The three introductory chapters on how to study production, market, and money and credit provide frames for the reviewed sample studies in Chaps. 6, 7 and 8. They offer some guidance in finding your bearings in the jungle of concepts and debates which makes premodern economic history such an interesting, but challenging subject to study. Each chapter structures important and current debates in the field and explains the basic concepts used in these discussions. Most debates concern the premodern European economy in general. Whenever possible, we refer to corresponding studies for the Holy Roman Empire. We point to classic works as well as to newer studies but offer no exhaustive compilation of all the research done in the area.
We recommend reading one of the handbooks, such as Epstein (2009), Malanima (2009) or, for the Holy Roman Empire, Scott (2002), alongside this book to gain a deeper understanding of the processes and phenomena that shaped premodern production, market, and money and credit.
In premodern times, market exchange was not the most common form of exchange. The premodern society was to a large degree an agricultural society which was not highly commercialised (Cipolla 1976). Alternative forms of distribution and exchange predated and were at some point supplemented or substituted by market exchange: for instance ritual exchange, which often took place within associations, families or kin, such as gift or dowry; or unidirectional, hierarchical forms of redistribution such as taxes , charity, plunder, theft or ransom (Cipolla 1976, 19, 21; Persson 2010, 29, 79; van Bavel 2016, 1).
Although market exchange was by far not the only form of exchange practised in premodern times, it is the form that is most frequently studied and most hotly debated in historiography. This mechanism of exchange lies at the heart of the grand narratives concerning the market in premodern times. Economic, cultural and social historians all tell the story of the market between c. 1300 and c. 1600 as one of an increase in market exchange leading to a market economy and a consumer society. Adam Smith started the modern discussion of the topic, suggesting that market exchange stimulates economic growth : Who wants to or has to participate in market exchange has to offer something that other people want, and she has to refrain from consuming the good herself. Thus, she must raise her productivity or specialise her efforts in a certain product. In return, she can obtain goods she could never produce herself. According to this classical assumption, markets set incentives for division of labour , specialisation and inventiveness, all of which promote economic growth (Hatcher and Bailey 2001, 124). Adam Smith’s hypothesis, though still much cited, has been challenged a number of times during the past 250 years, and discussions on the advantages and disadvantages and the specific characteristics of markets still continue. The emergence of a market economy in Europe is highlighted as a pivotal development which shaped Europe’s path to modern capitalism and industrialisation . The first part of this introduction recounts these narratives of commercialisation and the emergence of the market economy .
However, in the view of the premodern contemporaries, a market did not mean a certain mechanism of exchange, but rather a specific place and an event where goods as well as gossip were exchanged. The study of premodern markets thus does not only revolve around the emergence of a market economy , but also aims at finding out how marketplaces looked like and when markets took place, who frequented them and how rules and norms shaped market activities. The second part of the introduction outlines how these elements of the market are discussed in current research. Both aspects of the study of markets are of course closely interrelated: If one wants to find out how and when exchange via the market increased, one has to study the concrete exchange on physical marketplaces, its frequency, the people exchanging goods on the markets and the rules and norms that fostered or hindered market exchange.
This chapter focuses on markets for goods as the most common form of market: Such markets for commodities have almost always existed. Markets for land , labour and capital , on the other hand, are comparatively rare phenomena throughout history (van Bavel 2016, 1). Commodity markets are discussed in this chapter, whereas the specific premodern forms of exchange for land , labour and capital are being dealt with in the other chapters on production and money and credit.
Europe, c. 1300–1600: Commercialisation and the Market Economy (Angela Huang, Ulla Kypta)
The study of markets in premodern Europe tells the story of how a society whose exchange took place on markets , among other forms of exchange, was transformed into a society which was shaped by market relations. Researchers agree that the emergence of a market economy rested on an earlier development called commercialisation: If goods are more frequently exchanged on the market and not via any other form of exchange, they become commercialised (Malanima 2009). In the west of Europe, this process began in the tenth century, with a boom phase in the thirteenth century that brought about a notable growth in market exchange. In this period, more and more goods were being traded via the market.
It is quite difficult to assess what share of economic activities was distributed via the market. Most studies focus on urban markets, even though about 80 per cent of the population were working in agriculture —a part of society for which source material is very scarce. Commerce and consumption can often best or only be studied indirectly. Dijkman, for example, assumes that a commercial society can be recognised by a high ratio of urban to rural population , the widespread presence of non-agrarian activities in the countryside and a highly commercialised nature of agriculture (Dijkman 2011, 3). Furthermore, inventories are often analysed to get a grasp of premodern consumption (Overton et al. 2004, 170). An indirect view on consumption is also offered by the adaption of the ‘Worlds of Production’ (Storper and Salais 1997). Here, consumers are not seen as individuals or households , but groups with certain conventions in their choice of product. Studying the organisation and design of production (Jeggle 2011) and the composition of the market thus offers indirect evidence for the degree of consumption that is handled via the market.
A commercialising economy can merge into a market economy. The standard textbook story (Malanima 2009; Persson 2010), in the tradition of Adam Smith, describes the development of a market economy as a linear process: “The exchange of goods and services facilitates the division of labour , specialisation , inventiveness, and the accumulation of capital , and all serve to raise productivity and promote economic growth ” (Hatcher and Bailey 2001, 124). For the Middle Ages, the story goes as follows: During the twelfth and thirteenth centuries, population was growing, but increase in demand was not checked by a Malthusian dynamic (see section “Population, Demography and Economic Growth” in Chap. 2), because supply increased as well: The danger of diminishing returns on land and labour was countered by a rising number of towns (see section “Urbanisation” in Chap. 2) as well as the emerging proto-industrial production which generated new jobs and ensured that the economy could grow. Specialisation and differentiation of work processes, new knowledge and techniques, enhanced productivity. A growing population settled closer together, thus access to markets was getting easier, transactions costs were decreasing (see section “Transaction Costs and Institutions” in Chap. 2), specialisation became more profitable and economies of scale could be realised. All these changes were cumulative and beneficial, according to this story, and thus stirred the European economy onto a path of steady progress (Hatcher and Bailey 2001, 125).
