The economic theory of peasant motivation has been a contentious area over the past forty or so years. Its importance relates to the nature of economic development of rural societies, and in particular the sources of increased productivity when isolated villages are opened to trade with urban markets.

The two rival schools of thought are the Marxists on the one hand, in particular Robert Brenner, and on the other hand the neo-institutionalists.

Brenner argued that subsistence farmers in village communes prior to the capitalist era were not interested in trading on the market. Due to the levels of risk involved in trade, and the uncertainties posed by the market, peasants who owned their own land would concentrate upon producing everything they needed, and minimise their interaction with the market. This would be especially the case under the Feudal system as the local Lords, be they knights or barons, would take away the surplus produced by their peasant-surfs, and so there was no point in peasants investing in improving their land, working harder than necessary to improve their well being, or risking engaging in trading on the village market to raise their incomes. The only beneficiaries would be the local overlord.

Brenner therefore theories that the only way that growth could have been achieved was though the feudal overlords seizing the peasants land, in a similar fashion to the system of enclosures in early modern England, and making their serfs work for a wage, so that they would have to interact with the market to buy everything they would have formerly produced themselves. This would open the doors to economic growth as described by Adam Smith, productivity gains resulting from division of labour impossible to achieve in an economy based upon subsistence agriculture.

This was similar to Marx’s own explanations of how capitalism brought about economic growth through expropriation and exploitation of the working classes and peasantry.

However, there are reasons to doubt such a theory. It is impossible for us today to look into the minds of feudal peasants and know what really drove their economic behaviour. Mainstream economists and economic historians generally distrust theories which seek to explain economic progress by saying that people prior to the industrial revolution were not rational, or not motivated to make money.

An alternative view is that of the Neo-Institutionalists. They seek to explain economic growth as being caused by a fall in transaction costs, i.e. people trade more because it is easier to trade. Increases in urbanisation, cheaper transport, and more friendly governing systems made it easier for peasants to trade, and this drove forwards Smithian economic growth as opposed to Capitalist exploitation.

Once particular form of evidence offered by Neo-Institutionalists is the wide range of regulations that existed in early modern village communes. It was generally the case that peasant villages would have a wide range of laws governing economic activity, whereby individual peasant farmers were told where they could plant each crop, how much they could plant, when they were allowed to plough their fields, and when they could harvest. These were all decided by the village council, and most likely aimed at restricting production to hold up the price of grain in the local towns. Village communes, in other words, acted as cartels, restricting competition to raise profits.

This is not the kind of behaviour you would expect from peasants scared of interacting with the market. It suggests that humble peasants were prone to behave in the same fashion as cut-through capitalists. Furthermore, for these rules to be enforced, there must have also been inequalities of income within each village – it would have been the richest peasants who would have had the incentive to go out of their way to make sure the poorer peasants did not brake the rules, as the richer peasants had the most to gain from the higher prices, as they had the most surplus grain to sell to the towns. They had the incentive to invest time and energy in supervising the village commune to enforce the production laws.

What we therefore have is a picture of is peasants who own their own land responding to market signals and doing their best to interact with urban grain markets. As towns and cities grew, they would be able to find sources of food from more distant farms and villages, and the ability of individual communes to raise prices by restricting output was lost. Instead, peasants who owned their own land had an incentive to work hard to produce as much output as they could, and to invest time and money into improving their quality of their land. When, as was the case in England, aristocratic landowners went about buying and ceasing land from the peasants, expropriating them in the language of the Marxist, this was not a step forward but a step backward. By employing tenant farmers to work the land, they were ensuring that productivity would cease to rise. Tenant farmers do not have an incentive to work hard or improve their land. They do not have an incentive to innovate or look for ways to raise output or productivity. Robert C. Allen argues that the agricultural revolution that occurred in England during the 16th to 18th Centuries took place in spite of, not because of, enclosures and the expropriation of the land owning peasant class.

In conclusion, it is most likely misguided to view the poverty of the past as a result of a lack of motivation to work hard or engage in trade and other economic activity. People have had the same motivations since time immemorial. What has changed is the situations in which we live and the possibilities open to us.