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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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By the year 2000, the idea of networks had developed into social science mainstream. The concept was highly esteemed not only as a metaphor of modern society but also for providing social science and economics with tools seemingly capable of more accurately assessing the structure and dynamics of a world obviously becoming increasingly information-oriented and increasingly globalised. During the previous decade, by applying the pattern of personal networks to firms, an economic dimension was added to the concept of social networks, a concept which had already been in use for quite some time in sociology. In the economics’ literature of the 1990s on business networks, then a new and immensely growing field, the network, known before only as a specific form of social structure, was now appraised as a sort of third principle of coordination for commercial exchange that existed in its own right beside the market and the hierarchy.

With this in mind, and deeply inspired by the early articles of Avner Greif on the Maghribi traders, in which he used several aspects of the network concept for his description and analysis of a medieval Mediterranean system of trade that was based on culture, friendship and reputation without naming it a network (Greif instead called it a ‘coalition’), we prepared a working paper for an international business history conference in 2001. In this paper, we started to make use of the concept of network organisation with respect to the analysis of Hanseatic trade. Originally designed...

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