In contrast, van Bavel points out that the path to a market society was not a linear, but a cyclic development (van Bavel 2016). Market economies are defined as those societies that predominantly use the market as their exchange system not only for output but also for land , labour and capital . Van Bavel argues that market economies such as early modern England were not self-reinforcing, but on the contrary undermined their own foundations. He underpins his argument with empirical examples from Babylonia in the second millennium BC, classical Athens to the Yangtze Delta at the beginning of the second millennium AD and the United States in modern times: Growth always petered out after a few centuries. Furthermore, his account regards market economies not as the goal every society should strive to reach, since he finds no conclusive evidence that market economies showed higher growth rates over longer periods of time. In his view, market economies do not so much foster growth as stabilise the power of political elites.
Another not very optimistic story of the emergence of the market economy comes from Polanyi (1944). In his famous book The Great Transformation, he claims that the premodern economy was shaped by three forms of exchange all different from a market economy: redistribution, reciprocity and house-holding. In a redistributive system, a central entity such as a feudal lord was in charge of production and trade and distributed the goods according to his will or plan. Distribution was organised hierarchically. Reciprocal exchange took place between social groups such as families or tribes. Households produced textiles, food and tools and distributed them between the family members. These three forms could exist alongside each other. Markets also existed, but only for supplying those goods which the other, dominant systems of exchange could not provide. The ‘great transformation’ then changed this premodern system into the modern market economy, which together with the modern nation state formed the market society. Polanyi stresses that this development cannot be described as a liberal process of freeing the market from constraints, bringing wealth to all, but rather as a transformation pushed through by the modern state that thereby uprooted the people from their traditional social relations, their ‘habitation’.
In sum, researchers agree that during premodern times the European economic system underwent profound change, and that a market economy emerged at least in parts of Europe. Indeed, as Masschaele puts it: “research on markets has effectively transformed the field of medieval economic history, directing scholarly attention away from demography and toward commercialisation as the primary explanatory model for change in the period” (Masschaele 2002, 383).
In general, market exchange is defined as the matching of supply and demand . Markets thus coordinate wants through the forces of supply and demand . Some definitions of market exchange add specifications on how the matching of supply and demand has to happen : There have to be enough different buyers and sellers so that exchange can be regarded as impersonal, that is: the way the transaction is carried out does not depend on the specific person buying or selling the product. Market exchange is combined with the use of money (Persson 2010). Van Bavel summarises this view: “Generally […] markets are defined as systems for exchanging and allocating resources by way of monetary transactions, with prices primarily determined by the forces of supply and demand , and with multiple, competing buyers and sellers who are mainly geared towards maximising their own utility or profit ” (van Bavel 2016, 3). Prices as a measure of the value of the exchanged products are thus an important element of market transactions.
Furthermore, prices indicate to what degree markets were interconnected. If transaction costs become so low that markets relate more closely to each other, prices converge. These markets are called integrated. Integrated markets are supposed to have fostered growth. Prices of grain are the most common indicator used to study the degree of market integration (Epstein 2000; Galloway 2000; Van Zanden 2009, 20).
See reviewed sample studies 21, 27, 43.
Price Data as a Historical Source (Mark Spoerer)
Whereas the importance of prices for the analysis of premodern markets is not under debate, constructing meaningful price data is. The price is the quantity of payment that one party (the buyer) gives to another (the seller) in return for one unit of a good or a service . Evaluating prices, however, poses a lot of challenges. The quotation of a single price is in most circumstances meaningless. The price acquires meaning only when compared horizontally to that of other goods or services, which results in relative prices, or vertically along the time axis, which results in a price series. The price is not necessarily expressed in some form of currency ; sometimes quantities of other goods or services could be quoted as well (e.g., three pigs for a cow). This kind of transaction, barter exchange, does not require currency and is thus found only in regions where transactions have not yet been monetarised (or where the parties involved wanted to avoid sales taxes ). The price for a unit of work (typically an hour, a day, a week, a month, a season or a year) is the wage rate, and the price for a unit of money is the interest rate . Wages and interest rates are discussed in the chapters on production and money, respectively.
For historians, usually only relative prices are of importance. Probably the most popular relative price among (economic or social) historians working on the Middle Ages is the real wage , that is in the most simple form the ratio of the wheat or rye price per unit of fine gram silver per hour worked , usually for a mason or a day labourer. The idea is that a series of this relative price allows inferences on the development over time of the living standards for the lower half of society (see section “Great and Little Divergence” in Chap. 2).
There are, however, many caveats, and the following list is far from exhaustive. First, in the Middle Ages only a small fraction of goods , services and hours was exchanged via markets. Peasant households consumed most of what they produced themselves, and most of what they had to hand over to nobles and the church was consumed by them and their courts or abbeys. Only a small fraction of the harvest found its way to what we call a market. Second, why should the parties involved in market transactions record the prices they paid or earned? This was the case only when some bookkeeping was necessary, typically in institutions where the acting agent had to justify his market transactions to his principal. This may have been the city council, the board of a charity institution or the principal of a trading company . Apart from account books, another source are market reports, often compiled by the city administration . Third, whether the price paid (and recorded) by a large consumer like a city or a hospital was the same as that paid by a day labourer is unclear. Fourth, whether the price one can find in market reports compiled by the city administration was the (correctly calculated average) actual price or just a norm , for example an upper limit for the price that could be asked for, is often not clear. And, fifth, in premodern times prices are in effect local. Insufficient transport infrastructure and ineffective means of transport increased trading costs, and so market integration is supposed to have been weak until the nineteenth century.
