There are two central problems connected with the transition from Feudalism to Capitalism—from a system of production resting on serf-labour or ‘a subject peasantry’ to one based on hired wage-labour. The explanation of the decline of Feudalism with which we are commonly confronted is that a system rooted in so-called ‘natural economy’ was undermined, weakened and finally destroyed by the growth of trade and money dealings, which caused labour services to be commuted to a money-rent and encouraged commodity production for a wide market. Only if Merchant Capital turned towards production, and sought ways of investing capital in new forms of production, did it serve as an instrument of transition to Capitalism. A main factor in the decline of Feudalism in Western Europe, and particularly in England which witnessed a crisis of feudal economy in the late fourteenth and the fifteenth century, was the struggle of the small producers to loosen the bonds of feudal exploitation.