Odd Lots - What Happened to Europe's Economy After the Black Death

Episode Date: January 4, 2021

It's been pointed out that, after the Black Death in Europe, real wages surged because there was such a shortage of labor in the aftermath. But what was the structure of the economy that allowed this transfer of power to workers in the first place? On this episode, we speak with Patrick Wyman, historian and the host of the Tides of History podcast, to get the real story of Europe's post-pandemic economy during the 1300s.See omnystudio.com/listener for privacy information.

Thanks for listening to Oddlots. Follow the show on Amazon Music for more future episodes or just ask Alexa, play the podcast, Oddlots on Amazon music. Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Wisenthall. And I'm Tracy Alaw White. The virus situation in the U.S. is extremely bad right now, but I feel hopeful that this, we're on the last wave. that thanks to the vaccine, that the light, there is some light at the end of the tunnel. Yeah. So we're recording this in mid-December, and I think the U.S. caseload keeps going up. It keeps going up in other places as well. So I think Europe, Germany, just posted its highest caseload on record. In Hong Kong, we have a fourth wave as well. I guess with winter setting in

in many parts of the world, temperature obviously has an impact, and we're seeing cases, and also, sadly, deaths go up as well. Can I say something, though, you might hear. I have, all right, I have something to say, which is, I read all these stories about, like, Hong Kong is under a new wave, or Hong Kong is under lockdown. But I got to say, like, it does not seem anything like the same scale here. And when I look at, say, your Instagram photos, not that you're out partying, but it does not seem as bad by any stretch even close. It seems like your definition of a wave is not our definition of a wave. Yeah, our definition of a wave, and this is our biggest ever wave, it's about a hundred new cases per day. So really a fraction of what you're seeing in other countries. And our lockdowns

are kind of weird and different because, for instance, you're allowed to eat in a restaurant, but they all close at 6 p.m. and it's only two people per table. So you can go out. And of course, you can still, this is what I quite like about Hong Kong, you can still get drinks and just drink them outside after 6 p.m. And because the weather's quite mild here, it's fairly enjoyable to do that. But you're still supposed to do it in groups of a maximum of two people. So there's literally nothing like our waves. And people are still doing boat parties, right? Well, they crack down on those. So they set up a hotline. They set up a hotline so that people could report if they spotted someone holding a,

they're called junk parties here. If people decide to hold a junk party because they can't hold a party in a restaurant or a bar, they hire a boat, they go out to sea and everyone drinks and swims and sunbates. Now there's a hotline so you can report that behavior. You're not supposed to do it. All right.

All right. Anyway, this is a big digression, but I just wanted to get this off my chest. That when people's like, oh, Hong Kong, isn't it? It's worst wave yet. That it's like, it's nothing. Hey, look, it's all relative.

Yeah, that's my point. And it's relative to us. It's nothing. Anyway, so that, of course, raises questions. If the end of the coronavirus crisis COVID is in sight, that of course raises questions about what the post-crisis world, the post-COVID world looks like. Right. And I think this is something that we've touched on in a few episodes now, but one of the big questions is exactly what it means for the labor market, whether we start to see. maybe wages pick up again. Maybe we start to see workers demand other benefits like work from home because they've all been so used to it over the past 12 months or so. Big discussion point. Right. So there have been some articles that I've seen from time to time talking about a past pandemic in which it was much worse than this one. And at the end of the Black Death, In the mid-1300s, there was actually a pretty big spike in wages because there was a labor shortage. This is not anywhere near as sort of deadly. It's extremely bad, but it's not black death pandemic levels. So we're probably not going to get some massive labor shortage.

But I, but even still, like, I'm sort of curious about this time because none of these things have read are totally satisfying because on the one hand, yes, I understand there's, there's a labor shortage, but on the other hand, you think there'd be this sort of like big broad impairment to the economy, so it's not totally clear to me why wages went up. So even though I doubt it's that applicable to now, I am still very curious to understand what really happened when that four-year pandemic came to an end. It's a really interesting question because the economic impact of the Black Death is sort of famous for leading to the end of feudalism. So supposedly there was such a big supply shock to labor. I mean, England lost half its population that wages started to go up.

And serfs who used to be completely at the will, working at the will of a lord, started to demand rights. And eventually you had the sort of end of the feudal system. I think a lot of your confusion probably comes from a misunderstanding of that particular economy, or you're thinking about it like the modern economy. I have to say, I've been reading Pillars of the Earth recently. So I feel I am now an expert on medieval economies. I am very excited about this particular episode.

