From Gutsherrschaft to Grundherrschaft:

1. From Gutsherrschaft to Grundherrschaft: monetary and fiscal factors in the decline of English demesne AGRICULTURE and serfdom, ca. 1370 - ca. 1420 BY John H. Munro

2. From Gutsherrschaft to Grundherrschaft This paper offers a combined monetary and fiscal model, complementing and not displacing the standard demographic model: to explain the well known decline of both manorial demesne agriculture and serfdom in late-medieval England, from the 1370s to the 1420s

3. From Gutsherrschaft to Grundherrschaft The paper also utilizes the German paradigms of Gutsherrschaft and Grundherrschaft. Gutsherrschaft: a manorial regime in which the lord’s incomes were primarily derived from the commercial exploitation of his demesnes lands (in England: for grains and wools), using compulsory labour services of villein (serf) tenants. Grundherrschaft: a manorial regime in which the lord’s incomes were instead primarily derived from peasant tenancy rentals, most non-servile.

4. The Standard Demographic Model The standard ‘Ricardian’ demographic model has three related components: (1) The severe fall in population, following the Black Death (1348), so altered the land:labour ratiothat it; not only raised labour productivity and real wages, but also: so enhanced the bargaining power of labour that serfdom was no longer economically and socially viable.

5. Standard Demographic Model: 2 (2) Population decline also lowered the real cost of producing grains and thus their relative prices: by ultimately forcing the abandonment of high-cost marginal lands, so that grain was being produced on more fertile, more productive, lower cost lands (peasant as well as manorial) and with more productive and thus lower cost labour.

6. Standard Demographic Model 3 (3) Rents according to the Ricardian Model Ricardo argued that economic rent, from which land rents are derived, was a product of agricultural (grain) prices: prices determine rents, not vice versa Therefore, a fall in grain prices automatically led to a fall in economic rent on lands, and thus (ultimately) in manorial landlord rents

8. Standard Demographic Model: verdict Conclusions: In the face of these dual problems – falling grain prices and rising wages – combined with severe labour shortages, and higher costs of enforcing serfdom, manorial lords gradually abandoned direct cultivation of their demesnes, By leasing out parcels of those demesnes to tenants, without servile obligations, But necessarily at much lower rents (qv Ricardo)

9. Demographic Model: conclusions and thus also gave up demanding labour services from their villein tenants, since contractions in demesne holdings obviously meant that such servile services were generally no longer needed. Most historians agree that these and institutional factors largely explain the decline of English manorial demesne farming and serfdom.

10. Problem of the Time-Lag (1): 1348 to 1370s:‘Mind the Gap!’ (1) Bridbury’s Demographic Explanation (1973): ‘The Black Death was quite incapable of altering the social and economic relationships … because so much of the population was surplus by the fourteenth century that the early famines and mid-century pestilences were more purgative than toxic.’ Cites W. Arthur Lewis on ‘unlimited supplies of labour’ in which the MP of labour is either zero or even negative. Not until the 1370s (evidently) did population decline become severe enough to ‘activate’ the Ricardian model. Is this interpretation credible in terms of both theory and fact?

11. The Time-Lag Problem (2): 1348 to 1370s (2) The ‘Feudal Reaction’ Hypothesis Demographic/Institutional Model: Marc Bloch & Evsey Domar (and Brenner) on rise or expansion of serfdom: That, in reaction to declining population and consequent labour scarcities, manorial lords used their coercive powers to impose or strengthen serfdom (labour services) to prevent peasants from exercising potential market powers to drive up wages and drive down rents. Statute of Labourers: did wage controls restrict supply of free wage-labour  need to extract more servile labour? But depends on not only lords’ military and judicial powers but also costs of enforcing an expansion in servile obligations. Evidence for this ‘feudal reaction’ and its failure??

