Merchants and Trade Networks in the Atlantic and the Mediterranean, 1550-1800

Connectors of commercial maritime systems

Manuel Sánchez, Klemens Kaps, Manuel Sánchez, Klemens Kaps, Manuel Herrero Sánchez, Klemens Kaps

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317282129
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This collective volume explores the ways merchants managed to connect different spaces all over the globe in the early modern period by organizing the movement of goods, capital, information and cultural objects between different commercial maritime systems in the Mediterranean and Atlantic basin.

Merchants and Trade Networks in the Atlantic and the Mediterranean, 1550-1800 consists of four thematic blocs: theoretical considerations, the social composition of networks, connected spaces, networks between formal and informal exchange, as well as possible failures of ties. This edited volume features eleven contributions who deal with theoretical concepts such as social network analysis, globalization, social capital and trust. In addition, several chapters analyze the coexistence of mono-cultural and transnational networks, deal with network failure and shifting network geographies, and assess the impact of kinship for building up international networks between the Mediterranean and the Atlantic. This work evaluates the use of specific network types for building up connections across the Mediterranean and the Atlantic Basin stretching out to Central Europe, the Northern Sea and the Pacific.

This book is of interest to those who study history of economics and maritime economics, as well as historians and scholars from other disciplines working on maritime shipping, port studies, migration, foreign mercantile communities, trade policies and mercantilism.

1 Connectors, networks and commercial systems

Approaches to the study of early modern maritime commercial history

Manuel Herrero Sánchez and Klemens Kaps¹

The study of long-distance maritime trade in the early modern period has gained considerable momentum over the last two decades. Traditionally, research was divided between merchant studies, understood as the analysis of single traders and their companies, and more structural accounts of traded commodities or shipping traffic.² By focusing on mercantile agencies and its mechanisms, that is, by combining information from the socio-economic macro-level with a micro-historical approach that puts agents at the centre of research, recent historiography has done much to close this divide. The focus has since been directed to the question of how merchants in the early modern period managed to connect different geographical areas in different parts of the globe and organise the flow of goods, money, information and cultural objects between them.³ This book aims to contribute to this multilayered debate on trade networks in two important ways: first, it tries to stimulate theoretically driven empirical analyses of merchant networks by linking methodological discussions with case studies; second, it develops these arguments in the study of the Mediterranean Sea and its links with the Atlantic Ocean between the sixteenth and the early nineteenth centuries. We believe that the traditional historiographical view has overemphasised the importance of the North Atlantic in the first globalisation process. Indeed, this book demonstrates the important role played by the Mediterranean and Central Europe in the early steps of globalisation. Consequently, we propose to expand the methodological and theoretical framework devised for the analysis of the transatlantic trade to the Mediterranean and the South Atlantic, and also of trade within the boundaries of the European continent.

This approach is fully concerned with the on-going debates on the origins of globalisation and the importance therein of early modern long-distance trade. While some highly influential authors, such as Fernand Braudel and Immanuel Wallerstein, place the exchange of goods at the core of the origins of the unequal division of labour between north-western and eastern and southern Europe and also between Europe and Latin America in the sixteenth and the seventeenth centuries,⁴ other authors have been more sceptical. Thus, Patrick O’Brien stressed the limited weight of foreign, and especially colonial, trade in the overall economic activity of the United Kingdom.⁵ Piet Emmer, for his part, took the debate one step further and questioned whether intercontinental trade was a feature of the ‘Atlantic System’, since transatlantic trade usually did not exceed 2 per cent of the European and American GDPs. Also, trade was exonerated from having caused any lasting negative economic effects in Western Africa, although its devastating consequences, in particular those connected with the slave trade, have been fully recognised. The opposite is true for the Industrial Revolution in Great Britain, which could not have succeeded if the volume of trade had been as small as has been argued.⁶ Based on these interpretations, it was only logical to conclude that globalisation did not begin with Columbus’ arrival in America in 1492, but only with the emergence of railways, steamships and highly developed financial markets in the late nineteenth century, as Kevin O’Rourke and Jeffrey Williamson argued.⁷