I think it's going to be a fun one. And even if the analogy between the plague of the Middle Ages and the pandemic now is a little bit off, it's still a really interesting point in time. And I think it's worth talking about. Very big tonal shift in this interview from us joking about junk boat parties to half. the population of England dying in a plague. Nonetheless, here we are. It was long ago. It was long ago. So anyway, I'm very excited about our guest. Maybe I'll just listen to you and our guest talk. I'm very excited about our guest. We're going to be speaking with Patrick Wyman. He's a historian. He's also a podcaster, the host of the Tides of History podcast,

and also an author. He has a book coming out about credit and finance in the 1500. So basically, the perfect Oddlots guest for this topic for this time. Patrick, thank you so much for joining us. Hey, thank you so much for having me, you know, first time caller, long time listener. Awesome. Love to hear it. So where to get started? How would you characterize the pre-Black Death economy in Europe? Tracy talked about the feudal system, but I kind of have some vague idea of what that means. But how did the economy work pre-crisis? Okay. So there are a couple of aspects. to bear in mind when thinking about the pre-plag economy. And one is kind of the broad context where thinking about futileism, whatever exactly that's supposed to mean, that's something specialists debate in this field. Not that there's anything. Specialists don't debate. But basically, a system in which a property-owning class has tenant farmers working their land for them, who are not free to come and go as they please, and who owe the landlord labor services.

So not just that they pay the landlord rent. They also owe the landlord service on the land that the landholder does not lease out. They're called the domain land on an estate that these poor, that these poor serfs who, again, not free to come and go as they please, they are semi-free at best, that they have to work the Lord's land. They have to clear out ditches. They have to plant crops. They have to harvest crops. They have to do stuff like that. The idea, the basic narrative of the Black Death is that it makes that system.

them less tenable because these formerly inserved formerly semi-free people now do not have to do that labor service. They can just run off. They can go somewhere else. They can go to a town. They can get a job working in a trade, something like that. So that's the kind of the broad, long-term shift that people talk about with the Black Death and its impact on the European economy. The Black Death comes at the end of what we call the Commercial Revolution. So the couple of century period leading up to the Black Death sees an enormous expansion of the European economy. It's the period in which most of the tools that we're familiar with that kind of define an advanced economy, things like widespread access to credit, high levels of international trade, resident merchants

who are capable of doing business over long distances. That's the time when these things all across Europe are coming into play. Now, the reason for that is fundamentally demographic, that this is a period when the climate is really good. Crop yields are good. So there's a population boom. There's new land cleared. New land comes under cultivation.

these lords are able to extract lots of labor dues and rents from their tenants because there are a lot of tenants and there's not that much land. So if you control the land, you can get a lot from it. Now, by the time the Black Death rolls around in the middle of the 14th century, that expansion is over. The economy has peaked. It's already in a little bit of decline by the time the plague hits. So the largest firms in Europe prior to the Black Death, what are called the super companies, which are mostly based in Florence, and are involved in a whole host. of activities all over the continent, the super companies have already gone bankrupt by the time the black death hits. So the economy is already in trouble when the black death hits, and then you get this

enormous wave of mass death. Before we get into that, could you maybe, so you've laid out the, I guess the labor side of the economy very, very well. Can you talk a little bit about like the demand side? What exactly were people producing at that time and what was driving the economy? Because I think this is going to feed in later to answering Joe's question. Yeah, so it's almost entirely an agricultural economy. We can write really interesting things about the cloth trade, about the long-distance trade and luxury goods, and it's not that those things don't matter. They do matter for reasons that I think we'll probably end up coming back to over the course of our chat today, but it's primarily an agricultural economy. Depending on the region you're talking about, there is no region

in Western Europe specifically that has more than 20, at most 30 percent of the population. population living in towns. Everybody lives in the countryside. Almost everybody who lives in the countryside is involved in agricultural labor in some way, shape, or form. So there is way, it's not that the economy is simple. There is wage labor. There are local, regional, and international trade routes. There is a trade in agricultural produce that goes over long distances that uses sometimes quite sophisticated commercial tools to do that, application of credit, accounting techniques, things like that. But it is primarily an agricultural economy. And so the, that That's why the population increase and bringing new land under cultivation matters so much.

