What economic system replaced feudalism in Europe?

The economic system that replaced feudalism in Europe is capitalism. During the late Middle Ages and into the Renaissance, shifts in economic practices began to emerge, leading to the decline of the feudal system, which was based on land ownership and a rigid social hierarchy.

Capitalism introduced new economic principles, emphasizing private ownership, individual rights, and free markets. This system encouraged trade, the rise of merchant classes, and a focus on profit, which contrasted sharply with the feudal structure where land was controlled by a few and economic activity was primarily local and subsistence-based. The growth of towns and the rise of banking and commerce supported this transition, allowing people to earn income through trade rather than just through agricultural labor linked to feudal lords. As these capitalist practices became more widespread, they fundamentally changed the economy, leading to the development of modern nation-states and more complex economies focused on innovation and industrial growth.