The Black Death of the fourteenth century reduced Europe’s population by about two-thirds between 1348 and 1420. Since endowments of land and capital remained unchanged, standard economic theory predicts rising real wages, falling rents of land and capital, and hence a drastic reduction of economic inequality. All of this occurred in most of western Europe. Elites eventually yielded, serfdom ended, landowners shifted from labor- to land-intensive production (grazing displaced planting), and labor-saving inventions abounded. In Europe east of the Elbe, by contrast, a formerly free peasantry was reduced to serfdom and landowners specialized increasingly in grain production, much of it for export. A plausible reason for the divergent responses is soil and climate: western Europe was mostly suitable for sedentary animal husbandry, eastern Europe was not; and the two were separated by a sharp dividing line that lay only slightly west of the Elbe. Data on Prussian landholdings suggest a strong correlation between low suitability for animal husbandry and the prevalence of serf-cultivated estates. Western elites could engage in factor substitution; eastern ones could not.