These and further caveats explain why many premodern historians are reluctant to pay attention to prices at all. The reason why economic and social historians do, is simply the lack of an alternative. If history is (also) about how people lived in earlier times, then a flawed measure, if interpreted as properly as possible, is better than none at all. Until the mid-nineteenth century, few historical price series were published. Only after the 1850s did authors, often economists influenced by the Historical School in Germany and elsewhere, start to publish price series on a larger scale. Probably the most famous examples are the History of Agriculture and Prices in England by Rogers (1866–1902), who cites commodity prices since 1267, and Prices and Wages in England from the Twelfth to the Nineteenth Century by Beveridge 1939.
See reviewed sample studies 22, 28, 32, 36.
The End of the Beginning: The Consumer Revolution (Eva Brugger)
Over the centuries, more and more goods were being traded via the market. A commercialising society also brought with it the consumer as an important protagonist of the market economy . Commercialisation and consumption are closely related concepts, as consumption is commonly understood as buying goods via the market. When with a predominant market economy most goods (and even labour, land and capital ) were now exchanged via the market, this prompted yet another premodern revolution that marks the end of the period that this book covers: the consumer revolution that transformed European economic culture .
The consumer revolution rested on a fundamental change in moral attitudes: “A chorus of new voices defended man’s appetite for more as the impetus of human advancement. Here was a fundamental transformation, overturning centuries of received wisdom: less is more gave way to more and more. Once regarded as a drain, to be checked and kept under control, consumption was now defended as a source of wealth ” (Trentmann 2016, 54). By studying contemporary defenders of luxury, such as Georg Marie Butle-Dumont, Bernard Mandeville, Voltaire and David Hume, Kwass explores how cultural transformation “created new taxonomies to order an expanding world of goods ” and accompanied the rise of consumption in France (Kwass 2003, 87).
When exactly this fundamental change happened is highly controversial. McKendrick, Brewer and Plumb proclaimed the birth of the consumer society in England in the third quarter of the eighteenth century. They entangled economic growth before industrialisation with expanding market consumption (McKendrick et al. 1982). Subsequently “[a] race got under way, as one after another claimed a ‘consumer revolution’ for their period… Stuart historians have spotted it in seventeenth-century England, Renaissance scholars traced its roots to fifteenth-century Florence and Venice, while medieval historians detected its embryonic stirrings in a new taste for beef and ale and playing cards. Scholars of China added that the Ming dynasty (1368–1644), too, had a cult of things and deserved to be recognised as ‘early modern’” (Trentmann 2016, 22). Mukerji locates the beginning of a “hedonistic culture of mass consumption” in the fifteenth and sixteenth centuries (Mukerji 1983). Welch adds an Italian Consumer Revolution in the fifteenth century: Her study in cultural and art history analyses how female and male actors from all social classes bought and sold goods in streets and shops during the Italian Renaissance (Welch 2005; see also Goldthwaite 2009).
In the 1990s, de Vries contributed significantly to the debate on changing consumer practices in premodern Europe. By focusing on Dutch households in the seventeenth and eighteenth centuries, he sheds light on women (and children) as economic agents and he supplied a satisfying answer to the question where increasing income in premodern Europe derived although wages stagnated (de Vries 1994): “Driven by a combination of commercial incentives (changes in relative price , reduced transaction costs ) and changes in taste, this ‘industrious revolution’ emanating to a substantial degree from the aspirations of the family, preceded and prepared the way for the Industrial Revolution ” (de Vries 1994, 255f). Based on Gary Beckert’s Theory of the Allocation of Time, de Vries tracks how the increased longing for material consumption led male and female workers as well as children to work more. He shows that the income of household rose though day wages stagnated (de Vries 1994, 73–121).
In other words, the participation of women (and children) on market-based economies, less social regulations and the social acceptability of market consumption determine and characterise premodern consumer revolutions. The participation of women in market-based economies and the possibility to allocate time to wage-paid working are attached to institutional preconditions that permit married and unmarried women to work outside the household (Ogilvie 2010, 290). The institutional controls of social regulation differed in Europe as research on social disciplining, guilds , communities and women’s history have shown. The Low Countries, England, Northern France and a few other enclaves witnessed an earlier and more significant relaxation in institutional regulation than was common in the central, Nordic and Southern parts of the continent (Ogilvie 2010, 297). This asynchrony in social control explains the asynchrony of economic development in Europe. Only with the permission for women to work on market-based economies and the acceptability of market consumption consumer culture could emerge.
The debate about increasing input of labour and the degree of market work, leading to more spending money, has given great impulses to the field, also leading to new strands in the debate like that of a ‘retail revolution’ in the seventeenth century (van den Heuvel and Ogilvie 2013). Works on the medieval consumer in Germany are still mostly focused on retail traders, with the exception of Hammel-Kiesow (1999), who tries to find out something about end consumers, and a recent edited volume, which analyses towns whose main contribution to the economy was neither production nor distribution , but consumption (Selzer 2018).
More common so far are more general studies of changing patterns of consumption based on studies of real wages (Allen 2001; Cipolla 1976). Historically high real wages , it is claimed, allowed the development of a medieval ‘consumer economy’ (Kowaleski 2006). Studies on consumerism before the Industrial Revolution focus on the consumption of the nobility (Selzer 2008; Ertl and Rothmann 2015). Most studies focus on the period from the seventeenth century onwards and on the Netherlands and England (such as Overton et al. 2004; Rosenband 2016; Berg 2005). The material, institutional and political availability of goods fuelled the consumer revolution in these states, especially in the second half of the eighteenth century (Ogilvie 2010, 288). The consumer revolution thus leads the way to the modern consumer society.
