Towns, Trade, and Currency in the Early Middle Ages

The early medieval economy is often described in terms of ruralization and decline: the disappearance of the Roman cities, the contraction of long-distance trade, the fading of the gold coinage, the retreat of the population into self-sufficient villages. All of this is partly true, and it captures real features of the period between roughly 500 and 800. But it is also misleading. Long-distance trade did not disappear; it shifted, and it revived. Towns did not vanish; they were replaced by new kinds of urban centers. Coinage did not die out; it was transformed. By the tenth century, Western Europe was once again connected by an active network of markets, fairs, and merchant routes, and the recovery of the urban economy was one of the most important features of the late early medieval period.

This article surveys the urban and commercial history of the Early Middle Ages: the kinds of towns that existed, the goods that were traded, the merchants who carried them, and the currencies in which they were exchanged. For a snapshot of urban life, see the What Was Life Like in an Early Medieval Town?. For the means by which people and goods moved, see the How Did People Travel in the Early Middle Ages?.

The disappearance of the Roman city

In the third through seventh centuries, the urban network of the Western Roman Empire thinned dramatically. Many cities shrank to a fraction of their imperial size; many disappeared entirely. The reasons were several: the breakdown of the imperial tax state, which had been the principal source of urban revenues; the loss of the great aristocratic families, many of whom decamped to their rural estates; the raids of the Germanic peoples, which sacked cities and disrupted trade; the decline of long-distance commerce, especially in the West; and the conversion of the emperors to Christianity, which redirected the surplus of the cities from civic monuments to the Church.

The result was the disappearance of the classical city as it had been known in the first three centuries AD. The amphitheater, the forum, the public bath, the aqueduct, and the secular basilica lost their functions or fell into ruin. The amphitheater at Arles, the baths at Trier, and the forum at Rome survived in fragmentary form, but the cities that had grown up around them in the imperial period shrank. The classical city had been a center of consumption, of monumental display, of secular government, and of long-distance trade. The early medieval city, where it survived, was primarily a center of ecclesiastical government, of episcopal or royal authority, and of local exchange.

Yet the early medieval city was not nothing. The survival of Rome, Constantinople, Ravenna, Milan, Paris, Lyon, Bordeaux, Toledo, Seville, Barcelona, Naples, Salerno, and other Mediterranean and southern Gallic cities was an important fact of post-Roman life. In the British Isles, Canterbury, York, London, Winchester, and a few other cities remained important. In the Frankish north, the episcopal cities of Cologne, Mainz, Trier, Metz, Liège, and Utrecht continued to be centers of population, government, and trade. The recovery of urban life in the tenth and eleventh centuries would build on these older foundations.

The emporia of the North Sea and the Baltic

A new kind of urban center appeared in the seventh and eighth centuries, particularly in the regions of the North Sea and the Baltic. The emporium, in the strict sense, was a trading place: a port or a market that drew merchants from a wide area for the exchange of goods. The most famous were Dorestad, on the lower Rhine; Quentovic, near the modern Étaples in northern France; Hamwic (the predecessor of Southampton), on the south coast of England; London, which recovered as a major trading center in the late seventh and eighth centuries; York, whose rich coin finds testify to its importance; Birka, in eastern Sweden; Kaupang, in southern Norway; Hedeby, at the base of the Jutland peninsula; and the Wendish and Pomeranian emporia of the southern Baltic, such as Wolin, Jomsborg, and Staraya Ladoga.

These emporia handled the bulk of the long-distance trade of the period. Dorestad and Quentovic connected the Frankish heartland to England, Frisia, and Scandinavia. Birka, Hedeby, and Kaupang connected Scandinavia to the Baltic, to the Slavic world, and to the eastern routes that led to the Caspian and the Islamic world. London, Hamwic, and York handled the English end of the same trade, and they grew wealthy on the proceeds. The goods in question were largely luxuries: furs, amber, walrus ivory, slaves, and (from the East) silks, spices, and precious metals. They were exchanged for silver, which was the standard currency of the period, and which has been recovered in enormous quantities from Viking and Slavic hoards across Eastern Europe.

