As the world economy appears to collapse around our ears perhaps it would be well to think about some of the historic events that have lead us here.
I am blaming war. In the Middle Ages the high cost of warfare created the need for the first time to tax a realms subjects on a regular basis, and the need for immediate cash lead governments such as Edward III’s to borrow on the basis of future tax receipts, the first government bonds in effect. And from there one can see how the need to finance such large projects (governments and armies) lead to the development of more sophisticated banking systems, such as those managed by the medicis for instance.
In the Middle Ages for the first time governments borrowed more than they could pay back, based on the security of a steady source of future income, the new regular taxes based on trade and possessions.
The UK has been in fairly serious national debt since the 17th century, and all of this down to war, Napoleonic, First and Second World Wars.
More recently it has been estimated that the Iraq and Afghanistan wars of recent years have cost the UK approximately £18 billion.
Edward III pursued a deliberate policy of drawing the nobility closer to the royal court and so make them more reliant on royal patronage. This was a reaction to the chaos of his Edward II’s reign, which had seen the country devastated by rebellion and civil war.
The nobility, and to an extent the gentry who relied on the magnates for access to royal patronage, needed such links to the court as their own incomes from land fell and as wealth became more concentrated in the central authority, as a result of the increased use of taxation and customs duties. In effect the only way for the nobility and gentry to improve their station and counteract the decline of their traditional income was to connect themselves more closely to the court. Thus they lost a degree of independence and relied more upon their influence at court. Given-Wilson in The Royal Household and the King’s Affinity points out that this was particularly the case in England: ‘The highly centralised nature of English government placed a vast store of patronage in the hands of the king, and there were very few checks on the way he dispensed of it.’ This, coupled with attempts to control feudal violence, meant that, in order to gain influence, the nobility tended to express itself less through warfare than through lifestyle, that is clothing, building, and feasting. Indeed during the fourteenth century the court became more and more a model for the lifestyle of the nobility, dictating the latest fashions. For the nobility to enjoy the patronage of the crown they too had to adopt such fashions.
This process might have been more or less important at certain stages of the period, depending on the nature of the king, but it was an important factor throughout the later Middle Ages. The nobility, if they desired to be successful, were drawn more and more into the court sphere as the crown established itself as the central authority of the state. The court, as Juliet Vale points out in Edward III and Chivalry, ‘was perhaps the area of greatest social mobility outside the church.’
Ultimately this lead to the even more sophisticated court fashions during the reign of Richard II (who invented the handkerchief!). You can read more about how aspiration of court fashions was mirrored in the literature of the period in my book The Court in English Alliterative Poetry, 1350-1450.