Inns on the Road
Despite the difficulty of roads and inns, travel was very common. In Erasmus's opinion the inns of France were tolerable, especially since "the serving girls laugh and joke and flirt," and "kiss you when you want to leave," and "everything is so cheap." But he condemned German innkeepers, calling them rude, surly, lazy and dirty. When you tie up your horse, he says, you enter the stove-heated common room with baggage, boots, mud and all, for it is a public place whose door is open to every newcomer. There you take off your boots and put on shoes, and change your shirt if you wish; one man combs his hair, another belches garlic. The variety of languages spoken equals that of the workmen who built the Tower of Babel. To his mind nothing is so dangerous as so many people packed together in that smoky, steamy air, especially when they sweat out their bodies. He adds that many of them have the Spanish pox, or French pox as they call it, though that disease has afflicted all nations.
If the inns were really like this, we should forgive some of the sins of the wandering merchants who endured such hardships to widen the networks of commerce and link villages and peoples together. Every ten years a new trade route was opened, on land by Richard Chancellor in Russia and at sea by thousands of daring travelers and explorers. Shylock, the character in Shakespeare's Merchant of Venice, was always going back and forth among England, Lisbon, Tripoli, Egypt, India and Mexico. Genoa had trading posts on the Black Sea and in Armenia, Syria, Palestine and Spain, made a peace treaty with the Sublime Porte, and sold arms to the Ottoman Turks, who were at war with Christians. France noticed this and made friendship treaties with the Ottoman sultans, so that from 1560 on it could dominate the trade of the Mediterranean. The port of Antwerp imported goods from everywhere and sent goods everywhere. To serve such a wide economy, bankers refined and perfected their organizations and techniques.
Banks, Credit and Interest
As the cost of wars rose, governments had to borrow huge sums from banks. In the days of feudalism the lords of each district brought their own men to war with their bows, spears and swords, but now every state had to keep its own regular army and equip its hired men with firearms and artillery. The prosperity or bankruptcy of financial firms then depended on whether governments could pay the interest on their loans or refused. People deposited their savings in banks at interest, and the banks put that capital into large commercial and industrial deals.
Bills of exchange and drafts replaced the hard task of shipping money or goods. The interest rate depended more on the borrower's credit than on the lender's greed. For example, the free cities of Germany, whose trade was in the hands of reliable merchants, paid only five percent, while Francis I borrowed at ten percent and Charles V at twenty. As the economy steadied, rates fell gradually.
Silver, Gold and the Price Revolution
Gold and silver mined in Germany, Hungary, Spain, Mexico and Peru supplied coin easily and abundantly. These new sources of precious metal arrived at a good moment, because for some time the quantity of goods had been growing far faster than the supply of coin. Part of the cost of Asian imports was balanced by exports and the rest was paid in gold and silver, and so in the decades before Columbus's voyage prices fell and trade stagnated. After European mining boomed and silver and gold arrived from Africa and America, the stock of precious metals outgrew the output of goods; as a result prices rose and trade warmed. An economy based on the circulation of money swept away the old economy, which depended on landholding or on guild control of industry.
The Decline of the Guilds and the Rise of Capital
The guild system fell into decline. Guilds had arisen when towns gained self-rule and put local industry under their protection. In fact the guilds had no special machinery for raising capital, buying goods in bulk from distant sources, using factory methods and division of labor, or reaching distant markets. From the thirteenth century on, guilds took on an aristocratic privilege and formed closed circles, and they narrowed the field so much for day-wage craftsmen that these had to throw themselves at the feet of capitalist employers to find work.
The capitalist's chief aim was profit. He also knew how to turn his savings into large capital, where and how to buy machines and raw materials, how to open mines, build factories, hire workers, divide and grade the work, reach foreign markets, steer elections with money to his liking and gain influence in governments. The new stocks of gold and silver prepared the ground for profitable investment, and American gold became European capital. With the rise of the capitalist system, competition flourished, business stirred, and a feverish search began for economical ways to produce and distribute goods; in these conditions there was no longer a place for the display of guilds plodding along their narrow old paths. The new method was far superior to the old in quantity of output, though not in quality, and merchants constantly sought to produce more manufactured goods to export in payment for the goods imported from the East.
Who Gained, Who Lost
The new and growing wealth lay mainly in the hands of merchants, bankers, manufacturers and their allies in government. A few landed nobles still held considerable capital through vast estates worked by hundreds of tenants or through supplying wool for the textile industry. But in general the landed aristocracy, squeezed between kings on one side and the trading towns on the other, was gradually losing its political influence and had no choice but to console itself with its family trees.
The losses from inflation fell alike on workers and nobles. From 1500 to 1600 the price of wheat, the only food of the poor, rose 150 percent in England, 200 percent in France and 300 percent in Germany. In England in 1300 ten dozen eggs cost four pence; in 1400 the same number cost five pence, in 1500 seven pence, and in 1570 forty-two pence. Wages also kept rising, but more slowly, since governments set them. In England, by the statute of 1563, the yearly wage of a hired farm hand was fixed at a few pounds, and board and lodging were given in addition to wages. On the whole the economic changes of the sixteenth century left the working classes poorer and politically weaker than before. With the export of the goods the workers produced, quantities of luxury goods were imported so that a small group of the rich might live in pleasure and abundance.
Class Conflict and Harsh Laws
Class war grew more intense than at any time since the revolt of Spartacus in Rome, and among its results we may recall the revolt of the Spanish communes, the Peasants' War in Germany and Robert Kett's rising in England. Strikes occurred often but were usually crushed by the alliance of employers and government. In 1538 the weavers' guild of England, under the supervision of the factory owners, passed a rule that a hired worker who refused to work under the employer's conditions would be jailed for a first offense and flogged and branded for a repeat. Under Henry VIII and Edward VI the "vagabond laws" were so harsh that no worker dared leave his job. A clause of 1547 provided that a healthy person who left work and took to vagrancy should be branded and given for two years as a slave to a local resident, to be fed only bread, water, a little wine and meat scraps, and that a repeat would mean branding again and slavery for life.
It is to the credit of the English that such laws did not last and were repealed after a short time; but they show well how harsh the spirit of sixteenth-century governments was. George, Duke of Saxony, ruled that in his territory miners' wages should not rise, no miner could change his place of work, and no employer could hire a worker who had once caused disturbance and discontent in a mine. Child labor was expressly or tacitly lawful. In Flanders the lace industry was entirely in children's hands, and the law barred girls over twelve from that trade. On the other hand laws against monopolies, hoarding and usury were either ignored or evaded by tricks.
Religion and the New Economy
The Reformation favored trade and the new economy, while the Catholic church was spiritually at odds with every kind of "business": it held interest forbidden, held poverty sacred, condemned wealth, gave the guilds religious sanctity and added so many holy days for workers that in 1550 Catholic countries had a hundred and fifteen idle days a year. It can be said that this had a great effect on the slow industrialization and slower growth of wealth in Catholic countries. Theologians held that the church should intervene in setting laws to fix "just prices" for the people's daily needs, and supported it. Thomas Aquinas called the pursuit of wealth beyond personal need "sinful greed" and ruled that every surplus possession, "by natural law, should be spent on relieving the poor." Luther agreed with these ideas, but the general growth of Protestantism, without knowing it, cooperated with the capitalist revolution. Holidays tied to saints were abolished, and work and capital increased. Merchants and bankers supported Protestantism and in return the new faith kept its respect for them. Wealth won honor and standing, saving became a virtue, work was counted a condition of piety, and interest on a loan was permitted as a lawful reward for risking one's own cash.