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Abstract: The paper's thesis is that the chief causes for the well-known `industrial crisis' of the traditional English textile towns during the period c.1290 - c.1340 was not the emergence of supposedly superior, lower-cost rural competition, as is generally supposed, but rather a far-reaching economic crisis that was afflicting their major cloth markets, those in the Mediterranean basin; and furthermore, that during this same era almost all of the textile towns, small and large, in northern France and the Low Countries were then experiencing an almost identical crisis. Most of these northern textile producers had been sending the bulk of their exports as price-takers', in the form of cheap, coarse, light, undifferentiated textiles, to the Mediterranean, where warm climates, mass urban markets, and -- during the 12th and 13th centuries -- low transaction costs had made such exports from north-west Europe profitable. From the 1290s, however, the entire Mediterranean basin and much of wester Europe were beset with incessant, spreading warfare, piracy, and political instability, which cumulatively led to rising taxes, transport, and marketing costs, while disrupting and contracting markets; by the 1320s transaction costs had risen to such a high level that northern producers could no longer profit from sending send cheap textiles over such long and hazardous routes to what had become saturated Mediterranean markets. For reasons explored elsewhere, by the 1340s, some Flemish and Brabantine towns had adjusted to this crisis by shifting production, as `price-makers', to very high-priced highly differentiated luxury woollens, which could better bear these rising transaction costs. From the 1360s, English cloth manufacturers pursued this same route, while enjoying a virtual monopoly on very high quality wools, and the protection of high export taxes on those wools to overseas competitors producing luxury woollens. In this era production from the now revived and expanding Englishcloth industry was in fact still much more urban than rural. The more pronounced though still gradual shift to rural cloth making took place in the following century, for reasons beyond the scope of this paper.
JEL Classification: N1;N6;N7;L1