The major economic system in Europe during the Middle Ages was feudalism. This hierarchical system was characterized by the relationship between lords and vassals, where land was exchanged for military service and loyalty. Peasants or serfs worked the land for the lords in exchange for protection and a place to live. Feudalism dictated the social and economic structures of medieval society, as it defined roles, responsibilities, and rights within the community. This system largely influenced the political landscape of Europe until the rise of capitalism and the centralization of state power in the later centuries.