See reviewed sample studies 22, 37, 38, 40.
Elements of the Market (Angela Huang und Ulla Kypta)
During the time c. 1300–1600, which forms the core of this book, the transformation of the European economy we outlined above had only begun. It took place in many different areas of society. Various marketplaces, a range of different market participants and goods as well as diverse rules and practices of the market within and across economic regions in Europe shaped its economic development. In the following section, we outline different characteristics of premodern market exchange, starting with markets as both physical places and events. We continue with the main types of actors who bought and sold goods and thereby brought the market to life: trading companies , networks of merchants and merchant guilds , monasteries , princely courts and actors on the margin of subsistence . The actions of market participants shaped market institutions and were in turn governed by them: we will therefore finally turn to the discussions on how markets as places, events and mechanisms of exchange were regulated by formal and informal rules, and how social practices and moral norms shaped activities on the market.
Market as Places and Events
When contemporary merchants and peasants referred to the market, they mostly did not mean the mechanism of exchange discussed above, but markets as physical places and events, as in the sentence “Tomorrow I’m going to go to the market.” This meant: “Tomorrow I’m going to go to a certain place where at this time of the week or year a market is going to take place.” A market as a place can usually be found in a town . It is a venue for trade that is open periodically, a place specialised on exchange, in which buyers and sellers meet (Epstein 2009, 71, 79). Each marketplace looked different, but certain common features of marketplaces can be named (Baeriswyl 2006): Markets were established by seigneurial privilege . A market cross or a Roland statue was erected to symbolise that the town had been given the privilege to host a market. The market either covered a central, often rectangular area of the town , or a certain street served as a location for the market, often called market street until today. Similar products often had to be sold alongside each other: There was one street designated for the fish market, for example, another one for meat, and so on. The space allocated to the market was often quite large and expanded over time, which indicates that market activities were a common and important feature of the life in a premodern town (Masschaele 2002, 389).
Goods were offered from stalls, booths or benches. The town council often allocated certain stalls to certain crafts or trades : Bakers had to sell bread from this booth, cloth had to be sold from that stall and so on. In towns where the town council was not able to regulate market activities quite as tightly, merchants and artisans sometimes sold their goods from their own houses. In such cities, the market was not confined to a well-defined place or street but covered certain areas of the town and took place in commercialised places, for example, the town’s gates. Some towns maintained specific warehouses: Foreign merchants had to bring their goods there to pay the customs and could then store the goods and sometimes even sell them directly from the warehouse. Foreign merchants often stayed and stored goods at inns or taverns. At most marketplaces, one could find a water well and a public clock (Baeriswyl 2006). Archaeologists provide valuable information about the layout of marketplaces, the position of stalls and so on (Müller 2017; Rösch 2018).
The premodern market was not only a place to buy and sell goods , however. Masschaele has characterised English marketplaces as “public social gatherings” (Masschaele 2002, 384). News and gossip were shared between market participants. Royal writs as well as ecclesiastical and local proclamations were read out during market times, so that urban dwellers as well as peasants who had come to the market could hear them. Public punishments, both civil and ecclesiastical, were also carried out on the marketplace for everyone to see. Market participants were thus acknowledged as political subjects. It should come as no surprise that markets also served as starting points for rebellions.
In the research literature, the term market does not only denominate a specific place inside the town walls but also the whole town as the place where a market took place (e.g., the market of Cologne). Towns were a crucial prerequisite for market development: They provided not only a space for market activities but also the supply of and demand for specialised goods and services and the necessary regulations governing market activities. The historiography of urbanisation thus forms an important part of the study of markets (see section “Urbanisation” in Chap. 2). Towns were not the only marketplaces: Monasteries and seigneurial seats provided central places as well, allocating and redistributing goods and fostering specialisation . Most researchers, however, focus on towns as hosts for markets.
Markets were not only places but also events that took place on certain days of the week (mostly Saturdays and Wednesdays) or on certain days or weeks of the year. Nearly every town hosted a weekly market. Urban dwellers and peasants from the immediate surroundings of the town exchanged daily necessities here. Most towns also organised periodic fairs . These often took place during the days around a church holiday, for example, Lent in spring or Michaelmas in autumn, since most feudal lords demanded the payment of feudal dues from their peasants on a certain holiday. Thus, the peasants needed a market to sell their products and receive money which they could give to their lord, and the lord could use the money he received to buy commodities on the market. Periodic fairs often attracted not only peasants from a town’s hinterland but also merchants from the wider region. Merchants , peasants and artisans exchanged their products here. In contrast to the weekly markets, which were in most cases heavily regulated, the fairs offered a less restricted access. These regional fairs are hard to count. Rothmann reckons that in the Holy Roman Empire before 1500, around 5,000 fairs existed in 1,500 towns (Rothmann 2010). After 1500, the number of fairs in Europe supposedly increased even more (Epstein 1994).
Next to the local or regional fairs , interregional fairs supported European-wide exchange. Interregional fairs were often synchronised so that merchants could go on from one fair to the next. The earliest example of a system of synchronised fairs are the Champagne fairs , which flourished during the thirteenth century. Six fairs , each lasting two months, in the four towns of Troyes, Provins, Bar-sur-Aube and Lagny-sur-Marne covered the whole year. Later on, the fairs of Antwerp and Bergen op Zoom in Brabant took over the role as important places of exchange between Northern and Southern Europe. In Germany, the international fairs of Frankfurt/Main and later Leipzig are considered the most important and have thus received most attention (Rothmann 1998; Brübach 1994). During the Late Middle Ages, interregional trade was carried out not only via interregional fairs but also via some towns where interregional trade took place all year round. In the Holy Roman Empire, such markets mediating between larger economic regions were, for example, Nuremberg, Kraków, Basel, Cologne, Augsburg or Hamburg.
