Economy in the High Middle Ages
The natural economy – direct exchange of goods for goods began to decline at the end of the 11th century and was gradually replaced by monetary economy or bartering – trading with goods and services in exchange for money. The progress of agricultural technics and tools such the use of wheeled plough, harrow, iron tools (spade, pitchfork, rakes), horse collar and horseshoe, water mill and other resulted in the more efficient production which increased the incomes of the feudal landowners who started to purchase more luxurious goods from the foreign merchants. The first merchants were Jews and Arabs and later Italians, while the trade goods mostly originating from the East were brought to the coastal cities like Venice, Genoa, Pisa and from there into the mainland. Thus the coastal cities eventually evolved into trade centers.
The peasants depended on the land but they also had to make and fix the clothes, shoes, tools, furniture and other items for their own needs as well as for the landlords. More talented ones became famous for their skills and eventually began to live exclusively from craft. The feudal lords freed them of work on the fields and moved them nearer to their castles and manor houses. At the same time some individuals gave up crafting and began to trade with other people’s items and services and thus emerged the local merchants who were a bond between the producers and consumers.