The growing population in the 16th century and the larger concentrations of urban dwellers required abundant supplies of food. In the course of the century, wheat prices steadily rose; the blades of late medieval price scissors once more converged. Money again flowed into the countryside to pay for food, especially wheat. But the social repercussions of the rising price of wheat varied in the different European regions.

In eastern Germany (with the exception of electoral Saxony), Poland, Bohemia, Hungary, Lithuania, and even eventually Russia, the crucial change was the formation of a new type of great property, called traditionally in the German literature the Gutsherrschaft (ownership of an estate). The estate was divided into two principal parts: the landlord’s demesne, from which he took all the harvest, and the farms of the peasants, who supplied the labour needed to work the demesne. The peasants (and their children after them) were legally serfs, bound to the soil. These bipartite, serf-run estates superficially resemble the classic manors of the early Middle Ages but differ from them in that the new estates were producing primarily for commercial markets. The binding of the peasants of eastern Europe to the soil and the imposition of heavy labour services constitute, in another traditional term, the “second serfdom.”

In the contemporary west (and in the east before the 16th century), the characteristic form of great property was the Grundherrschaft (“ownership of land”). This was an aggregation of rent-paying properties. The lord might also be a cultivator, but he worked his land through hired labourers.

What explains the formation of the Gutsherrschaft in early modern eastern Europe? Historians distinguish two phases in its appearance. The nobility and gentry, even without planning to do so, accumulated large tracts of abandoned land during the late medieval population collapse. However, depopulation also meant that landlords could not easily find the labour to work their extensive holdings. Population, as previously mentioned, was growing again by 1500, and prices (especially the price of cereals) steadily advanced. Inflation threatened the standard of living of the landlords; to counter its effects, they needed to raise their incomes. They accordingly sought to win larger harvests from their lands, but the lingering shortage of labourers was a major obstacle. As competition for their labour remained high, peasants were prone to move from one estate to another, in search of better terms. Moreover, the landlords had little capital to hire salaried hands and, in the largely rural east, there were few sources of capital. They had, however, one recourse. They dominated the weak governments of the region, and even a comparatively strong ruler, like the Russian tsar, wished to accommodate the demands of the gentry. In 1497 the Polish gentry won the right to export their grain without paying duty. Further legislation bound the peasants to the soil and obligated them to work the lord’s demesne. The second serfdom gradually spread over eastern Europe; it was established in Poland as early as 1520; in Russia it was legally imposed in the Ulozhenie (Law Code) of 1649. At least in Poland, the western market for cereals was a principal factor in reviving serfdom, in bringing back a seemingly primitive form of labour organization.

No second serfdom developed in western Europe, even though the stimulus of high wheat prices was equally powerful. Harassed landlords, pressed to raise their revenues, had more options than their eastern counterparts. They might look to a profession or even a trade or, more commonly, seek at court an appointment paying a salary or a pension. The western princes did not want local magnates to dominate their communities, as this would erode their own authority. They consequently defended the peasants against the encroachments of the gentry. Finally, landlords in the west could readily find capital. They could use the money either to hire workers or to improve their leased properties, in expectation of gaining higher rents. The availability of capital in the west and its scarcity in the east were probably the chief reasons why the agrarian institutions of eastern and western Europe diverged so dramatically in the 16th century.

In the west, in areas of plow agriculture, the small property remained the most common productive unit. However, the terms under which it was held and worked differed widely from one European region to another. In the Middle Ages, peasants were typically subject to a great variety of charges laid upon both their persons and the land. They had to pay special marriage and inheritance taxes; they were further required to provide tithes to the parish churches. These charges were often small—sometimes only recognitive—and were fixed by custom. They are often regarded as “feudal” as distinct from “capitalist” rents, in that they were customary and not negotiated; the lord, moreover, provided nothing—no help or capital improvements—in return for the payments.