The geographic location was an important feature of a market: It determined who and what would reach the market. To attract regional or even international trade and thus a greater variety of commodities , a market had to be connected to the trade routes that crossed Europe. At best, a market could be reached by waterways, either across the sea or via rivers, since travelling by water was in general less expensive than the journey by land . A market attracted merchants as long as it could offer goods which would make the journey worth their while, for example, if the respective town was the heart of a proto-industrial region that manufactured goods for trade on a large scale at comparatively low cost. Interregional fairs for large-scale trade developed at places where merchants from Southern Europe could meet merchants from the North. In the Late Middle Ages, Bruges and Antwerp served as such points of exchange between the North and the South, since both cities could be reached comparatively easily from the North, South, East and West by sea, rivers and land . During the sixteenth century, Lyon also counted among the important and well-connected markets in Europe, as a study of toll levied on the river Rhône shows (Lang 2015).
The different markets in Europe were interconnected, both hierarchically and geographically: Goods bought on local markets were sold on international fairs , and regional goods bought on one local market were sold at another market in a different region. For example, dairy products from local village markets in Flanders were resold at the international market in Bruges to merchants from Cologne, or herring was bought at the market in Gdansk and shipped on to the markets of Thorn, Krakow or Lemberg (Jahnke 2000). Rothmann reconstructs a hierarchy of markets for Southern Germany: Local markets could be found in more or less every town . Regional fairs took place in Nördlingen, Nuremberg, Zurzach, Linz, Bozen, Ulm, Basel and Strasbourg. Merchants from Southern as well as Northern Germany who wanted to participate in international trade had to go to Frankfurt/Main or Leipzig (Rothmann 2010).
See reviewed sample studies 23, 34, 39, 41.
Actors on the Market
The premodern market can be characterised as a market with a broad range of different market participants: Merchants traded by themselves, formed partnerships with other merchants or acted as part of a trading company . Craftsmen and peasants substantially gained importance as market participants throughout the centuries covered here. Actors on the margin of subsistence , such as pawnbrokers and retail traders, made use of the market to better their living. They were not yet excluded from market activities (Fontaine 2014). Monasteries played an important role as mass-producers who sold their goods on a nearby market and thus connected town and countryside . At the princely courts , conspicuous consumption was invented, and the precious foodstuffs, cloths and other goods needed to impress people had often to be bought via the market. Most studies on the actors on the market focus on merchants , however. We do not know much about the other actors who only frequented the market from time to time and engaged in a number of other activities to earn their living (see Chap. 3). The final consumers are also difficult to study for premodern times (see section “The End of the Beginning: The Consumer Revolution” above).
Every actor on the market who did not only trade for himself had to face a principal-agent problem . It arose if someone wanted to do more than one business operation at the same time, especially if he wanted to do business at more than one place at the same time. If an actor wanted to buy or sell good s on a specific market—say: if he wanted to sell wax in Bruges or buy spades in Nuremberg—he didn’t necessarily travel to Bruges or Nuremberg himself. According to one of the most influential grand narratives of premodern economic history, merchants became sedentary during the Commercial Revolution of the High Middle Ages, and hence stopped travelling across Europe with their goods (see section “Commercial Revolution” in Chap. 2). Instead, they relied on a representative, who sold the wax or bought the spades for them. The principal cooperated with or employed an agent. The principal-agent problem could arise for every kind of market actor, but it was most urgent for merchants who earned the main part of their living by buying and selling and therefore often engaged in a number of simultaneous trading activities. A merchant thus had to deal with the problem of how to ascertain that his representative did what he wanted him to do. Trading companies , on the one hand, and networks and partnerships on the other hand, offered different solutions to this problem.
Trading companies are probably the economic actors that feature most prominently in German research. When research on business organisation s began to gather momentum at the end of the nineteenth century, researchers set out to find the origins of the Offene Handelsgesellschaft, a form of disclosed company in today’s German law. When a merchant was part of a disclosed company , he made it clear to his business partners that he was trading not only for himself, but also on behalf of other merchants . In contrast to that, in an undisclosed cooperation, his association with other merchants was not made public. Even though undisclosed partnerships were the most common form of cooperation between merchants , the disclosed company has stood at the centre of researchers’ attention. Weber found its beginnings in medieval Italy (Weber 1889). Even though he only wrote a seminar paper about this, his classification of different types of companies became highly influential. Weber’s teacher Goldschmid proposed the hypothesis of universalism (Universalismusthese), which argued that all European merchants faced similar challenges and in order to cope with them, came up with similar solutions (Goldschmidt 1891). This hypothesis was not tested, but regarded as confirmed and applied: Weber put his findings from Pisa, Genoa and Florence into ideal types , and researchers in his wake tried to fit their findings from all across Europe into Weber’s categories and identify compagnie (every partner worked ), commende (partners either worked or contributed capital ) and societates maris (not everyone worked , but everyone contributed capital ).
For a long time, a large part of German research on trading companies has been focused on a few prominent, mostly Southern German trading companies that were supposed to consist of a large number of partners and employees who staffed their outposts in several European cities and could engage in spectacular business activities: To name just the two most famous examples, the Fugger family lent money to kings and the emperor (besides engaging in a wide variety of trading and mining activities), and the Welser imported sugar from the New World. Both stem from Augsburg, where several such companies were based. Their principal-agent relations are supposed to have been organised hierarchically: The partners of a company employed servants who managed the business at the different outposts of the company . They carried out instructions and had to account for their actions in regular intervals. The partners themselves could also represent their company away from home, and they were also supposed to report back to headquarters. The solution for the principal-agent problem in Southern Germany thus supposedly lay in supervision and control of the agents (Hildebrandt 1997; Lutz 1976).