12. My monetary and fiscal model: My monetary-fiscal model is offered as a supplementary explanation, which also helps to explain: the long time-lag between the catastrophe of the Black Death (1348) and the much later ‘collapse’ of demesne farming, from the 1370s to the 1420s (approximately)

13. My monetary model The first part of the model, based on my earlier publicationson money, prices and wages during the ‘bullion famine’ era of ca. 1370- ca.1420, contends that the steep fall in agricultural commodity prices, along with a lesser fall in industrial prices, constituted genuine monetary deflation: a 25% decline in the Consumer Price Index (PBH: Munro version) See a graph for the ‘bullion famine’ ca. 1370-1420

15. My monetary model, continued Problem with the demographic model: the logic of the demographic model – as explained here – is that a fall in grain prices, produced by real factors, would have liberated more consumer income to be spent on livestock products (meat, dairy products, leather, woollen textiles, etc), thus raising their prices (nominal or relative?). yet the fall in wool prices (42%) and other livestock prices (35%) was commensurate with the fall in grain prices (39%)

16. Monetary Model: part 2 The second part deals with real factor prices: for labour and capital the undisputed fact that at least their nominal prices, in terms of wages and interest, did not fall during this era (experienced at least ‘stickiness’) and thus that these real costs rose severely for most manorial lords, ca. 1370-ca.1420 i.e., the deflationary ‘bullion famine’ era.

17. My Fiscal Model: part 3 The third part of the model deals with the particular case of English wool exports: the increasing burden of royal taxation, in fixed and not ad valorem export duties, especially from 1360s whose burden thus rose sharply with deflation (the fall in wool-prices) – rising from 31% of value of wool exports in 1371-75 to 50%, by 1391-95 (means) and these wools then constituted about 70% of production costs for England’s chief customers, the Flemish and Brabantine woollen draperies

18. My Fiscal Model: part 4 The fate of the English wool trade: 1370-1420 During this period, the wool export trade fell 61% in volume, which was only partially offset by the corresponding rise of the English cloth trade. At the same time, from the 1370s to the 1420s, the cloth production indexes for the Flemish and Brabantine draperies fell at least 80% (but these are tax farms and not actual output figures) The evidence for the changes in the English wool & cloth trades and the Low Countries’ draperies are in graphs that follow this discussion

19. The reaction of English manorial lords:1 some manorial lords -- and some peasants -- were able to survive by switching from both arable and wool-oriented sheep raising to the production of other livestock products Bruce Campbell’s agrarian statistics do indicate that many lay lords did shift their demesne production more and more from arable (grains) to livestock products, other than wools the recalculated PBH statistics indicate that they had good reason to do so: a shift in relative prices against grains and wool production in favour of producing other livestock products: meat (mutton, beef, swine), dairy products (butter, cheese, milk), leather (hides), etc.: i.e. such prices did not fall as much as did wool and grain prices

20. The Reaction of English Manorial Lords: 2 But many English manorial lords were not able to effect this transformation, which required more capital Their problems: they were faced with: rising real labour costs – so important in grain cultivation – and capital costs, and with sharply falling prices for almost all agricultural products, and possibly even steeper declines in wool sales since the evidence does not indicate that wool sales to domestic clothiers came close to compensating for falling sales to the Calais Staple merchants

21. The Manorial shift to Grundherrschaft Many English manorial lords – possibly more so ecclesiastical than lay -- found a much better economic solution in leasing their demesnes, with a shift to Grundherrschaft: Which thus meant leasing their lands, at fixed cash rents, without requiring any servile labour obligations Their real gains:for they then received fixed rental incomes, often for long terms, whose real value thus rose with deflation.

22. Reaction of Manorial Tenants: 2 The late-medieval English peasantry: gains or losses? The burden of rising wages and falling prices for grains and wools was thus transferred to their peasant tenants who probably still welcomed more land to work and more freedom, both economic and personal, a fair ‘trade-off’. But the peasants who evidently benefited the most were those with the best access to (higher cost) capital.