Dr Shami Ghosh | A New, Evidence-based Perspective on How Capitalism Developed in Europe

May 1, 2024 | Arts, Humanities & Social Sciences

The political and economic system of capitalism is dominant in the Western world. But how did we get here? Dr Shami Ghosh, an associate professor in the Centre for Medieval Studies at the University of Toronto, is challenging influential perspectives on the development of capitalism in Europe.

The Origins of Capitalism

Capitalism is generally agreed to be a system based on a market economy in which the primary aim is profit. It is characterised by a (perceived) necessity for continual growth. Before capitalism, the system of feudalism (based on the exploitation of those who worked the land by those who owned it, without the mediation of markets) is thought to have prevailed across medieval Europe, spanning the 8th to 15th centuries.

Dr Shami Ghosh, an associate professor in the Centre for Medieval Studies at the University of Toronto, provides a new perspective on how capitalism evolved across Europe to be the dominant force we see today. His approach turns away from equating market dependence with capitalism, and argues that while it is a necessary precondition for capitalism, market dependence does not create capitalism; the fundamental prerequisite is a shift in economic thinking towards an ideology of continuous growth. Uniquely, Dr Ghosh finds evidence of both market dependence and the change in ideology not only in England and the Netherlands but also elsewhere.

How Did Capitalism Develop in England?

The influential American economic historian Robert Brenner argued in the 1970s–80s and again in the early 2000s that the industrial capitalism of the 19th century grew out of the evolution of ‘agrarian capitalism’ in England during the 15th and 16th centuries. By this, he suggested that the social-political relationship between landowners (the holders of power) and peasants (those without power) fundamentally changed, leading to the emergence of a new ‘rural proletariat’ who had no direct access to any of their subsistence needs and nothing to sell but their labour; they were thus completely dependent on the market for survival. Brenner argued that prior to this, peasants were, in general, self-sufficient and, thus, not reliant on market forces to ensure their subsistence.

Dr Ghosh presents a new perspective, incorporating recent empirical work on England as well as comparisons with Germany, a region that has been largely neglected in the literature.

By Limbourg brothers – RMN/R-G Ojéda, Public Domain, https://commons.wikimedia.org/w/index.php?curid=108562

Rural Socio-economic Circumstances in Germany and England

Dr Ghosh explains that in many regions of Germany and England, rural socio-economic circumstances were similar from the 13th century onwards, not least in terms of population growth, the increasing productivity of agriculture, and especially more pronounced social stratification, leading to greater dependence on the market.

Dr Ghosh stands out among scholars in emphasising the importance of the emergence of ‘sub-peasants’ in both England and Germany. He defines peasants as those with access to sufficient land to provide for the subsistence of their households; sub-peasants were those with less land than this, or no land at all, who lived through wage labour, producing crops with high cash values for the market, textile production, animal husbandry for the market, and often changing combinations of all of these. Even those who held some land either had increasingly smaller holdings where inheritances were divided, or they had to make settlements with their siblings in order to inherit larger plots of land, with the siblings often being forced into sub-peasant status. However, such settlements led the peasants into debt, meaning that they had to realise a profit over the market in order to service the debt. Thus, even the peasants became market-dependent in order to access their means of subsistence.

Critically, Dr Ghosh proposes that England and Germany should not be considered ‘feudal’ from around 1350 to 1750. Rather than a system of peasants with direct access to subsistence and landowners who exploited them, Dr Ghosh argues that in this period – and more so at the end than the beginning of it – there was an increasingly large proportion of the population (already at least 30% by 1400 and around 50% by the 16th century in many regions; around 80% by 1750) who were dependent on the market for at least part of their subsistence needs and/or to ensure their social reproduction. (Social reproduction refers to the maintenance of social status across generations.) Thus, Dr Ghosh argues that already by the 15th century, we must understand the economies of these regions as not properly feudal but rather extensively commercialised while not necessarily even proto-capitalist (not, in other words, embryonic capitalism).

This extensive commercialisation did not represent a full transition to capitalism. Dr Ghosh explains, ‘In this period, market factors had an increasingly large influence on an increasingly large proportion of the population, and while it was still not a situation of complete dependence on the market for all inputs for all people (which is what we find in capitalist economies), over the course of the period, an increasing majority of people became increasingly dependent on the market for their biological subsistence and social reproduction.’

The upshot of these shifts was a high level of demand across social strata – which Dr Ghosh explains ‘arose from elites who needed to consume in order to maintain their social status, from the labouring poor who needed to buy food on the market, and from the growing classes in the middle who both needed and wanted different things from the market.’

Neither Fish nor Fowl

Dr Ghosh thus shows that Brenner’s concept of agrarian capitalism does not sufficiently explain the socio-economic system that emerged between 1400 and 1600. He argues that evidence for a genuine transition to capitalism appears from around 1800 in both Germany and England – centuries later than proposed by Brenner.

Dr Ghosh explains that ‘the beginnings of a consumer society and the birth of a true proletariat – developments that, coupled with the rise of a genuinely capitalist (that is, profit- and growth-oriented) economic ideology, signal the beginnings of capitalism; these developments are found in both Germany and England.’

The period 1350 to 1750 in both England and Germany was neither feudal nor capitalist but represented something much less amenable to straightforward classification.