The emporia were not politically stable. Dorestad was burned and plundered many times, especially by the Vikings from the 830s on, and it lost its leading position by the late ninth century. Quentovic declined even earlier. The great emporia of the eighth and ninth centuries gave way in the tenth to new centers - the cities of the Rhineland, the new towns of Flanders, the trading posts of the Baltic - that would develop into the great cities of the High Middle Ages. For the expansion that made the Baltic trade possible, see the Viking Raids and Expansion.

Mediterranean trade and the rise of Islam

The Mediterranean was transformed by the Arab conquests of the seventh and eighth centuries. The conquests cut the Mediterranean in two. The Byzantine Empire retained the Aegean and the Black Sea, but lost the southern and eastern shores to the new Caliphate. The Visigothic kingdom of Spain fell to the Arabs in 711, and the whole Iberian peninsula was reorganized as al-Andalus. North Africa, the Levant, and Egypt became part of the Islamic world.

The new political division did not destroy Mediterranean trade; it rerouted it. Within a few decades, Muslim merchants were trading actively with Byzantium, with the Frankish ports, and (most importantly) with the ports of Italy, which became the chief intermediaries between Latin Christendom and the Islamic world. Amalfi, Venice, Naples, Gaeta, and (later) Pisa and Genoa grew wealthy on this trade. Amalfi had commercial treaties with the Muslims from the ninth century, and it established a fondaco, or trading post, in Cairo. Venice’s commercial relationship with Byzantium, formalized in the ninth and tenth centuries, gave it privileged access to the eastern trade. By the tenth century, the great port of Comacchio in the Po delta was handling the salt, fish, and slaves of the Adriatic trade.

The Islamic world was not only a market for Western goods. It was also the source of much that the West needed. The most important was silver. The silver mines of al-Andalus, and the silver flowing in from the east via Baghdad, supplied the coinage of the Islamic world, and a great deal of it was passed on to the Christian West, especially via the Iberian frontier. The silver dirham, in particular, has been recovered in enormous quantities from Viking and Slavic graves and hoards, a striking testimony to the volume of the eastern trade. Other goods - silks, spices, perfumes, paper, citrus fruits, sugar, cotton cloth, glass, ceramics - also flowed into the West in increasing quantities, and they transformed the consumption patterns of the late early medieval elite.

Coinage and the silver economy

The most striking feature of the early medieval monetary economy is the disappearance of gold from the West and the dominance of silver. The gold solidus of the late Roman Empire continued to circulate in the Mediterranean for some time after the Arab conquests (the Arabs inherited and continued the minting of gold), but in the Frankish world, in England, and in the rest of the post-Roman West, gold coinage essentially disappeared. The basic unit of exchange became the silver penny, or denarius. The Frankish penny, struck from the late seventh century on, set the standard for the West; the Anglo-Saxon penny, modeled on the Frankish, became the standard unit of the English economy; the Spanish penny, struck by the Christian kings of the north in imitation of the Islamic dirham, was the basis of the Iberian economy; the denaro of Italy, the penny of the Rhineland, and the penny of Flanders all circulated in their respective regions.

The silver economy was real, but it was limited. In the eighth and ninth centuries, the bulk of ordinary transactions were conducted in kind: in grain, in livestock, in labor, in small metal objects that served as bullion. The penny was a high-value coin, used primarily in long-distance trade, in the payment of royal and ecclesiastical dues, and in the settlement of large debts. Local exchange depended on the silver content of the coin, on its weight, and on its reputation. A silver penny cut in half was a halfpenny; a small clipped fragment was a farthings or fourthling. The need to weigh and test the coin was a major feature of the period’s commerce.

By the tenth century, the silver economy was reviving. New mines, especially in the Harz Mountains of Germany, were opening up, and the silver supply was increasing. The Ottonian kings, the English kings, and the counts of Flanders, among others, were issuing large quantities of coin, and the circulation of silver was widening. By the eleventh century, the use of coin was spreading to ordinary transactions in many regions, and the medieval monetary economy was being established. For the broader context, see the Towns, Trade, and Currency and the account of the Carolingian Empire, which standardized much of the Western coinage.

