Nevertheless, in mediaeval and early modern times the accumulation of capital was hampered and restricted in many ways. In the first place, it is obvious that the prime source of all capital must be the free gifts of nature mainly consisting in land and mines.2 Until 1700, in England, it is chiefly to agriculture that we must look for the saving, that provided us with sinews for, what has become known as the Industrial Revolutions.3 But the accumulation of capital in agriculture, in an ignorant and ill-organized state, obviously had very serious difficulties and limitations. Firstly, the perishable quality of much of the production, in the absence of quick transport and well-organized markets, made saving difficult. Moreover, the almost universal distribution of land among all classes of the community kept the demand for agricultural produce small, and in many cases any surplus produce must have gone to waste.
Again, the lack of ample circulating media in the shape of gold and silver, combined with the mediaeval superstition against usury, not only made investment difficult, but actually closed many avenues that might have been both productive to the community, and profitable to the individual. Moreover, potential capital was drained away along other channels. In the Middle Ages much capital was invested in ecclesiastical buildings which were not directly productive. Also our carrying, and even much of our inland trade, were in the hands of foreigners,4 while our wool was taken to the Continent, manufactured into cloth, and then re-imported into this country. All these operations meant a wastage or a failure to take advantage of means of accumulating capital.
1 Bohm-Bawerk, Positive Theory of Capital [trans.], p. 100 and note. Marshall, Principles of Economics, Bk. 11, Ch. IV, p. 81, Appending E, pp. 784-90..
2 Marshall, Industry and Trade, p. 51.
3 Ernle, English Farming Past and Present, pp. 148-9
4 Social England, ed. Traill. Vol. V, p. 164.