The Stages in the Social History of Capitalism

by Henri Pirenne

But the situation changes from the moment when the increasing intensity of commerce begins to furnish men with new means of existence. Immediately one discovers an uninterrupted movement of migration of peasants from the country towards the places in which the handling of merchandise, the towing of boats, the service of merchants furnish regular occupations and arouse the hope of gain.

If the old cities disadvantageously placed at one side from the highways of travel continue in their torpor, the others see their population increase continuously. Suburbs join the old enclosure; new markets are established; new churches are built for the new comers; and soon the primitive nucleus of the town, surrounded on all sides by the houses of the immigrants, becomes merely the quarter of the priests, bound to the shadow of the cathedral and submerged on all sides by the expansion of lay life. Much that at the beginning was the essential is now nothing more than the accessory. The episcopal burg disappears amid faubourgs.[11] The city has not been formed by growing with its own forces. It has been brought into existence by the attraction which it has exerted upon its surroundings whenever it has been aided by its situation. It is the creation of those who have migrated toward it. It has been made from without and not from within. The bourgeoisie of the oldest towns of Europe is a population of the transplanted. But it is at the same time essentially a trading population, and no other proof of this need be advanced than the fact that, down to the beginning of the twelfth century, mercator and burgensis were synonymous terms.

Whence came these pioneers of commerce, these immigrants seeking means of subsistence, and what resources did they bring with them into the rising towns? Doubtless only the strength of their arms, the force of their wills, the clearness of their intelligence. Agricultural life continued to be the normal life and none of those who remained upon the soil could entertain the idea of abandoning his holding to go to the town and take his chances in a new existence. As for selling the holding to get ready money, like the men of a modern rural population, no one at that time could have imagined such a transaction. The ancestors of the bourgeoisie must then be sought, specifically, in the mass of those wandering beings who, having no land to cultivate, floated across the surface of society, living from day to day upon the alms of the monasteries, hiring themselves to the cultivators of the soil in harvest time, enlisting in the armies in time of war, and shrinking from neither pillage nor rapine if the occasion presented itself. It may without difficulty be admitted that there may have been among them some rural artisans or some professional peddlers. But it is beyond question that with very few exceptions it was poor men who floated to the towns and there built up the first fortunes in movable property that the Middle Ages knew.

Fortunately we possess certain narratives which enable us to support this thesis with concrete examples. It will suffice to cite here the most characteristic of them, the biography of St. Godric of Finchale.[12]

He was born of poor peasants in Lincolnshire, toward the end of the eleventh century, and from infancy was forced to tax his ingenuity to find the means of livelihood. Like many other unfortunates of all times, he at first walked the beaches on the outlook for wreckage cast up by the sea. Then we see him, perhaps by reason of some fortunate find, setting up as a peddler and travelling through the country with a little pack of goods (cum mercibus minutis). At length he gathers together a small sum, and one fine day joins a troop of town merchants whom he has met in the course of his wanderings. Thenceforward he goes with his companions from market to market, from fair to fair, from town to town. Having thus become a professional merchant, he rapidly gains a sufficient sum to enable him to associate himself with other merchants, charter a boat with them, and engage in the coasting trade along the shores of England, Scotland, Denmark, and Flanders. The company is highly successful. Its operations consist in carrying to a foreign country goods which it knows to be uncommon there, in selling them there at a high price, and acquiring in exchange various merchandise which it takes pains to dispose of in the places where the demand for them is greatest and where it can consequently make the greatest gains. At the end of some years this prudent practice of buying cheap and selling dear has made of Godric, and doubtless of his associates, a man of important wealth. Then, touched by divine grace, he suddenly renounces his fortune, gives his goods to the poor, and becomes a monk.

