are often financed through debt. The spoils of war are used to repay creditors and soldiers. In turn, soldiers send their earnings home or use it in local economies.
That rarely happens as it’s supposed to. Instead, waring countries levy higher taxes to raise the funds needed to finance their wars. This happened in Europe just as the economy was grinding to a halt due to the Black Death. Unable — and unwilling — to pony up, the peasantry revolted.
Shortly after the Hundred Years’ War came to an end, a new invention found its way to England — the Guttenberg Press. This device challenged the Catholic church’s monopolistic control of information and, thus, its political hegemony. With the publication of Martin Luther’s 95 Theses, the church’s primary source of revenue was called into question: selling salvation to sinners.
The feudal system, upon which the church sat at the top, unraveled. Under feudalism, the Catholic church held vast amounts of land and thus wielded immense political power. With the rise of Protestantism, a new economic theory was born: capitalism.
According to German sociologist Max Weber, capitalism emerged as Protestants began generating wealth and accumulating capital outside of the auspices of the church. The free market — rather than the church — determined the distribution of wealth.
Protestantism provided an alternative route to salvation during one’s time on earth. Instead of paying for forgiveness, Protestants could work hard to earn it. The Protestant work ethic — and our modern day understanding of capitalism — was born.
From this context, capitalism was the solution for the period of time it came into being. It was a reaction to the pre-existing system where private ownership and mobility were non-existent. The free market and free enterprise solved that problem.
But the pendulum has swung back. Property is once again concentrated in the hands of a few. This has created a neo-feudalist economy where the working poor have become economic serfs, beholden to employment in a labor market that imprisons them.
Final takeaway.
To understand the direction we’re heading in, we first must look at the past.
History is often taught in fits and bursts. Students memorize key events, specific dates, and important people without connecting the dots. Transitions between different political systems or economic orders can take decades, if not centuries, to unfold.
The Black Death wasn’t just a static event that led to the deaths of millions of people in the Middle Ages. It was a catalyst. Survivors began questioning the prevailing socioeconomic order of the time. When a new technology was finally invented — the Guttenberg Press — to distribute skepticism at scale, new systems of religion, governance, and economics were born.
Capitalism, then, wasn’t an innovation — it was a reaction. It was a byproduct of centuries of transition out of feudalism.
And it is why private ownership of property is a fundamental tenant of capitalism. Serfs could never own anything in a feudal economy. Capitalism liberated the peasantry. For the first time in human history, poor people could own something and climb their way out of poverty.
The Black Death isn’t a direct corollary to what’s happening in today’s economy, but it’s worth paying attention to. We’ve emerged from a global pandemic that led to the reduction of work and productivity. Governments stepped in to stop the bleeding, but they may have made the situation worse. Money was printed and distributed, leading to the high levels of inflation we’re experiencing today.
Whatever economic system comes next will likely be a reaction to the failures of capitalism. It will acknowledge that private ownership of property is good, but the accumulation of assets in the hands of a few is not. It will confirm that growth has its limits and that profit at all costs is not a viable plan for longevity.
So, what lessons can we take away from the Black Death? The transition period will be messy. There will be civil unrest, a decline in living standards, wars, and economic decline.
But there could be rebirth on the other side. After all, the Renaissance was born out of the Black Death, too. A period of unrivaled art, innovation, and scientific inquiry could lie in the not-so-distant future.
To get there, we must first contend with the failings of capitalism and learn our lessons. In order to endow our children with a prosperous future, we must make whatever system comes next better than the one that preceded it.