ABSTRACT
For successive generations of historians, medieval feudalism has been perceived as a regressive system that created a stable-state, low-productivity economic system, which was transformed only in the sixteenth century by an emergent capitalism. They regarded the regressive nature of the feudal economy as arising from the activities of the dominant landlord class who squandered the surplus they extracted from the bulk of the population, resulting in a lack of investment funds so that the latter could not transform their pitiful existence (Aston and Philpin 1985: chapters 1, 6-7, 10). Only in the sixteenth century, during the Age of Discoveries, was a new world economic system regarded as being created. The evolution of commercial capitalism in western Europe allowed the merchants of that region during the years 1500-1700 to exploit the rest of the world and establish the beginnings of European economic supremacy. This was realized finally in the industrial capitalism of the period from 1700 to the present day (Wallerstein 1974 and 1979). In this chapter it will be my task, therefore, to undertake an investigation into the nature of this capitalist system and to examine the mechanisms that caused major silver (and gold) booms to be translated, through the operations of financial-monetary markets, into fundamental changes in the ‘real’ economy.