The more people you have, the more agricultural produce you're putting out there, the more the economy grows, the more surplus there is for lords to extract, which they can then use for things like long distance trade and luxury goods. I think this is like a key element here. So the consumption of all this agricultural production was exported. in, so the lords would export it elsewhere in exchange for something not in agriculture. Well, either the, or they would extract cash rents from their tenants and they would use the, and they would use the combination of that. And yeah, sure, maybe if you're, so you're the lord of a manner near London, you, whatever surplus you grow from your land, maybe you sell that to, maybe you sell that to merchants who are, who are doing business in London. And then you have the

benefit of like all of your tenants are also paying you cash rent for their for being on their land. So you've just got, it's a good time to be a lord. If you're a lord before the plague in like the 1330s, 1340s, great time to own land, great time to be extracting rents. Just out of curiosity, how big, what kind of city was London at the time? So London is the biggest city in England, but it's not a big city by global standards. In fact, there are no real big cities by global standards in the 14th century in Europe. Europe is kind of a backwater. It's not as much of a backwater as it becomes in like the mid-15th century, but, you know, London has 50,000 people, 60,000 people at most. Paris has 60,000 to 100,000. And those are the big cities. The biggest cities are

places like still not so much Constantinople anymore after the, after the Crusader conquest at the beginning of the 13th century. But places like Baghdad, again, probably declined a little bit after the Mongol conquest, but cities in Central Asia, South Asia, definitely in China, were dramatically larger. Also, some places in the new world were dramatically larger than European cities at this point. You can get the news whenever you want it with Bloomberg News Now. I'm Amy Morris. And I'm Karen Moscow here to tell you about our new on-demand news report delivered right to

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we're all over the world. Listen to the latest from Bloomberg News Now on Apple, Spotify, or anywhere you listen. So in 1348, I think that's when the plague actually arrived in England. At the time, it has something like 5 million people in total, 50,000 in London, as you just mentioned. By the end of it, I think the population is something like half of that. Can you describe exactly what the impact was of the Black Death on, I guess let's focus on England at the moment, but I'm curious about the rest of Europe as well. Okay. So the death toll is regionally variable, but high. Basically, so trying to do medieval demography is hard because there's never just like a list of people who live in a particular place and you can say, ah, this person died at this particular time,

this many people died in the plague. So you're left to reconstruct demography on the basis of tax records, records of landholding, sometimes legal records. Basically, they're not giving you the stuff you want to tell like how many people live in a particular place at point A and how many place live at point B. What's the likely death rate? The better the data is for the period around the black death, I think it's notable that the higher the death rate looks. So when the data is not especially, like the more direct the relationship between the demographic data and the actual population, the fewer kind of proxies that you have to work through to figure out how many people live in a place, the higher the death toll looks. So where our data is best in places like

Savoy, Northern Italy, some parts of England, the death toll looks like it's 40 to 60%. In places where the data isn't as good, it looks like it's more like 30 to 40%. But how? How much of that is an artifact of the sources that we're working with and how much of it is actually reflective of regional variation in death toll is hard to say. But yeah, I mean, I think it's safe to say 40 to 50% is a good kind of low end number and potentially much higher. But the key point about death tolls when we're talking about the black death is it's not just that people die. It's not that the plague comes once. It's that it keeps coming back. So the fundamental shift that the plague puts into place and which continues throughout the rest of the 15th century.

is a shift to what a demographer would call a high mortality regime. So you still have high fertility. People are still having lots of babies, but the death rate is just high enough that it prevents the population from rebounding. So it's not just that you have a one-time demographic shock. It's that people die. They keep dying and they keep dying. So you don't get like even in a pre-modern society where population growth rates are really

pretty low compared to what we're used to in the 20th century, 21st century. you would still expect if you have a sudden abundance of land and resources in the aftermath of a mass mortality event for populations to rebound fairly quickly. That doesn't happen after the plague. And that's the key demographic fact of it. That's what shapes the labor markets not just in the middle of the 14th century, but into the 15th century and beyond. See, now I've been reading forever Amber as well. So I feel I am also an expert on plague in the 17th century in England. But yeah, you're absolutely right. plague keeps coming back. And just on that point, one of the things that you learn, I guess, from historical fiction is the plague, you know, it doesn't just cause people to die in a sort of similar way to what we're seeing now with pandemic lockdowns. It causes big chunks of the economy,

