Abstract: Bedevilling the ongoing debate about changes in real-incomes in late-medieval western Europe, especially during the so-called 'Golden Age of the Labourer', is the very troubling issue of 'wage-stickiness'. The standard and long-traditional explanation for this supposed 'Golden Age' of rising real wages is that the Black Death (from 1348), subsequent waves of bubonic plagues, and other forces for demographic contraction that lasted until the late 15 th century dramatically altered the land:labour ratio, and thus led to a rise in the marginal productivity of labour, which in turn forced up real wages. This simplistic model assumes (1) that the marginal productivity of not only agrarian but also industrial and other forms of labour did in fact enjoy a sustained rise; (2) that changes in the marginal revenue product of labour did not diverge or vary from changes in marginal productivity; and (3) that wages were flexible, downwards as well as upwards. Though one might readily provide evidence that the MRP of various kinds of labour, in England and the cross-Channel Low Countries (Flanders), did not in fact continually rise as this model predicts, the focus of this paper is instead upon the behaviour of money wages, with widespread nominal 'wage-stickiness', in relation to changes in the price-index and cost of living, in both of these countries. For England, the cost-of-living index is measured by the well known Phelps Brown & Hopkins 'basket of consumables' index; and for Flanders, it is measured by one that I have constructed from Flemish price data, using the same weights as in the PBH index. For both countries, the evidence indicates that, while money wages for most craftsmen and labourers did rise following the Black Death - though by no means for all labourers, such a rise did not in all cases keep pace with the inflationary rise in prices that both countries endured for almost 30 years after the Black Death. In England, furthermore, where most craftsmen and workers had suffered a fall in money wages in the two decades before Black Death, the post-Plague rise in money wages did not regain the level of the 1320s until the 1360s. In the later 14 th century, however, first England and then Flanders experienced an equally dramatic deflation, one that endured into the first quarter of the 15 th century. It was during this deflationary era that real wages finally did rise substantially - and chiefly because nominal money wages remained fixed, while the cost of living fell sharply. The rest of this paper analyses the various institutional, social, and other factors that help to explain the widespread prevalence of money-wage stickiness over very long periods, in both countries. An appendix deals with most of the major issues about such wage-stickiness that have been raised in many debates, noting which factors then applied to England, or to Flanders, or to both; and which did not, in either case. For England, the most significant institutional factor to be considered is the role of the Statue of Labourers and other wage legislation, which tried to fix wages at the unusually low level that had pertained on the eve of the Black Death. No comparable wage legislation was imposed in Flanders; and yet the behaviour of real wages there did not significantly differ from those in England. It must also be noted that, in the early to mid 15 th century, some money wages did slowly rise, while deflation continued - thus indicating other forces at work to increase real wages; but in Flanders the resumption of short-term inflations, from the 1420s to early 1440s, with coinage debasements, tended to eliminate these gains, especially for woollen textile workers, those employed in Flanders' major manufacturing industry. The question posed in the title, 'did money matter', is a very important one; for the almost equally important focus of this paper is that the late-medieval inflations and deflations (including the pronounced deflation preceding the Black Death) were essentially monetary, and not demographic, phenomena.
JEL Classification: F4;J1;J3;J4;J5;N1;N3;N4;N6