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Abstract: Although this paper is, ostensibly, a macro- and micro-economic historical study of competition in the West European woollen textile ind ustries, in France, the Low Countries, England, Italy, and Iberia (Catalonia and Aragon), and of their related wool and cloth trades, covering all of Europe and the Mediterranean basin, from the eleventh to early sixteenth centuries, this paper is actually focused upon four fundamental inter-related questions and theses set forth to furnish some answers to the problems posed: (1) It seeks to explain why the textile industries of the Low Countries -- Flanders above all -- gained, held, but then ultimately lost their dominance in the production and export of luxury woollen textiles, those based upon the production of fine English wools, the finest before the advent of improved Spanish merino wools, by the 16 th century (from sheep whose modern descendants provide the world's best quality wools today). (2) It seeks to show why, from the early 14 th to mid 15 th centuries, the majority of the prominent textile industries in Western Europe were forced to abandon export-oriented production of cheap, light, mass-market textiles, especially says and other semi-worsted fabrics, formerly sent to distant international markets, in order to concentrate more fully upon far higher-priced luxury woollen textiles (those with a far-higher value:weight ratio); and why the components of these industries were transformed from their former role essentially as passive price-takers to become, though fewer in number as survivors, aggressive price-makers, engaging in fierce monopolistic competition. The model employed to explain this industrial and commercial transformation is essentially a North-based transactions-cost model: to demonstrate that, for most of western Europe from the 1290s to the 1450s, the spreading stain of chronic, widespread and violent warfare, involving far greater state involvement in fiscal, monetary, and trade policies, raised the transport, marketing, and transaction costs of long-distant trade in cheap textiles to prohibitive levels: i.e. that so many of these West European producers found that only the trade in luxury textiles 'could bear the freight' and continue to be profitable, for much of the later medieval-era, at least for the few survivors. At the same time, changes in wealth and income distributions resulting from these structural economic changes favoured sales of luxury cloths. (3) It seeks to explain why and how the English cloth industry, producing good quality woollen textiles, but with an export trade aimed at lower-echelon luxury markets, finally gained supremacy, by the late 15 th century, over the Low Countries; and how the Low Countries's textile industries, forced to obey the law of comparative advantage, so successfully engaged in and prospered from a revived sayetteries industry based on producing, once again, those lighter, cheaper semi-worsted textiles. Contrary to the traditional theories that still ascribe the English success to a combination of rural locations and technological innovations (water-driven fulling-mills), this paper argue that the ultimate English victory was instead based upon: (i) the unintended consequences of fiscal policies, in tax differentials imposed on the wool- and cloth-export trades; but more so, given the century that it took the English to gain this victory, (ii) structural changes in the European international economy that brought about the restoration of relative security, demographic and economic revival, changes in income distributions and market demand, innovations in overland transport and marketing, falling transaction costs, and new continental trade routes, based on South Germany, the Rhineland, and the Brabant Fairs that favoured the English cloth trade over its chief Flemish, Brabantine, and Dutch (and Italian) rivals. (4) This paper also revisits the proto-industrialization thesis and the related debates about the advantages of rural vs. urban location: to show that even for the 'victorious' English cloth industry, and also for the Flemish sayetteries and related worsted industries, the chief participants in their respective international textile trades were fundamentally more urban than rural based (despite a rural-urban symbiosis in the production processes).
JEL Classification: F1;F2;F3;F4;H2;H3;J3;J5.K2;L1;L6;N2;N3;N4;N5;N6;N7