or it seemed like it, to kind of come to a standstill because no one wants to go out of their house. They're not exactly sure how the plague is actually spread. They have family members who are dying back at home, who might be, you know, locked in a room. somewhere. What does it actually look like when plague hits a town in the middle ages? What tends to happen? So you do get quarantines. So Milan quite famously, mostly avoided the first terrible wave of the plague, the one that caused so much death and destruction across northern Italy, because they basically bricked up any plague cases in their houses. They just, they, they're like, okay, tough luck. You're stuck in there. You're going to die. So Milan emerged from the

plague in pretty good shape as a as a city with its population still almost entirely intact in that first wave now plague does show up in Milan afterwards so it's not like they escape forever but there are things i mean medieval people did not have germ theory so they did not understand what was causing this stuff but they did understand that there was a correlation between personal contact and the spread of disease so they did try and avoid contact with other people they did try and stay isolated. They did have some sense that the disease was being spread in that fashion. It's not entirely clear, even today, we still know less about how the black death was transmitted than we wish we did. There are still debates about this. Scholars still do not agree on every aspect of it, but whether

it's bubonic or pneumonic plague, what role various vectors of transmission played, whether it's fleas on rats, whether it's human fleas, whether it's primarily airborne. There are lots of debates about this. But anyway, yeah, so lots of economic activity does grind to a hall. And there, you read primary source accounts where it's like crops are left to weather and die in fields. Cattle are running around starving because nobody's feeding them. People are, people are dying in their houses. I mean, it's funny. You mentioned the the junk parties. I couldn't help but think of Bacacaccio's decamaran. So one of the great literary works of the Middle Ages is this dude Baccio. And the DeCamarin is this series of stories that are all like the kind of the Sunday.

premise of it is that they're all hanging out at a country house outside Florence while the plague is happening and they're just amusing each other by telling each other stories. So they too had junk parties just, you know, at a nice villa and a nice Tuscan villa instead of out on a junk. I guess I'm actually still curious just about the functioning of society. You mentioned like, okay, crops were left to rot. There were stories of animals that were starving. From the perspective of these feudal lords, how did their, lives change? How did they try to get by and operate? I mean, what did they do? So, lords, as best we can tell, the higher up you were in society, the better off you were

when it came to actually dying of the plague. But in the- Sounds familiar. Yeah, yeah, it's not, some things never change. After the plague, landlords suddenly see their leverage over their tenants dramatically decreased. So it's both a supply shock to the labor market, but it's also a demand shock. The thing is, the demand shock is nowhere near as severe as the supply shock is, because I mentioned that population growth a little while ago. I mentioned that there are all of these kind of landless tenant farmers. Now all of the sudden, lots of people have died. There aren't nearly as many people who need to eat agricultural produce as there were a couple of years beforehand. So suddenly there's there's a lot more land available.

You don't need the price of land drops dramatically. The price of rent falls dramatically. And the price of labor goes way, way up. So if you're a landlord who wants to get your peasants out there to come clear out a ditch for you, they're not going to do it. They're going to go and they're going to find their own little patch of land. They're going to go to a town to work for wages. There are all sorts of things. This is when we see some of the first laws trying to restrict the price of labor.

we see these in England in the 1350s, that they just couldn't enforce them because, you know, what the labor markets were going to do is what the labor markets were going to do when you have a shortage of labor and still exceptionally high amounts of demand. Because people still have to eat. You still need to pay for agricultural labor to harvest crops, to care for livestock, to do all that stuff. It's just that they're not going to do it for what they would have done it when there were twice as many people. Right. So I saw the text of at least one of these laws, and it was something like, you can't pay. a laborer or a farmer more than you would have done like last year or in like an average over the past five years or something like that. So it was pretty like pretty explicit what they were trying to do here. I just wanted to press you on one point. So we talked about how the economy is mostly agricultural at this point. There's all this land available. How did that feed into productivity

at the time? Because I imagine when you had a higher population earlier on, every, was trying to get as much as they could out of the land. They were probably farming a land that wasn't entirely ideal. And now you can kind of pick and choose, right? Maybe productivity goes up. Yeah. So that's a really interesting and a really good point. And so what happens is the marginal land that had been like a drained swamp or kind of rocky hillsides. All of that land had been in used to grow cereal crops because that's what's going to give you the most calories per acre. If you've got to feed a lot of people, what you've got to do is you've got to grow wheat. So diets before the plague were exceptionally dependent on wheat.

