David Abulafia's discussion of the shift in the balance of economic power from the Mediterranean to the Atlantic included a revisionist account of the pandemic known as the “Black Death”. The plague certainly killed millions of Europeans (perhaps as many as a third of the total) but survivors among the skilled labour force benefited from this depopulation.

Scarcity of labour meant that those with a skill could command substantial wage increases and the consequent rise in disposable incomes had a major economic impact. Workers with money to spend stimulated an expansion in consumer demand and the goods provided became increasingly varied as well as more numerous. Those who survived the plague often inherited money and property from relatives killed off by the disease and these inheritors often rose in social stature as a result of the increase in their assets.

As the disease’s impact receded in the late fourteenth century living standards improved and economic confidence led to ambitious plans for business ventures in the emerging Atlantic sector. Of these, sugar production was perhaps the most important. Prince Henry ‘the Navigator’, Portugal’s pioneering ruler, gathered together the people and the resources that were needed in order to transform Madeira, previously an obscure island on the horizon’s edge.

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As an early colony of the Portugese empire, Madeira became a major centre for sugar production and exportation, and the island’s fifteenth century history is an example of European capital’s dynamic mobilityits eagerness to create commercial networks, and especially so in the very profitable luxury goods’ market.

Attitudes with regard to money remained nonetheless ambiguous, Abulafia argued. Medieval popes and rulers stated their aversion to money’s corrupting capacity while also being involved, at a more private level, in financial affairs. Hence the distinction, emergent in late fourteenth and early fifteenth-century Italy, between sinful usura (usury) and tolerable interesse (interest), literally ‘that which lies in between’ and which was regarded as a service charge between the borrower and the lender.

Abulafia argued that the doctrine of Purgatory became a popular belief  in late medieval Europe because it provided moneylenders with a get-out clause. Time spent in Purgatorythat ‘middle realm for the middle classes’ could be reduced if relatives gave money to the Church. Penitent souls could then be released. Abulafia proposed that this transaction amounted to an early ‘coming together of time and money’ with usury being tolerated since put to good use in the service of the Church.

During the audience discussion Abulafia examined the impact of these western European developments on the continent’s centre including Bohemia where vigorous expansion in the mining of  gold, silver, and copper  reduced European dependence on gold from the Muslim world. Warfare was another major element in the stimulation of industry and commerce. Milan and Nuremberg, major centres for the production of prestige armaments, gained in prosperity and international stature as  a result of the increased demand for more refined, and expensive, military hardware. Abulafia was sceptical on the question of whether early Islamic history might have provided capitalism with its ultimate origins.

The diffusionist argument in these matters is based on the observation that B follows A at a different point in time and place. And having detected similarities between the two phenomena it then concludes that B is the result of an influence that has somehow been transmitted from A. This need not be the case. Questions, problems and activities that are broadly similar in structure are quite capable of engendering  answers as a result of their own efforts. If these solutions seem similar then that is hardly surprising since they are responses to problems that have a lot in common. It is therefore the origins of A and B that explains their similarity. The economic solutions provided in fifteenth century Italy and seventh century Arabia were similar therefore because they were responses to lines of enquiry that had much in common.

In conclusion Abulafia returned to the effects of the Black Death and to the western European labour force whose seizure of a market advantage meant that the institution of serfdom went into terminal decline thereby inaugurating new opportunities in the history of prosperity.

The discussion was hosted by Hywel Williams, Senior Adviser at the Legatum Institute.

A Global Transition - From the Mediterranean to the Atlantic by David Abulafia - Download Transcript [PDF]

About the Speaker
David Abulafia is Professor of Mediterranean History at the University of Cambridge and a Fellow of Gonville and Caius College. Professor Abulafia's interests embrace the economic, social and political history of the Mediterranean lands in the Middle Ages and the Renaissance. His most recent book, The Great Sea, published by Penguin, explores the history of the Mediterranean from 22,000 BC to AD 2010. In 2011 Professor Abulafia received the Mountbatten Literary Award from the Maritime Foundation for this book, and in 2013 he was awarded a British Academy Medal for the ‘landmark academic achievement' which the book represents.

About the History of Capitalism
This new series of lectures, which forms part of the Legatum Institute's 'The Culture of Prosperity' programme, investigates the origins and development of a movement of thought and endeavour which has transformed the human condition. Capitalism's characteristic emphasis on freedom of trade and market expansion has encouraged social mobility, global exploration and intellectual curiosity. Wherever and whenever it has appeared across the world's continents capitalism has undermined monopolies, economic protectionism and restrictive practices. Our lecturers will therefore be assessing case studies in business history and the individual biographies of thinkers, writers and inventors as well as describing particular periods in the histories of cities, states and nations. Further information available here.

Previous Events in the History of Capitalism Series
Early Islam and the Birth of Capitalism - with Benedikt Koehler, February 2014