Middle Ages Economy Essay

1392 Words 6 Pages
Middle Age Economy

The economy mostly seen in the early middle ages was feudalism, Europe’s form of government

in the Middle Ages, was developed in the fifth century to meet the changing needs of the time. It

was based heavily on the honor system. The king had overall power, then the lord, then the

vassals, or landowners, and finally down to the peasants, known then as the villeins. The fiefs, or

estates, could be rented out to one vassal who would then rent portions of the fief to three more,

and so on. Each person would give their peer a fee (called the guild) and goods in return for

protection. As an old medieval saying states, "No land without the lord, no lord without the

land." The
…show more content…
Money changers were soon holding and transferring large

sums of money and extending loans to merchants. As the demand increased, so did the number

of services. Common financial activities came to include granting loans, investing, as well as

most of the deposit, credit and transfer functions of a modern bank.

A major obstacle to the growth of banks in the Middle Ages was the Church's prohibition of

usury, the charging of interest on loans. As economic activity expanded, however, the papacy

became one of the first to insist that interest should be paid on investments made at a risk.

Because they were forbidden to hold land or engage in more "acceptable" sources of economic

enterprise, money changers in the Middle Ages were typically Jews. After the shift in Church

policy regarding usury, it became more acceptable to be a financier and attempts were made to

expel Jews from their commercial role.

The international luxury trade was centered in Rome during the Middle Ages. By the end of the

thirteenth century, Florentines, as papal treasurers and tax collectors, spurred Florence to become

the banking centre of Europe. Large numbers of families invested capital in commercial and

industrial developments. In the 1290's, the Bardi and Peruzzi families had established

More about Middle Ages Economy Essay