As you can expect, like, that's not a great diet for people to have. And I think there's probably some correlation between death rates in the plague and the fact that they were eating a diet that was almost certainly not optimal for strengthening your immune system. So there's that aspect to it. As the plague roars through, as people die, you can let this marginal land go out of wheat cultivation. You don't need to, suddenly you don't need to use this rocky land or this marshy land for that. You can use it for other things. And what they end up using a lot of this formerly marginal land for is stock raising, is for pasture land. For sheep, for cattle, diets get better after the plague because you have more land that you can be grazing these animals on.

You can keep the meat on the hoof. You can, you see an kind of, definitely in England, you see an expansion of the, of the wool economy, even beyond what it had been before. English wool had already been in high demand. That was one of the main sources of financing for the English government prior to the plague was the wool staple. But after the plague, it becomes even more important. You get in some regions of Europe, you get production moving out into the countryside because suddenly not every single peasant has to be working in the fields. You can have more specialization of labor. You can have more craft production.

You can see this. There are some regional studies that point to the specific way in which economies change after the plague. And basically, it's almost always in the direction of peasants have, peasants can do more things. They don't just have to grow wheat. They can raise stock. They can do crafts. Basically, they have a lot more economic opportunity. And they're much more likely to be able to own their own land or at the very least, lease their own land instead of working as low paid tenant laborers. Let me ask you. So, you know, like when this virus eventually is gone, like I have in my head, like, I'm going to fly to El Paso and rent a car and drive to Vegas and go to a casino for a couple of days. And, you know, I have this whole fantasy. I'll probably never get around to it because I have kids. So it's probably never going to happen. But like I like, you know, like I imagine it will. Did, you know, the black death was like far longer, far worse in terms of just the sheer like, you know, know, seeing half the people you know die. Did people have a party at the end? Was there like signs of like sort of like jubilation and new behaviors and people doing fun things because this awful period had come to an end? This is the pent up demand theory versus are people going to be saving forever because they're worried there's going to be a pandemic. Yeah, no, there was there was a huge kind of burst of consumption after the black death, an enormous burst of it. So there's a lot of anxiety, especially among churchmen in the second half of the 14th century, about all the

conspicuous consumption that people are doing. So part of it is pent up demand, but part of it is also lots of people died. There are lots of inheritances. So there's lots of money coming to people who may not have had as much money to spend before, who are suddenly like, if I could die in the plague next week, you're damn right. I'm going to pay for this amazing piece of art. Like, there's good reason to think that kind of the flourishing of early Renaissance art, the demand for that came from Penta, came from people who were like, okay, we have all these resources. Let's spend them on something. The way to do that is now we're going to compete with our fellow, you know, rich Florentine merchants by paying for art. So there's a kind of a material context to that specific aspect that I would imagine people are probably fairly familiar with that comes out of the plague. And one of the interesting things about this to get into the to get into the, to get into the, to get into the. the monetary aspects of it, is around the time of the plague, you don't have that much actual money in circulation. And you're getting to the point where there's almost a shortage of coins for people to use to carry out transactions. The plague kind of buys Europe about 65 or 70

years before that becomes a problem again, because suddenly the amount of coin in circulation per person is dramatically higher. If half the population's dead, you don't have nearly as much of a shortage. The bullying famine comes again, and that's another really important thing for kind of shaping the post-plague world in the early modern economy afterward. But at least at that point, suddenly the European economy is no longer cash poor. It's actually almost flush with cash. Actually, that reminds me, we haven't really spoken about this yet, but what did inflation look like in the aftermath of the plague? That's a really good question. I'm not sure I have a really good answer to it off the top of my head. All of those things that I mentioned are factors that play into it.

