How did the rise of trade affect feudalism?

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In regard to medieval feudalism, trade and commercial endeavors were highly discouraged in order to maintain the status quo. Serfs were particularly confined to their fates, destined to work for their lord for their entire lives. Changing their occupations or even seeking other financial means was highly illegal. However, trade began to cause the development of towns by associations of merchants, which greatly challenged the feudal system.

Towns all across Europe, most exceptionally in the Italian peninsula, began to break free of the reign of the local lord. The system strayed away from a barter economy and began to rely on standardized money. Soon, it became the wealthiest merchants who had a great amount of power. This new type of commercial society greatly threatened the exploitation that the aristocracy had tried to maintain.

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While the rise of trade in the medieval period did not account for the decline of feudalism, it did have some implications on feudal relationships. Under feudalism, peasant farmers, or serfs, were tied to their lord and obliged to work on his land, often giving him a percentage of produce and obliged to use his grain mills and oven. If a serf traded outside of this agreement, he risked harsh penalties, like a hefty fine, which was often a huge burden for serfs. In this respect, feudalism completely discouraged trade and commerce. It relied on this exploitative relationship, based on loyalty and duty, for its survival and was threatened by any form of economic growth, among the serfs in particular. 

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