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Based on a synthesis of the empirical scholarship on England and Germany, this paper demonstrates that in both regions, rural socio-economic developments from c.1200 to c.1800 are similar: this period witnesses the rise to numerical predominance and growing economic significance of the 'sub-peasant classes', which had a growing impact on the market as a result of their increasing market dependence, and from which - towards the end of the period - a rural proletariat emerged. Against the influential theory of Robert Brenner, it is argued that the period c.1200- c.1400 cannot really be categorized as 'feudal' according to Brenner's definition; and 'agrarian capitalism' does not adequately describe the socio-economic system that obtained by the end of the sixteenth century. A genuine transition to capitalism is only evident from after c.1750, and can be found in Germany as well as in England; it is predicated both on ideological shifts and on the evolution of the rural proletariat, which is only found in large numbers by or after c.1800. [ABSTRACT FROM AUTHOR]