By The Yorck Project (2002) 10.000 Meisterwerke der Malerei
(DVD-ROM), distributed by DIRECTMEDIA Publishing GmbH. ISBN:
3936122202., Public Domain, https://commons.wikimedia.org/w/

Against English (and Dutch) Exceptionalism

One of the most compelling elements of Dr Ghosh’s research is the detailed consideration of evidence not only relating to England but also from his test case of Germany. While historians have started acknowledging similarities between the Netherlands and England, Germany has never been part of the picture. Dr Ghosh is unique in suggesting that, in fact, many European countries underwent similar changes around the same time. As Dr Ghosh elaborates, ‘there were many possible trajectories, all of which, however, had some prerequisites for ending up with the industrial capitalism that emerged over the course of the 19th century, by the end of which Germany and Switzerland were leading industrial nations – and the stagnation in the Netherlands had begun already before 1800’.

Rural Commercialisation in Bavaria

Dr Ghosh notes that commercialisation had been widely accepted as occurring in rural England by the mid-14th century. However, little research had considered what had been going on in Europe more widely or directly compared this to developments in England. For this reason, he undertook a detailed investigation of the accounts of the Scheyern Abbey in Bavaria, spanning a period of seven years (1339 to 1358), similar to his earlier work on Ellwangen Abbey. He noted in his 2017 publication that the accounts for the Scheyern Abbey were ‘unusually rich’ in detailing incoming (e.g., rent) and outgoing (e.g., manufactured goods such as clothing) monies, and focused on this increasing monetisation as an indicator of the evolution of a market economy. His studies provide the first statistical bases for comparison with England, and he has unearthed close to 50,000 pages of unpublished sources from Bavaria alone that would provide an even more solid empirical foundation for such a comparison.

Using his own studies and earlier, more impressionistic work on Germany, as well as scholarship on England and the Netherlands, Dr Ghosh arrived at the important conclusion that we need to be careful in distinguishing between capitalism as a distinct economic and political system and market dependence, which need not possess the compulsion for continuous growth and profit. Most critically, Dr Ghosh argues that we need to view commercialisation as a process that can occur within societies with varied social, political, and legal structures, and acknowledge the key similarities in terms of increasing market dependence, despite the differences in other respects, a across many European (and indeed also non-European) regions.

By Limbourg brothers – RMN/R-G Ojéda, Public Domain,

The Question of Morality

What is much less certain, Dr Ghosh notes, is whether the co-existence of morality and capitalism has been sustained in modern times. His research suggests a fundamental shift in ideology, whereby farms became increasingly oriented to the market while the ideologies of profit, productivity, and growth worked against and eventually replaced the moral economy.

What Can We Learn?

The critical question for Dr Ghosh is: what can be learnt from his historical investigations? In the last decade, non-orthodox economists have started to explore the concept of ‘prosperity without growth’ (the title of a book by Tim Jackson). History, Dr Ghosh proposes, can support such endeavours: ‘In finding paths not taken in the past, we might be inspired to shake off our belief in the inevitability of landing up where we are. This would be the first step toward moving onto another, less destructive and wasteful and inequitable path for humankind’.






Dr Shami Ghosh
Centre for Medieval Studies
Faculty of Arts & Science
University of Toronto
Toronto, ON

Dr Shami Ghosh obtained his BA in German at King’s College London in 2003, MA and PhD in Medieval Studies from the University of Toronto (in 2005 and 2009, respectively), and Licence in Mediaeval Studies from the Pontifical Institute of Mediaeval Studies in 2016. He undertook postdoctoral positions at the University of Leicester, Magdalen College at the University of Oxford, and the Pontifical Institute of Mediaeval Studies in Toronto. On his return to the University of Toronto in 2016, he progressed from assistant professor to associate professor, the role he has held since 2021. Dr Ghosh’s diverse research interests embrace an in-depth understanding of social and economic history, global premodern history, and Germanic languages and literature. Dr Ghosh also undertakes extensive postgraduate teaching and supervision. His supervisees are already continuing his inspiring trajectory with publications in high-ranking journals and by securing prestigious fellowships, grants, and funding.


E: shami.ghosh@utoronto.ca

W: https://www.medieval.utoronto.ca/people/directories/all-faculty/shami-ghosh



Social Sciences and Humanities Research Council, Government of Canada


S Ghosh, Rural Commercialization in Southern Germany, c.1200–c.1500: Sources, Problems, and Potential, Mediaeval Studies, 2020, 82, 207–74.

S Ghosh, Rural Commercialisation in Fourteenth-Century Southern Germany: The Evidence from Scheyern Abbey, Vierteljahrschrift Für Sozial- Und Wirtschaftsgeschichte, 2017, 104, 52–77. DOI: http://www.jstor.org/stable/26590954

S Ghosh, Rural Economies and Transitions to Capitalism: Germany and England Compared (c.1200–c.1800), Journal of Agrarian Change, 2016, 16, 255–290. DOI: https://doi.org/10.1111/joac.12096

S Ghosh, How Should We Approach the Economy of “Early Modern India”?, Modern Asian Studies, 2015, 49, 1606–56.

S Ghosh, The “Great Divergence,” Politics, and Capitalism, Journal of Early Modern History, 2015, 19, 1–43. DOI: https://doi.org/10.1163/15700658-12342421

S Ghosh, The Imperial Abbey of Ellwangen and Its Tenants: A Study of the Polyptych of 1337, Agricultural History Review, 2014, 62, 187–209.

Podcast: https://www.listennotes.com/podcasts/introduction-to/ep06-the-great-divergence-yrKfkuUXn4Y/?t=499


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