There's still, there is not as much of a trade deficit between Europe and the East as there had been 50 or 60 years before. There's not as much bullying leaving. Just the fact that there isn't nearly as much of a shortage of coin kind of reduced the need for non-coin tools to pay for money, to pay for things. But in the long term, you end up with the development of a lot of tools like book transfers, things like that, that allow you to function without as much money. The effect that that has on the money supply, it's a question I'm not super familiar with. But real quickly, what's book transfers? Okay. So book transfers are when you both, when you and the person you're doing business with, both have an account with the same, with the same banker,

or even what they didn't, what they didn't in like Bruges, which was kind of the center of trade in Northern Europe at this point, it was hostile owners who kept these, who basically kept accounts and everybody had credit with a, with a hosteler, which you could do in Venice, you go to the Rialto, you and the person that you're in a business venture with, both have accounts with the same banker, you just move the money from his account to your account or from your account to his account. So no actual cash has changed hands, but you've got a transaction. It's one of the things that, it's one of the innovations that allows you to speed up the

velocity of money in later medieval Europe without any sort of increase in the actual amount of coin in circulation or even a decrease in the amount of coin in circulation. So we started out this conversation talking about how pandemic experiences tend to be quite relative and, you know, one place might have a very different experience to the other. I'm curious when it comes to medieval Europe, my understanding is after the black death, England sort of set on this road of eliminating serfdom and moving towards something that looks a little bit more like a modern capitalist system where laborers were sort of free to go from one thing to the other. That didn't necessarily happen in other parts of Europe, even though

they went through the Black Death as well. Why do we think that happened? Why did England seem to have this economic trend accelerated in a way that maybe other places didn't. So this is the, this is a thing that economic historians have argued about a very great deal. If anybody knows pseudo-Arasmus on Twitter, he's the king of talking about the late medieval economy and the, and the rise of capitalism. It's a whole thing. It's a, it's a whole series of debate. So what I would say is that prior to the 16th century, it's very hard to talk about capitalism.

as a system anywhere other than maybe the biggest cities of the low countries, the merchants of London, northern Italy, merchants in Barcelona, places like that, southern Germany to the Hansa. So basically, you have, there are capitalists. There are definitely people who are trying to use their money in productive ways. But some of the baseline concepts that we associate with capitalism, that everything is, that everything is a, that everything is a, has a monetary value, that land is a commodity that can be, that has a monetary value and can be transferred from person to person, they weren't necessarily working with these same kind of baseline assumptions. So I'm a little uncomfortable with applying that term to it, but with that

set, with that caveat out of the way, I got to do the, I got to do the specialist historian thing real quick. Fair enough. With that caveat out of the way, I think that England was especially well-suited to take advantage of more intense inter-regional distribution in the later Middle Ages. So different regions after the Middle Ages, after the Black Death, because you have this enormous drop in population, and again, not everybody needs to be farming wheat anymore, you can have more specialization. England is really well-suited to expand its wool production. The cloth market is the cloth markets in the low countries where they're mostly are turning wool into finished cloth for export. Some wool also goes to some wool also goes directly to Italy to be woven there and then exported.

England is really well suited to take advantage of this. And because everything is in close proximity to London, which is a financial center, it's right on the North Sea. London is very tightly connected to the commercial centers of the low countries, which are some of the most commercially advanced places in Europe. there's a geographic aspect to it where London, where England is just really well suited to take advantage of these things. And it has a legal system that protects property rights, which is helpful. There's some demographic things going on. One of them being that women in England tend to have much later ages at first marriage. So there are more female wage earners in the economy, which is a sign of its dynamism. Even before marrying,

and starting a household, women in England, the low countries, to some extent, Northern Germany are much more likely to be participants in a wage-based market economy than they were elsewhere in Europe. So that aspect plays into it. There's a lot of things happening. It's really hard to separate out any individual thing. But if I had to point to one, I think it would be some combination of lots of wage earners, a monetized economy, much more fully than in other places in Europe. people were thinking in England in terms of the monetary value of the abstract monetary value of things. They weren't necessarily using the most advanced accounting practices, but kind of the mental

tools were there, if that makes any sort of sense. So even a peasant is thinking in terms of how much is, how much is my labor worth? How much is, even if I'm trading one commodity for another, we're doing so with a monetary standard in mind. So we're converting this thing's value to a monetary standard as we make this barter transaction. I think that's really important is just like even at the village level, there was lots of credit available in England. That's true all over Europe, that there are kind of informal systems for providing credit to people. But that was especially true in England.

We have lots of really good evidence for it that you could take out a loan on your land and you could use that money for productive investment. That's a thing that existed in England, not necessarily as common elsewhere. So I'm kind of, I'm loath to point to a single factor. But I think all of those things put together mattered a great deal. The distribution networks get much more intense in the later Middle Ages with more regional specialization. You have, even if the actual volumes of goods moving are not as high as they were prior to the plague, I think more people were participating in those kinds of regional and long

distance exchange networks. I think that matters a lot. I think more people were more closely tied into kind of broader systems of exchange. I'm not sure if that's a good answer, but I think it's a little bit of everything. I think all of those things matter to some degree. On April 4, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm.

Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts. This is Foundry, the killing of Bob Lee, beginning April 16. So you describe all of these sort of things that came about in the post-plague world, post-plag economy. Many of them pretty good, greater sophistication of money, more productivity, so forth. I don't draw like too many like comparisons or two hard lines between then and now. But one of the things that I feel about COVID and this crisis is that a lot of pre-crisis trends just got like supercharged and accelerated.

Like we're compressing five or 10 years of history into six months. And you see it with the rise of teleworking and telehealth and e-commerce and other, just all things. And asset values flying to the moon and interest rates plunging and interstate tax competition. that was already a thing pre-crisis, really accelerating with all the people leaving California, supposedly, to go to Texas. And so I'm curious, like, to what extent can we say that with the Black Death, that that had an accelerant effect of things that would have happened eventually or maybe things that were trending in that direction? and did that also have the effect of, I guess, rapidly pulling forward history that was inevitably on its path to unfolding at a slower pace? Yeah, I would not say inevitably, but those trend lines were definitely in place.

So I mentioned that like the Florentine super companies had already gone bust by the time the black death happened. The economy was already trending downward. The peak of population had probably already been passed already. the the landlord's ability to demand things from their tenants was already lower than it had been there were more peasants rebellions already even before the black death than there had been before so there's there's more unrest that whether that system could have survived in the same way without the black death I still think I still think peasants would have been better off in the long run even without that particular shock and I mean I think you can see this some of the same dynamics operating now it's like When something like this happens, there's no going back. People are not going to forget the thing that happened. Like, workers who have spent the last, you know, nine months working from home and like doing it are not going to forget that they like working from home. People who have been able to demand a small rise in wages are not going to forget that their wages went up.

People who, like me, moved states and are not going to forget that they liked moving states. Things like that. There's, you know, the, and the Black Death is much the same that, like, if you, come out of that as a laborer knowing that, like, you can tell your landlord that you're not going to work for him and what's he going to do, sick the bailiff on you? Well, you can punch the bailiff if he comes to get you. Like, you don't forget that that's happened. And I think that's the big thing is that, like, once this, once this stuff happens, it's then part of your collective experience. It's part of your expectations of how economic life is supposed to work in a way that it hadn't been before. And so that's the parallel, even if the inflection point itself is much different,

is that there is no going back. You can't force people back into the box they were in beforehand, back into their ways of thinking beforehand. I think you're going to see that, especially with state financing, fiscal stimulus. There's just, there's no going back on those fronts. Like, something, a switch has flipped. Well, any other, like, sort of like, last key thoughts, Patrick, of, like, points that you think people should really understand?

I think there's no underestimating how important the Black Death is to the later development of the European economy. Like I think the labor shortage is the the labor shortage that comes out of that, the kind of additional freedom that laborers have, it spurs things like an increased emphasis on labor-saving technologies. So I don't think there's a world in which you have the printing press without the black death because that's a labor-saving technology, not just in the sense that you have the attempt to save labor on that, but also the financial mechanisms that make it possible for you to fund the development of a printing press. Like it's a super capital intensive process. It involves multiple layers of transactions,

a whole lot of kind of delayed return expectations. I don't think that that whole process, not even the desire to have the thing in the first place, would have existed without the Black Death, without this increase in kind of ways of thinking creatively about investment, ways of moving money around, even in the absence of coinage. I don't think that any of of that stuff would have happened without it. So it's really the foundational event that gives you the early modern economy. So even though in the in the short term, there is a, there is a net drawdown in the European economy. The European economy is smaller after the black death. Europe is more of a backwater in the 15th century than it is in the 14th. That's like it's the

end of Eurasia. Like nobody wants to go there. There's, they don't export anything that's worth anything. That's why it's, you know, European ships traveling elsewhere at the end of the 15th, century and not vice versa, it's because they're the ones who need to go find things of value. But what happens during this really rough period, and also, somebody didn't talk about, the climate got worse, it got colder and more variable, crop yields went down. There's just incessant war in the later 14th and into the 15th centuries, the 100 years war just being the best known of them. Like, it's not a good time.