These arguments, in any case, are too reliant on econometrician approaches, especially considering the lack of reliable accounts and the fragmentation of sovereignty that characterise the historical period under analysis. Calculation of such variables as the GDP is problematic, and needs to be supplemented with other evidence capable of offering a qualitative point of view on the quantitative data, for example, letters between private individuals, treaties, and diplomatic negotiations.⁸ The opinions of those personally involved in mercantile operations, and of state agents in charge of promoting these operations, and making them more difficult for the enemy, suggests a collective feeling of living in a fully globalised world in which the political and military might of states was the direct result of the state’s, or its commercial subjects’, ability to operate at an intercontinental level. These endeavours were also behind a large number of technical and naval innovations and fostered the dissemination of cultural and religious traits worldwide. In addition, Serge Gruzinski correctly pointed out that these trends resulted in unprecedented processes of hybridisation and cultural assimilation initiated by the Iberian colonial empires, facilitated by Catholic universalism.⁹ Consequently, and despite those like Patrick O’Brien, who tend to underestimate the relevance of colonial trade in the European economy of the period, or those who insist upon focusing on religious and dynastic factors,¹⁰ hegemony seems to have been increasingly related to control over the main raw materials and the key strategic corridors as well as to the strength achieved through the possession of large war navies (the percentage of the budget spent on warships did nothing but increase). The conflict between the powers extended beyond the borders of Europe and became a worldwide struggle. The Dutch East India Company (VOC) became one of the main symbols of the Dutch Republic, but we must not forget that, throughout the seventeenth century, the companies chiefly dealt in high-value trade goods that were transported in no more than 10 to 15 vessels sailing under strong-armed protection; there is no possible comparison with the heavy traffic of the Baltic Sea, on which the original growth of Dutch sea power had been based. This trade played an essential role in the development of a specialised agricultural sector in the Netherlands, but, as noted by Israel, it was infinitely less valuable and less likely to prompt the emergence of the specialised industry on which the economic primacy of the United Provinces was ultimately founded.¹¹ In this regard, at the time few doubted that the ability of the United Provinces to challenge their former sovereign was connected with their impressive expansion in the overseas markets. Indeed, colonial expansion allowed the republic to consolidate their recently gained independence and turned the Dutch emporium into a centre for the supply, redistribution and manufacture of both industrial and luxury goods. In this context, it seems questionable to try to minimise the role of overseas exchange for the Dutch economy, especially considering that access to colonial markets and the end of the theoretical Spanish monopoly soon became one of the key issues in the diplomatic exchange between both states and, indeed, a major stumbling block for peace.¹²

Other arguments against the narrow definition of globalisation that was so ostentatiously shaking historical truisms pointed to the effects of the arrival of American silver, not only on the European economy during the so-called ‘price revolution’ of the sixteenth century but also on seemingly removed phenomena such as demographical trends in China. However, the main argument against those who minimise the importance of international trade in the early modern period is the fact that the world was truly and fully connected only after 1492, so that money, people and commodities could and did flow through worldwide circuits.¹³ It is true that most of the money that the Spanish king used to keep his war machine in permanent motion came from the taxes paid by Castilian, Neapolitan and Sicilian peasants. However, it is also true that the Crown’s credit, which attracted the arrival of many German and Genoese bankers to the monarchy’s financial system, was based on the consolidation of commercial networks throughout the Catholic monarch’s widespread possessions and the constant inflow of American silver, which ultimately became the foundation of Castilian imperialism. This explains why the struggle for hegemony not only took place in the Old World but, from the late sixteenth century onwards and especially after the resumption of the Spanish-Dutch war in 1621, in the overseas colonies. In this regard, Flynn followed the opinion of his contemporaries who identified the Indies as the main cause of the decline of Castile, and pointed out that the massive arrival of precious metals became a barrier for economic development and made possible a military effort that was heavily reliant on the Crown’s credit and beyond its real capabilities.¹⁴