The merchant class

The merchants of the early Middle Ages were a varied and often foreign group. In the Frankish world, the great international merchants of the eighth and ninth centuries were often Syrians, Greeks, Jews, and Lombards, who traveled with their goods from emporium to emporium, lived in separate quarters of the towns they visited, and operated under special royal protection. The Frankish kings issued the capitulary known as the Missi decree of 805, which attempted to regulate the activities of these foreign merchants, and the Council of Meaux in 845 required them to take an oath before the local bishop.

Over time, native merchant communities developed. The Frisians, in particular, were active in the trade of the North Sea from the seventh through the tenth centuries, and their name is preserved in many place-names along the coasts of England, France, and Germany. The Viking merchants of the eighth through tenth centuries took the trade of the North Sea and the Baltic into a new phase, opening up the river routes of Russia and connecting the Atlantic to the Black Sea. The Slavic merchants of the Dnieper and the Volga, especially the Radhanite Jews, were the intermediaries between the Islamic world and the Slavic north. By the tenth century, Italian merchants - especially Venetians, Amalfitans, and Pisans - were the chief carriers of Mediterranean trade.

The merchant was an ambiguous figure in early medieval society. He was necessary, because the goods he carried were needed and the markets he served were essential. He was also suspect, because he was a stranger, because he was often in contact with Muslims, Jews, and other outsiders, and because he dealt in money, which was widely viewed as suspicious. The Church, in particular, was uneasy with the merchant’s trade, both because of the traditional patristic suspicion of commerce and because of the practical problems of usury, the lending of money at interest. By the eleventh and twelfth centuries, the merchant class would develop a much stronger sense of identity, with its own guilds, its own patron saints, and its own self-justifying ideology. In the Early Middle Ages, the merchant was a more marginal figure, but a vital one.

The early medieval town

The early medieval town was a place of very mixed character. The old Roman city, where it survived, was dominated by its cathedral, its bishop’s palace, and the old city walls. Around them clustered the houses of the clergy, of the surviving aristocracy, of the craftsmen and merchants who served them. The old Roman streets and buildings survived in fragmentary form, and the new construction - in timber, wattle and daub, and thatch - grew up among them. The market was usually held in the old forum or a square near the cathedral, and the fair was the chief economic event of the year.

The new towns of the period were of several kinds. Some were royal or seigneurial foundations, often centered on a castle or a fortified residence. Some were monastic towns, growing up around a great abbey. Some were episcopal towns, growing up around the cathedral and the bishop’s lands. Some were commercial towns, growing up around a market, a port, or a road junction. By the tenth century, new towns were being founded in many regions, often by lords who wanted to take advantage of the reviving economy. These new towns were typically given a charter, a set of customary rights, and a market, and they were expected to develop into the cities of the High Middle Ages.

The population of an early medieval town was small by later standards. A large episcopal city of the ninth century - Cologne, Paris, York, Milan - might have five to ten thousand inhabitants; a smaller market town, a few hundred. By the eleventh century, the population was growing rapidly, and the great cities of the medieval period were beginning to take shape. For a sense of the daily life of an early medieval town, see the What Was Life Like in an Early Medieval Town?.

The revival of trade in the tenth and eleventh centuries

By the late tenth century, the recovery of the European economy was unmistakable. The silver supply was increasing, the population was growing, the great estates were being reorganized, and the network of markets, fairs, and merchant routes was expanding. The Italian maritime republics were beginning to dominate the Mediterranean trade. The fairs of Champagne, in northeastern France, were becoming the chief meeting point of the north-south trade. The towns of Flanders - Bruges, Ghent, Ypres - were growing rich on the wool trade with England.

The recovery was not uniform. Some regions - the interior of Scandinavia, parts of the Slavic world, the highlands of Britain and Iberia - were still largely rural and largely self-sufficient. The great commercial centers were on the coasts, on the great rivers, and at the major road junctions. But the trend was clear, and it laid the foundation for the commercial revolution of the High Middle Ages, with its new cities, its new merchant class, its new financial instruments, and its new forms of government. For a fuller picture, see the Towns, Trade, and Currency in the Early Middle Ages and the account of the Byzantine Economy and Trade, which provides an important contrast.