This focus on large trading houses has recently been challenged. If one tries to find empirical evidence for this form of business in the premodern sources, it actually gets complicated. It is, for example, not easy to distinguish a member of a company who rendered account to his partners from an independent merchant who was not part of a company , but nevertheless cooperated with partners, for example by selling their goods on commission. Both, the company merchant and the independent merchant , rendered account to their partners, both did not always lay it open to their business partners that they were acting on behalf of someone else, and both tended to do business on the side on their own account as well. Recent research on one of the most famous large companies with a system of accounting between the outposts and the headquarters, the so-called Great Ravensburg trading company (Grosse Ravensburger Handelsgesellschaft), has come to the conclusion that it was not so much one large, hierarchical company , but quite a typical family business (Denzel 2009) which contemporaries never called “great” or “Ravensburg” (Meyer 2001). Furthermore, for a long time it has been doubted how effectively servants could have been surveyed, given the speed of premodern communication. A letter sent from Cologne, for example, needed about a week to travel to Bruges in the first half of the fifteenth century.
Furthermore, in recent decades it has become clear that these large companies were in no regard typical examples of business organisation in the sixteenth century, a time that is often called early capitalism . We know a lot about the Fugger and a few other exceptional companies since they left a well-stocked family archive besides documentation in the urban archives of Augsburg and other towns . But even in Augsburg, often regarded as the capital city of early capitalism , the average company consisted of very few partners only and traded to a small selection of other towns . The centre of attention has thus shifted to these smaller and more typical businesses (e.g., Steinbrink 2007).
Traditional research assumed that trading houses were founded in Southern Germany mostly, whereas Northern German (mostly Hanse) merchants cooperated in small-scale partnerships. For the last 40 years, a debate has raged about which form of organisation was more efficient for trade . In the 1970s, von Stromer claimed that the Hanse’s organisational structure could only be assessed as retrogressive in comparison with Southern German trading houses (von Stromer 1976). Researchers on Hanse history answered with studies that aimed to show that the Hanse and the Hanse merchants ’ network provided all the services that a Southern German trading house could offer a merchant (Sprandel 1984; Selzer and Ewert 2001). For example, it was argued that while Southern German merchants organised the flow of information inside a trading house and exchanged information between branches and the headquarters of a trading house, Northern German merchants relied on the organisational structures of the Hanse, that is, the diets and kontors in Novgorod, Bergen in Norway, Bruges and London, for that kind of service (Jenks 2013), and exchanged information via the established network of their relations with family members, citizens of their home towns and other partners. However, neither the hierarchical structure of a Southern German trading house nor the workings of the trust-based network of Hanse merchants can easily be found in the sources (Ewert and Selzer 2016). Thus, the whole story of an antagonism between networks in Northern and trading houses in Southern Germany has recently been challenged (Kypta 2017).
In current research, the focus is shifting away from the fight between the defendants of large-scale trading companies and small-scale merchants ’ networks . Instead, social history and the study of kinship relations have prompted researchers to analyse social and kinship ties between the members of a trading company . The quest for finding the first instances of modern forms of business organisation has been replaced by the acknowledgment of the diversity of premodern trading organisations. Small-scale partnerships and informal cooperations have been studied for selected merchants . Even though the findings have not yet been combined into a systematic approach, it has become clear that disclosed companies were not the typical, but probably the most exceptional player on the premodern market. Small-scale, undisclosed partnerships always remained an important form of business organisation alongside disclosed companies . Merchants could even be part of a company as well as be engaged in either formal or informal partnerships at the same time (see Steinbrink 2007 for the merchant Ulrich Meltinger from Basel and Hammel-Kiesow 2011 for Hildebrand Veckinchusen from Lübeck).
Another hotly debated organisation whose rules and norms shaped markets is the merchant guild . The debate is concerned with the question whether merchant guilds fostered or hindered economic growth . Greif, Milgrom and Weingast follow a long-standing tradition in economic history when they argue that merchant guilds promoted growth , since they employed political pressure to ensure that urban or princely governments protected their property rights and granted trading privileges to them (Greif et al. 1994). Ogilvie has challenged this assumption (Ogilvie 2011). She points out that only merchants who were part of a guild could profit from such securities and privileges . They had no interest in overall economic growth , but just wanted to secure that their own share in existing activities was large enough. Economic growth only kicked in when guilds were abandoned, and open-access institutions procured all merchants with a reliable framework for their business .
Monasteries are a player specific to the premodern market. In contrast to the often-evoked image of secluded places for divine devotion, monasteries and their inhabitants must be numbered among the market professionals. They acted as sellers of agricultural and manual products and as buyers of all the goods they were not producing themselves. Because monasteries were often situated in the countryside but sold and bought their goods on an urban market, they acted as important intermediaries between town and countryside . Since they combined an ascetic way of living with a systematic approach to organising production and the aim of a growth in output, they served Weber as an example for a proto-capitalistic organisation (see section “The Emergence of Capitalism” in Chap. 2). The Cistercian order in particular has received much attention as an important player on the high and late medieval market. The order sprung from an attempt to reform Benedictine monasteries . One important aim was to come back to compliance with the rule of Benedict and practice manual labour . In contrast to the Benedictine monasteries , which often owned vast manors and exacted seigneurial dues , Cistercian monasteries were supposed to earn their living via agriculture , viticulture and manufacturing. They thus produced surpluses of grain, vine, cattle, and manufactured products that they sold on the market in nearby towns . As the expansion of the Cistercian order during the twelfth and thirteenth centuries ran parallel to the process of urbanisation , both processes are considered as interconnected: Urban markets gave Cistercians the opportunity to buy and sell products, and in turn the towns benefited from Cistercian supply and demand . Many Cistercian monasteries established outposts in nearby towns to facilitate their business on the urban market (Rösener 2007).
