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The Premarket vs. The Market Economy: Preliminary Economics

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  • Pages: 6
  • Word count: 1259
  • Category: Economics

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There were certainly many factors that carried society away from the many pre-market economic methods that were applied in the Middle Ages. The premarket society was very antiquated; the economy stemmed from traditional values and methods, such as farming, slavery and the idea that “wealth tended to follow power” (21). You were born into a certain niche and life and your only job was the fulfill it; basically if you were born into the royal family you had money, you were set for life and if not, you basically had no shot. The market economy was very different from this in the sense that it encouraged a man to go out and earn a living for himself based on his own abilities; he could break from the traditional values that told him what he was supposed to do and actually follow the idea of the “self-made man”.

For such a major change in principle to occur, a significant shift in attitude was necessary. Spurring from new religious concepts, such as Calvinism, the market economy movement took off and was aided strongly by the growth of exploration and urbanization/ the enclosure movement. These factors helped play upon the natural human characteristic of selfishness; that is that every person internally wants to be better than the next guy, to make more money and be more successful than their neighbor. While this value was still present in the people of the pre-market system, these other factors helped to bring it to the forefront of their minds, thus leading to the major change in systems.

The religious state of mind at this time was very conservative in the sense that you were here to serve the church and to help others around you. Humbertus de Romanis, an ancient really sums up the churches general attitude quite concisely: “…it took only one to corrupt a marketplace, whereas every man harbored a devil in his own heart.” (41) The church frowned upon economic activity and because of its position of power in the community, it was very difficult to commercially expand. This attitude was somewhat genuine, but after one looks deeper, it appears rather hypocritical.

The church actually, through tithes and donations, had a hand in the most economic activity of anyone in Europe at this time. (41) It acted like a bank in a time where there was no such thing, and certain churches actually became very wealthy. The church became more involved as time went on and this clearly shone through to a society previously blinded by a group of beliefs that were not even followed by the church that set them forth. More economic pursuits through the church led to a general attitude where trade was more accepted.

The church impacted this movement not only through the actions that they physically took, but probably even more through the new beliefs that it started to preach. The biggest of these beliefs was brought to the front by John Calvin, a Protestant reformer, whose biggest belief was the concept of predestination, the idea that God decided who was going to heaven and hell before life even started. According to Heilbroner, the Calvinists lived by stressing “rectitude, severity and diligence” (42). The religion did not publicly condemn wealth seeking, like Catholicism did, but instead harbored an environment where business could prosper.

This did not mean that they sought to be gaudy in their pursuit of capital; the religion taught them to use every penny of their assets towards something that they needed. RJ Kilcullen said that the great Weber deduced that because the Calvinist “did not spend his money self indulgence, so he had nothing else to do with it but plough it back into business.” (7) Just as Weber says, everyone has an inner spirit driving them to make money and Calvinism just helps to bring that out. Not only did Calvinism promote the idea of getting wealthy but it stressed how to use this money: the idea was to make as much money as possible and use it all for important things, never to spend it frivolously (43).

This inner attitude started with religious beliefs but was supported through the actions of the people. The itinerant merchant and the economic backing for exploration displayed these beliefs and were big contributors in the transition to the market. The merchants originated as early as in the twelfth century and they basically brought goods from foreign lands with them around the world. They were selfish enough to go out and try and make money by bringing these items with them and they showed the people a new way to live. They showed them goods that the people never could have bought from the farmers in their homeland.

The enclosure movement was the leading factor in driving apart the feudal system, which previously held an extremely strong position in respect to the economy. The feudal lords woke up to the idea that instead of having these huge farms and using little strips in different parts, that they could be much more efficient by condensing their used land. This change in view showed that they were seeing their land as more than just a feudal system, but as a way to make some capital. Instead of having lands open to everyone, the lord “enclosed” the lands just to himself, eventually driving the serfs into the city, as it became economically impossible for them to survive on the manors. While it was not all positive, it did bring people into the city and jump started a need for more jobs, in turn supporting a larger economy. Not only did the movement take down the old feudal guard, but it began to encourage more jobs and a more capitalistic society in the city (46-47).

Exploration was unofficially a part of life before this transition but it became government sponsored at around this time. Through the middle ages, there were a limited amount of explorers simply because of the burden that the premarket put on some of its people because only the people born into money could afford to go out and explore. Once the governments began to embrace explorations, the leaders were allowed to bring crews and were able to plan trips to the unknown and at least know they were likely to survive and not die of starvation or because of inferior equipment. The monarchs sent these teams out in hope of claiming land, goods or any other mark that would make their affiliation more affluent. The expeditions of the greats, such as Columbus and de Gama, as well as others, led to increased amounts of cloths, spices, general goods and most importantly precious metals (40-41) These metals drove prices up and, in a sense, jumpstarted the economy; coupled with the idea of finding new worlds, supported the change in attitude and in turn strengthened the endurance of the new market.

The change to market society did not just happen overnight and it was clear that this new attitude was going to take time to spread. Driven by secular support (exploration) and especially religious support (new religions and beliefs), the masses eventually turned the corner and discovered what was already inside of them: a selfish need to better themselves. In present day this term is usually accompanied with negative connotations but in some cases, such as this one, it was absolutely necessary. Without man’s recognition of this inner need, the economy may never have made it out of the Middle Ages.

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