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Institutions of Hanseatic Trade

Studies on the Political Economy of a Medieval Network Organisation

Ulf Christian Ewert and Stephan Selzer

The merchants of the medieval Hanse monopolised trade in the Baltic and North Sea areas. The authors describe the structure of their trade system in terms of network organisation and attempts to explain, on the grounds of institutional economics, the coordination of the merchants’ commercial exchange by reputation, trust and culture. The institutional economics approach also allows for a comprehensive analysis of coordination problems arising between merchants, towns and the ‘Kontore’. Due to the simplicity and flexibility of network trade the Hansards could bridge the huge gap in economic development between the West and the East. In the changing economic conditions around 1500, however, exactly these characteristics proved to be a serious limit to further retain their trade monopoly.


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Chapter 1: Hanse History and Economics – a New Institutional Economics Perspective on Hanseatic Trade

Points of Departure

Hanse Research, the Economy and Economics

New Institutional Economics and the Hanse – a Challenge

Chapter 2: Reputation, Trust and Culture – the Network Structure of Hanseatic Trade and its Benefits

Hanseatic Trade and its Historiographical Evaluation

The Network Structure of Hanseatic Trade

Forms of Commercial Exchange and Cooperation

Firm size and Network Organisation

Overlapping Circles of Family and Business

Coordination of the Network Trade System

The Problem of Coordination

The Agency Problem

A Game-theoretical Analysis of Medieval Commercial Exchange

The Viability of Hanseatic Reciprocal Trade

Non-hierarchical Means of Coordination

An Economic Assessment of the Hanse’s Network Organisation of Trade

Individual Economic Benefits

Cost Savings

The Minimisation of Contractual Risks

Concluding Remarks

Chapter 3: A ‘Small World’ – Reconstruction and Meaning of the Hansards’ Social Networks

Network Analysis as a Method to Describe Social Structure

The Theoretical Concept of Social Networks

A Brief Sketch of the Methodology of Social Network Analysis ←5 | 6→

Social Networks within the Hanse – Examples and Corresponding Sources

Conditions of the Emerging Networks – Population Growth and Migration

Kinship Networks among Hansards

Wills as a Source of Network Reconstruction – the Case of Lübeck

Social Proximity vs. Spatial Vicinity – Societies and Neighbourhoods

Social Networks of Hansards as a ‘Small World’

Chapter 4: Bridging Distances and Filling Gaps – Strategies to Handle Heterogeneous Commercial Environments

Extension of European Trade to the Baltic Sea – Merchants and Cities

Unequal Hanseatic Commercial Settings – Sources of Heterogeneity

The Dissimilarity of Mercantile Environments

Handling a Variety of Goods

Bridging and Filling the Gap – Strategies to Balance the Effects of Heterogeneity

Hedging Against the Risks of Transportation

Creating Formal Institutions

Networking and Reciprocal Trade

Standardisation and Homogenisation of Commercial Institutions and Culture

Success and Failure of Hanseatic Strategies to Cope with Heterogeneity

Chapter 5: State of Cities, Commercial Trust, or Virtual Organisation? – Structure and Coordination of the Hanse

The Paradoxical Outward Appearance of the Hanse

Structure of the Hanse

A Theoretical Concept – the Network Network Approach and Virtual Organisations

The Hanse’s Network Trade and its Virtual Character

The Organisational Multiplexity of the Hanse←6 | 7→

Problems of Coordination and Institutions to Enhance Cooperation

The First-order Problem of Coordination

The Second-order Problem of Coordination

Determinants of Fruitful Cooperation and of Cooperation Failure

Chapter 6: Competitive Advantage or Limit to Business? – Contingency and Path Dependence

The Context of the Hanseatic Network Organisation

Economic Effects of the Hanseatic Network Organisation

Effectiveness and Profitability of Hanseatic Trade

Economic Growth and Collective Welfare

Distribution of Income and Wealth in the Hanse towns

The Scope of Hanseatic Trade

The Development of the Hanse’s Network Organisation and Path Dependence

Network Size, Cultural Borders and the Network Paradox

Adaptations Missed Because of the Success of the Network Organisation

The Multiplicity of Structure, and a Mismatch of Structure and Coordination

The Change of Economic Conditions

Chapter 7: Perspectives of Research into Hanseatic Trade – the Impact of the Model of Network Organisation

A Short Look Back

Methodological Advances and Newly Published Sources

Network Organisation as a Formative Pattern of Pre-modern Trade

The Hanse as a Political Organisation

The Structural Change around the Year 1500

Insights Relevant to Historical Economics of Trade

Bibliography←7 | 8→ ←8 | 9→