What societal needs and social and political trends were involved in the development of feudalism? What social problems did feudalism create, as well as solve, in western European societies?
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Feudalism in Europe became established as a reaction to the crumbling of the Roman Empire. When trade flourished under the Roman Republic, most of the wealth created was by trade. When the Republic became an Empire, trade still existed, but eventually through government restrictions and taxation, trade slowed, and finally, the Emperors, by destabilizing the currency, caused trade across the Roman world to shut down. Since wealth could no longer be created through trade, the merchant, or trading class, disappeared, and the social breakdown throughout former Roman provinces accelerated. The only source of wealth creation left was in the land, or in agriculture. Ironically, the focus on agriculture did not increase agricultural output or wealth; as there were no longer any markets to trade with, each "agricultural centre" became its own economic entity. The Roman aristocracy, tired of the intrigues of Roman government, retreated to their country estates, which became self-sufficient, and created the well-known feudal model of landowner and serf which lasted for nearly a millennia.
Feudal groups were defined as mutually reciprocal obligations for legal and military rights and privileges of land holdings between the three powerful classes of (1) kings/lords; (2) vassals, pledged to military service; and (3) fiefs, pledged to service that may be other than military service, though all three classes are defined as warrior nobility. The feudal agreement solved the social problem of land ownership and military collaboration.
Peasants were not part of the definition of feudalism since they were seen as degraded humanity, worthy only of providing a labor force for farming and military purposes, unworthy of notice, and incapable of making an honorable social contribution. Historians extended the concept of feudalism to include the peasant work force under the umbrella term "feudal society." Sir Arthur Conan Doyle (of Sherlock Holmes fame) has an excellent novel set in the feudal era called White Company that illuminates a social problems caused by the feudal system: neglect of degraded peasantry resulting in brutal treatment and starvation.
Whilst I agree with #2 in the stability that was created through feudalism, I would also like to point out that it also created massive inequality as serfs became dependent upon Lords for everything. Because there was very little restrictions placed on lords, it meant that more unscrupulous individuals were free to exploit their position of power and make the lives of their serfs very miserable indeed.
The most interesting thing I discovered about feudalism is that it wasn't a perfect "pyramid" with the lord or king at the top, the vassals & knights in the middle, and the serfs at the bottom. Often knights and vassals pledged themselves to more than one lord and serfs served several masters simultaneously. While it might not have been the perfect governing system, it did serve a purpose in that the lords (or vassals) provided a home, a job, and protection to the masses; in turn, loyalty, service, and protection were provided by the masses to their lords.
The major problem that feudalism caused was instability. Feudalism created a situation in which there were various lords always competing among themselves for power. Often, a lord or group of lords would feel powerful enough to compete with the monarch for power. Therefore, there was constant conflict during the time that feudalism was the major organizing principle in Europe. (A similar thing happened in Japan as well.)
This is a huge question, and there will be lots of responses addressing different aspects.
I'll start the responses by pointing out that the feudal arrangement provided protection and stability for the serfs living in western European societies. Within the walls of the castle was an escape from danger. Outside the castle walls, there was work on the lord's land and a place to live in return for the labor provided.
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