But the tools that develop during this period, especially fiscal tools, the things that states learn to do in large part in order to make war for longer and more efficiently. There's a whole bunch of stuff that happens in this period that's almost like a product of scarcity and having to think outside the previous economic box that gives you a lot of the developments that we see around 1500 and afterward, the things when we see, you know, quote unquote, the rise of Europe, the emergence of a capitalist system and eventually gives us the industrial revolution. So the black death was good.

I think if you made it through the black death and you could deal with the emotional fallout of half the people you know dying, you were likely to be better off in material terms than you were beforehand. Okay. It's cool. It's almost 700 years is past instead, so we can make, we can make Joe. It's not too soon. It's not too. It's not too soon. Patrick, thank you so much for coming on.

This is a real treat and just really appreciate you joining us. Hey, thank you so much for having me. It was an absolute pleasure. I'm a big fan of your show. I've learned so much about finance and the economy from listening to you guys. Thank you. Awesome. Well, we'll have to have you back after your books going on. Patrick, thank you so much. I appreciate it. Thank you. That was great. I really did have a lot of, like I was confused prior to this. Like, I genuinely didn't understand exactly. But the explanation of the sort of supply side changes. the labor shortage, the productivity shock, the new demand from previous peasants who weren't having all of their, all of their consumption, I guess, exploited or surplus exploited. I finally feel like he did such a great job putting it all together.

Yeah, he really did. And I thought the point he made towards the end about how a lot of this was, well, you know, some of these trends were sort of on the way. but the idea that the experience, the unusual experience of the Black Death is sort of stuck in people's minds and made them realize what was possible, this idea of, well, you can ask for more money or you can leave your Lord and go work somewhere else if you go far enough. Like, that definitely has resonance in the COVID period, I think. You know what it made?

Yes, absolutely. And I was just going to say, it made me think, like, we might be underestimating the change that's going to come out of COVID. I mean, like, you know, I think in many respects our lives will go back to something resembling normal. But it also seems like, you know, this has just been, it's obviously this period has not been as deadly as the black death was by any stretch. But it's been a global disruption to virtually everyone's lives on the entire planet

and somewhere or another for what's turning into a pretty extensive. period of time, it seems plausible that we aren't even like really, can't even really grasp the sort of ripple effects that an episode like this will have. I think that's fair. Although I do think you see some inklings of it. Your life hasn't changed. I know because you guys don't really have it. But for much of the world, from outside of...

Wait a second. Okay, I'm going to dispute that, but I'm going to dispute it offline. away from all bonds listeners. But I would say you are seeing, we've discussed this, right? You are seeing inklings of some changes, especially in the U.S., where there isn't necessarily a strong social safety net as in places like Europe. You don't have free medical care, things like that. I think 2020 is the year where quite a few people are starting to call for additional

government involvement in those sorts of things in providing extra unemployment benefits, fiscal stimulus, some sort of national health care, whatever. Like, you are seeing that in the U.S. Yeah. No, I feel like life is going to change. At least that's my feeling right now, December 17, 6.53 p.m. Eastern time if they're talking to Patrick Wyman, the life is getting charged. Okay.

All right. We'll come back to the question. And we'll have Patrick on again when he unveils his book. Yeah. Yeah. Okay. Shall we leave it there? Yep, let's save it there.

This has been another episode of the Odd Thoughts podcast. I'm Tracy Allaway. You can follow me on Twitter at Tracy Allaway. And I'm Joe Wisenthall. You can follow me on Twitter at the stalwart. Follow our guest on Twitter at Patrick underscore Wyman and check out his podcast, The Tides of History. Follow our producer Laura Carlson at Laura M. Carlson.

Follow the Bloomberg head of podcast, Francesca Levy, at Francesca Today. and check out all of our podcasts at Bloomberg under the handle at podcasts. Thanks for listening. I'm June Grasso, inviting you to join me for the Bloomberg Law podcast. Every weekday, we help you make sense of the legal stories that shape the nation and the world. Listen for complete analysis of the biggest court cases, the latest actions from Congress and regulators, and the legal moves driving the markets. From corporate law to constitutional law and from state courts to the Supreme Court. At Bloomberg Law, we go beyond the day's headlines. We speak with top attorneys, judges, scholars, and policy experts to break down what the rulings really mean. We do this every weekday, then bring you the best conversations in our daily podcast.

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