The 16th century witnessed a conversion—widespread though never complete—from systems of feudal to capitalist rents. The late medieval population collapse increased the mobility of the peasant population; a peasant who settled for one year and one day in a “free village” or town received perpetual immunity from personal charges. Personal dues thus eroded rapidly; dues weighing upon the land persisted longer but could not be raised. It was therefore in the landlord’s interest to convert feudal tenures into leaseholds, and this required capital.

In England upon the former manors, farmers (the original meaning of the term was leaseholder or rent payer), who held land under long-term leases, gradually replaced copyholders, or tenants subject only to feudal dues. These farmers constituted the free English yeomanry, and their appearance marks the demise of the last vestiges of medieval serfdom. In the Low Countries, urban investors bought up the valuable lands near towns and converted them into leaseholds, which were leased for high rents over long terms. The heavy infusions of urban capital into Low Country agriculture helped make it technically the most advanced in Europe, a model for improving landlords elsewhere. In central and southern France and in central Italy, urban investment in the land was closely linked to a special type of sharecropping lease, called the métayage in France and the mezzadria in Italy. The landlord (typically a wealthy townsman) purchased plots, consolidated them into a farm, built a house upon it, and rented it. Often, he also provided the implements needed to work the land, livestock, and fertilizer. The tenant gave as rent half of the harvest. The spread of this type of sharecropping in the vicinity of towns had begun in the late Middle Ages and was carried vigorously forward in the 16th century. Nonetheless, the older forms of feudal tenure, and even some personal charges, also persisted, especially in Europe’s remote and poorer regions. The early modern countryside presents an infinitely complex mixture of old and new ways of holding and working the land.

Two further changes in the countryside are worth noting. In adopting Protestantism, the North German states, Holland, the Scandinavian countries, and England confiscated and sold, in whole or in part, ecclesiastical properties. Sweden, for example, did so in 1526–27, England in 1534–36. It is difficult to assess the exact economic repercussions of these secularizations, but the placing of numerous properties upon the land market almost surely encouraged the infusion of capital into (and the spread of capitalist forms of agrarian organization in) the countryside.

Second, the high price of wheat did not everywhere make cereal cultivation the most remunerative use of the land. The price of wool continued to be buoyant, and this, linked with the availability of cheap wheat from the east, sustained the conversion of plowland into pastures that also had begun in the late Middle Ages. In England this movement is called “enclosure.” In the typical medieval village, peasants held the cultivated soil in unfenced strips, and they also enjoyed the right of grazing a set number of animals upon the village commons. Enclosure meant both the consolidating of the strips into fenced fields and the division of the commons among the individual villagers. As poorer villagers often received plots too small to work, they often had little choice but to sell their share to their richer neighbours and leave the village. In 16th-century England, enclosure almost always meant the conversion of plowland and commons into fenced meadows or pastures. To many outspoken observers, clergy and humanists in particular, enclosures were destroying villages, uprooting the rural population, and multiplying beggars on the road and paupers in the towns. Sheep were devouring the people—“Where there have been many householders and inhabitants,” the English bishop Hugh Latimer lamented, “there is now but a shepherd and his dog.” In light of recent research, these 16th-century enclosures were far less extensive than such strictures imply. Nonetheless, enclosures are an example of the power of capital to transform the rhythms of everyday life; at the least, they were an omen of things to come.

In Spain, sheep and people also entered into destructive competition. Since the 13th century, sheepherding had fallen under the control of a guild known as the Mesta; the guild was in turn dominated by a few grandees. The Mesta practiced transhumance (alternation of winter and spring pastures); the flocks themselves moved seasonally along great trailways called cañadas. The government, which collected a tax on exported wool, was anxious to raise output and favoured the Mesta with many privileges. Cultivators along the cañadas were forbidden to fence their fields, lest the barriers impede the migrating sheep. Moreover, the government imposed ceiling prices on wheat in 1539. Damage from the flocks and the low price of wheat eventually crippled cereal cultivation, provoked widespread desertion of the countryside and overall population decline, and was a significant factor in Spain’s 17th-century decline. High cereal prices primarily benefited not the peasants but the landlords. The landlords in turn spent their increased revenues on the amenities and luxuries supplied by towns. In spite of high food costs, town economies fared well.