In addition, a closer look at the above-mentioned arguments reveals some support for the globalising effects of trade long before the nineteenth century: even Emmer’s figures demonstrate that the external trade share of the GDPs of both Portugal and the Netherlands was in excess of 10 per cent, which suggests that commerce had a much larger impact than the aforementioned arguments suggest.¹⁵ The monetary influx that this activity involved played a crucial role in facilitating Dutch merchants in launching other commercial ventures, for example in the Ottoman Levant, the Baltic regions and, especially, in Asia, where American silver was considered among the most valuable goods.¹⁶ The endemic commercial deficit with Asia, therefore, had the effect of stimulating other branches of international Dutch commerce; the long military conflict with Madrid forced the republic to develop direct commercial channels with America via the Dutch–Africa–America triangle, which turned the West India Company (WIC), founded in 1621, into a company that essentially dealt with slaves.¹⁷ The peace in 1648 also made it easier for the VOC to control the silver remittances sent from New Spain to the Philippines.¹⁸ As the work carried out by Bruijn, Gaastra and Schöffer demonstrated, the impact of the VOC on the Dutch economy far exceeded the value of its shares or the profit derived from its transactions, which in absolute terms were, no doubt, lower than those from other economic sectors. The VOC, despite internalising the high protection costs, an essential factor for the consolidation of the independence of the United Provinces, had to overcome, because of Asia, a threefold shortcoming which had an overall negative effect on the republic: in ships, due to the large number of vessels that had to meet the regional trade needs; in personnel, because only one-third of the million Dutch émigrés in Asia returned; and in precious metal, which amounted to two-thirds of the exports shipped to Asia.¹⁹ The growing demand for Asiatic products in Europe was, consequently, a constant drain on cash, which gave the company an important advantage over its competitors, because Amsterdam was the main market for precious metals in the continent.

All of this evidence suggests that some ‘hard’ globalisation was happening, an idea which is supported by the example of other globally traded commodities that Europe imported from Asia in the eighteenth century, such as tea, coffee, textiles and porcelain. All of these products were directed at the mass consumer markets, and textiles and porcelain openly competed with European industries, one of the features of the modern globalisation processes. Still, in general early modern globalisation adopted ‘soft’ methods and was mostly regional in scope.²⁰ The shift in international economic integration caused by the arrival of railways, steamships and telegraphic communication was unquestionably immense, and interregional and international connections grew at an unprecedented speed in their wake. Rather than ushering in an entirely new phase, however, these new developments seem to have prompted new directions within an already interconnected system of information and commodity exchange. This is at least the basis of Christopher Bayly’s suggestion differentiating between ‘archaic’ or early modern globalisation and its modern counterpart: the seventeenth and eighteenth centuries did not see an integrated world-system, but rather witnessed the expansion of pre-existing networks from local and regional levels to interregional and intercontinental exchange.²¹ This incipient globalisation process has been masterfully described by Kirti N. Chaudhuri in this illustrative paragraph: ‘American treasure helped to finance Spain’s balance of indebtedness. The cost advantage enjoyed by the Genoese bankers, and later the Dutch and English in entrepot trade accumulated capital in the hands of Europe’s most efficient entrepreneurs. This capital helped to finance the imports of Indian cotton textiles, Asian spices, and Chinese silks and tea. Indian textiles and cowries were in turn exchanged for African slaves who produced new agricultural commodities in the New World for consumption in the Old. The circuit seems to have ended as Barbados sugar sweetened Chinese ...

Table of contents

• Cover
• Half Page
• Title Page
• Copyright Page
• Table of Contents
• List of figures and maps
• List of tables
• List of contributors
• 1 Connectors, networks and commercial systems: approaches to the study of early modern maritime commercial history
• Part I: Merchant networks, early modern long-distance trade and globalisation: theoretical considerations and historiographical reappraisal
• Part II: The social composition of networks: cultural identities versus transnationality
• Part III: Connecting spaces: networks and systems, merchants and political economies
• Part IV: The complexity of networks: formal and informal exchange mechanisms and rupture of merchant cooperation
• Index