The dominant economic system in Europe during the Middle Ages was feudalism. This hierarchical system was characterized by the exchange of land for military service and labor, creating a structured society where landowning nobles provided protection to peasants in return for work or a share of agricultural produce. Society was segmented into various classes, including kings, lords, knights, and serfs, maintaining local economies that were largely agrarian. Feudal relationships defined the social and economic landscapes, with little central authority, as most power resided with local lords. This system would eventually wane as trade expanded and centralized monarchies rose.