The story of Godric, if one omits its pious conclusion, must have been that of many others. It shows us, with perfect clearness, how a man beginning with nothing might in a relatively short time amass a considerable capital. Our adventurer must have been favored by circumstances and chance. But the secret of his success, and the contemporary biographer to whom we owe the story insists strongly upon it, is intelligence.[13] Godric in fact shows himself a calculator, I might even say a speculator. He has in a high degree the feeling, and it is much more developed among minds without culture than is usually thought, for what is practicable in commerce. He is on fire with the love of gain. One sees clearly in him that famous spiritus capitalisticus of which some would have us believe that it dates only from the time of the Renaissance. Here is an eleventh-century merchant, associated with companions like himself, combining his purchases, reckoning his profits, and, instead of hiding in a chest the money he has gained, using it only to support and extend his business. More than this, he does not hesitate to devote himself to operations which the Church condemns. He is not disquieted by the theory of the just price; the Decretum of Gratian disapproves in express terms of the speculations which he practises: "Qui comparat rem ut illam ipsam integram et immutatam dando lucretur, ille est mercator qui de templo Dei ejicitur".

After this, how can we see, in Godric and any of those who led the same sort of life, anything else but capitalists? It is impossible to maintain that these men conducted business only to supply their daily wants, impossible not to see that their purpose is the constant accumulation of goods, impossible to deny that, barbarous as we may suppose them, they none the less possessed the comprehension, or, if one prefers, had the instinct for commerce on the large scale.[14] Of the organization of this commerce the life of Godric shows us already the principal features, and the description which it gives us of them is the more deserving of confidence because it is corroborated in the most convincing fashion by many documents. It shows us, first of all, the merchant coming from the country to establish himself in the town. But the town is to him, so to speak, merely a basis of operations. He lives there but little, save in the winter. As soon as the roads are practicable and the sea open to navigation, he sets out. His commerce is essentially a wandering commerce, and at the same time a collective one, for the insecurity of the roads and the powerlessness of the solitary individual compel him to have recourse to association. Grouped in gilds, in hanses, in caritates, the associates take their merchandise in convoy from town to town, presenting a spectacle entirely like that which the caravans of the East still furnish in our day. They buy and sell in common, dividing the profits in the ratio of their respective investments in the expedition, and the trade they carry on in the foreign markets is wholesale trade, and can only be that, for retail trade, as the life of Godric shows us, is left to the rural peddlers. It is in gross that they export and import wine, grain, wool, or cloth. To convince ourselves of this we need only examine the regulations which have been preserved to us. The statutes of the Flemish hanse of London, for example, formally exclude retail dealers and craftsmen from the company.

Moreover, the merchant associations of the eleventh and twelfth centuries have nothing exclusively local in their character. In them we find bourgeoisie of different towns, side by side. They have rather the appearance of regional than of urban organisms. They are still far from the exclusivism and the protectionism which are to be shown with so much emphasis in the municipal life of the fourteenth century. Commercial freedom is not troubled by any restrictive regulations. Public authority assigns no limits to the activity of the merchants, does not restrict them to this or that kind of business, exercises no supervision over their operations. Provided they pay the fiscal dues (teloneum, conductus, etc.) levied by the territorial prince and the seigneurs having jurisdiction at the passage of the bridges, along the roads and rivers, or at the markets, they are entirely free from all legal obstacles. The only restrictions which hinder the full expansion of commerce do not come from the official authority, but result from the practices of commerce itself. To wit, the various merchant associations, gilds, hanses, etc., which encounter each other at the places of buying and selling, oppose each other in brutal competition. Each of them excludes from all participation in its affairs the members of all the others. But this is merely a state of facts, resting on no legal title. Force holds here the place of law, and whatever may be the differences of time and of environment, one cannot do otherwise than to compare the commerce of the eleventh and twelfth centuries to that bloody competition in which, in the sixteenth and seventeenth centuries, the sailors of Holland, England, France, and Spain engaged in the markets of the New World. We shall conclude then that medieval commerce, at its origin, is essentially characterized by its regional quality and by its freedom. And it is not difficult to understand that it was so, if one bears in mind two facts to which attention should be drawn.

In the first place, down to the end of the twelfth century, the number of towns properly so-called was relatively small. Only those places that were favored by a privileged geographical situation attracted the merchants in sufficient number to enable them to maintain a commercial movement of real importance. After that the attraction which these centres of business exerted upon their environs was much greater than is ordinarily imagined. All the secondary localities were subject to their influence. The merchants dwelling in these last, too few to act by themselves, affiliated themselves to the hanse or gild of the principal town. The Flemish hanse, which we have already instanced, proves this fully, by showing us the merchants of Dixmude, Damme, Oudenbourg, Ardenbourg, etc., seeking admission into the hanse of Bruges.