Princely courts should also not be forgotten as actors on the market. Some of the goods produced on the princely domain (see Chap. 3) were sold at the market. More crucially, princely courts fundamentally increased the demand for consumer products: A court consisted of a large number of people who had to be fed and clothed. Furthermore, if a prince wanted to be regarded as a proper prince , he had to show that he did not care too much about money, but could splash out on exotic food, exquisite clothes and so on. Courts can thus be regarded as one of the inventors of conspicuous consumption. In German research, courts as market actors already play an important role (Fouquet et al. 2008; Rothmann 1998, 500), but the interesting results of these studies still have to be connected to the ongoing debates about the increase in market exchange and the commercialisation of premodern Europe.
Recently, actors on the margin of subsistence have attracted the attention of researchers. Fontaine is one of the most famous figures in this field (Fontaine 2014). Her work is a good example of how a thorough analysis of the sources can lead to results that spark interest even among today’s politicians: She argues that not only the wealthy and powerful but also and especially the poor people can profit from the integration into a market economy . “Don’t throw away the market!” is her statement that has stimulated discussions and controversies in France. She argues that participating in the market could be part of a survival strategy of poor people during the Middle Ages, whereas in the course up to modern times the market was more and more regulated, which excluded poor people and thus robbed them of an opportunity to care for themselves. This interest in market actors on the margin of subsistence led to a number of studies on women as actors on the market, since, as Fontaine claims, as in any patriarchal society there were more poor women than poor men, so if one wants to find poor people, it is more promising to study women than men (Fontaine 2011). Whereas Fontaine analyses pawnbroking, which can be regarded as a typical female activity in premodern France, van den Heuvel focuses on Dutch female merchants (van den Heuvel 2007). Peddlers have also recently received some interest as market actors who had to struggle even to gain access to the market (Fontaine 1993; van den Heuvel 2015). These marginal figures drew attention to the second-hand market that provided an important arena for their activities (Fontaine 2011). However, most of these studies deal with seventeenth- and eighteenth-century sources, mostly from France and the Netherlands, since it is difficult to find source material for the time frame that is covered in this handbook. One exception is Park (2005), who analyses hucksters and peddlers in Luneburg, Goslar and Hildesheim in Lower Saxony. These studies remind us that these dimensions of the premodern market, even though they are difficult to study for late medieval times, should not be forgotten.
See reviewed sample studies 22, 25, 26, 29, 30, 31, 42, 43.
Rules and Norms of the Market
A market economy can only be understood if we take into account that markets are embedded in society. This notion can already be found in Adam Smith’s works (van Bavel 2016, 21f.). After the mathematical revolution in economics beginning in the late nineteenth century, however, timeless models of market exchange gained prominence. During the 1970s, North began to raise doubts whether these models help to understand how exactly economies are working (see section “Transaction Costs and Institutions” in Chap. 2). He claims that economic performance depends on the institutions governing economic activities (North 1974; for a summary of his ideas, see North 1990). Due to the pivotal role of institutions as “humanly devised constraints that shape human interaction” (North 1990, 3), this new strand of research was called New Institutional Economics. The notion that institutions underlie economic performance pertains to market exchange as well (if not particularly): The way market exchange works is determined by formal institutions such as urban regulations or princely privileges , as well as by informal institutions such as the norms and beliefs of market actors. Economic sociology (Granovetter 1985) strengthened the position that markets have to be studied as part of a broader society, whose social role models and belief system shape the economic sector as well.
The difference between studies in the tradition of neo-institutional economics and studies in the tradition of economic sociology lies in the emphasis they put on growth : Researchers in the neo-institutional tradition want to find out which institutions promoted economic growth . North (re)launched this strand of research when he suggested that economic exchange was hindered by uncertainties that caused high transactions costs. Efficient institutions reduce transaction costs and hence foster economic growth . According to North, the modern state in the sense of a centralised monarchy created efficient public institutions and laid the ground for the take-off of the European economy in the Late Middle Ages and the early modern period (North 1985). Since transaction costs are difficult to assess, the efficiency of markets cannot be measured exactly, of course. It is thus hard to prove that a certain kind of institution promoted growth . Researchers most often resort to simply taking for granted that there must have been a causal relationship between efficient institutions and growth . For their subject of study, they choose regions for which high growth rates are observed, and then study the institutions that can be found in these regions. Since significant long-term economic growth can first be measured in quantitative terms for the Netherlands and England (see section “Great and Little Divergence” in Chap. 2), most studies in this strand of research deal with specific institutions in those countries. Dijkman, for example, points out how the institutions in fifteenth-century Holland turned out to be favourable, fostering efficient commodity markets and thereby growth (Dijkman 2011).
Before the modern state came into being, urban governments were central in providing formal regulations for the market. In successful market towns , they established common rules of exchange (such as certified weights and measures), monitored places for exchange (like the public scale and warehouses) and supervised brokers and money changers. They granted rights and privileges to certain groups, thereby enabling merchant guilds to function. Princes and landlords also provided part of the institutional framework of markets, most importantly by granting the right of safe conduct to merchants through their territory, which guaranteed that the merchants and their goods would be safe on the journey to and from the market. Protection and security reduced transaction costs (Epstein 2009, 71, 79, 143). But urban regulations were not only installed to guarantee a smooth functioning of the market. They also aimed at ensuring that the urban population was provided with commodities , and especially with foodstuff (Fouquet 2004; Dirlmeier 1978). In times of hunger crises, the urban government often extended the regulations for the food market (Jörg 2008).
