The main reason for the decline of feudalism in Europe was the rise of the merchant class and the growth of trade. As towns and cities expanded, a new economic system emerged, characterized by increased commerce and market-based economies. This shift diminished the power of feudal lords, who relied on agricultural production and peasant labor. The Black Death also played a crucial role, as it decimated the population, leading to labor shortages and consequently, higher wages for peasants. These shifts laid the groundwork for the emergence of the modern state and capitalism.