A different strand of research emphasises the important role of private institutions in reducing transaction costs . In Greif’s view, who is a leading figure of this camp, the self-governing institutions of merchants , such as networks , companies and guilds , accounted for the largest reduction in transaction costs in the European economy (Greif 2006). In contrast, Ogilvie claims that especially merchant guilds were not promoting growth for all but were just augmenting the gains of the ruling class of merchants (Ogilvie 2011). In his studies on the so-called fundamental problem of exchange, however, Greif combines the analysis of private and public institutions (Greif 2000): According to Greif, every individual who wants to participate in market exchange is confronted with the fundamental problem of exchange: She has to recognise mutually beneficial exchange relations as such, and both parties of a potential exchange have to commit to fulfil the obligations which will arise in the wake of the exchange process. Institutions serve as enforcement for these obligations. They can be public as well as private, but Greif stresses the point that institutions are more than legal rules: “Economic institutions are defined here as a system of social factors – such as rules, beliefs, norms, and organisations – that guide, enable, and constrain the actions of individuals, thereby generating regularities of behaviour” (Greif 2000, 257). Greif sees institutions as self-enforcing regulations that create and sustain economic efficiency.
Urban regulations and merchants ’ customs of course influenced each other in shaping market institutions (De Ruysscher 2009). The towns in the Low Countries such as Bruges, Antwerp and Amsterdam are said to have flourished partly because they accommodated the customs and usances even of foreign merchants into urban law (Gelderblom 2013). Since the institutional set-up differed from place to place, every market varies in some degree from other markets.
Researchers in the sociological and cultural tradition are not so much concerned with growth as with the interactions between economic, social and cultural practices and belief systems. For example, Fontaine understands the market as a form of interaction, as exchange between equals, as fixing a price after discussion. She is especially interested in the role the market played for people struggling to survive, for example, hawkers, pawnbroking women or other people at the margin of survival (Fontaine 2014). Howell claims that social relations in the Low Countries underwent a significant transformation when immovable goods became movable during the Late Middle Ages. This process of commercialisation cannot be regarded as a triumph of market exchange. Rather, market transactions had to be framed in a new market culture to make them morally acceptable, and other forms like gift exchange remained important as well (Howell 2010). The eighteenth-century concept of a moral economy has also regained prominence in current studies since E.P. Thompson introduced the subject into historical research in the 1970s with his studies of the English eighteenth-century working class. Davis applies the idea of a moral economy to the marketplaces of medieval England. He carves out the role which morality, law and practices played in shaping medieval markets (Davis 2012).
Practices and informal institutions are thus a favourite topic for researchers in the sociological tradition of studying markets. Informal markets in particular have gained some prominence in recent studies. It is, however, quite difficult to distinguish formal from informal markets in premodern times (Heebøll-Holm et al. 2019). The distinction derives from modern economics: A formal market is one that is taxed and regulated by some kind of government . Today’s informal markets are often connected with illegal transactions, since from a legal point of view every transaction on a market has to be taxed . Hence, every un-taxed action on an informal market is by definition illegal. The standard case in modern economics is transactions on the formal market, whereas informal market transactions are considered as exceptional. This is not the case with premodern exchange. Not every transaction had to be taxed and regulated by a government , and formal markets were thus not the standard case.
In some instances, though, markets were highly regulated. This is especially true for urban markets in important market towns . The staple right was a very prominent case of market regulation (Gönnenwein 1939; Dijkman 2011, 159–200): If a town (in most cases a port city) had obtained the staple right, it could force merchants to unload their goods and present them for sale for a certain period of time before they were allowed to transport the goods to the next destination. Enforcing the staple right was attractive for a town’s inhabitants, since it made sure that goods would be in supply at the urban market. This regulation of course increased the merchants ’ transaction costs , since they had to stop their trading voyage and offer their goods at that place (see section “Transaction Costs and Institutions” in Chap. 2). On the other hand, it could also reduce transaction costs , because merchants could be comparatively sure that in a town with staple rights some purchaseable goods would be found. In some cases, staple rights could be quite extensive, requiring merchants who passed the city in question with a distance of up to about 100 km to offer or even sell their goods on the urban market. The distinction between the formal, regulated, often urban marketplace and the informal market was thus often a geographical distinction.
See reviewed sample studies 24, 30, 31, 33, 34, 35, 44.
Conclusion
The study of markets in sum deals with a variety of issues, from the emergence of a market economy and its connection to modern growth to the question of how people organised exchange in circumstances very different from our own. The reviewed sample studies in Chap. 7 show how these different issues can be tackled on the basis of a wide range of sources and with different methodological approaches. These reviewed sample studies focus on the history of markets in the Holy Roman Empire. Most of them address questions which were outlined in the second part of this introduction: They study markets as places and events, analyse actors and rules of the market. The emergence of a market economy is mostly discussed for the Netherlands, which formally belonged to the Holy Roman Empire until 1648. The question to what extent or since when other parts or the whole of the economy of the Holy Roman Empire can be regarded as a commercialised or even as market economy has not been widely discussed (with the exception of Ogilvie 2010), but the many divers reviewed sample studies which analyse different elements of the market are already laying an excellent ground for such a discussion. Although, of course, not all existing research on the Holy Roman Empire can be reviewed here, our selection shows how the discussions on the market in the Holy Roman Empire can enrich the study of markets in premodern Europe.