Fusaro M. (2006) Old and new commercial networks in the 17th-century Mediterranean

Fusaro Maria (2006) “Cooperating mercantile webs in the early modern Mediterranean. ‘Old style’ v. ‘new style’ commercial web”, paper given for the XIV International Economic History Congress Helsinki, session 37, 16 p.


Warning: this is the summary of a work in progress; all potential mistakes are mine.

The author’s goal in this paper is to address the question “did the Mediterranean trade networks experience an evolution of their structures as happened in the rest of the world” during the age of global expansion? She uses the Venetian possessions in the eastern Mediterranean – the so-called Stato da Mar from the loss of Cyprus (1571) to the beginning of the War of Candia (1646) as a case study to come up with an answer (1).

The English and the Greek networks

Definition of a network: “a network consists of a group of people who are in a consistently sustained over time contact through commercial interests and actions, having as a common goal to profit economically from commercial activities”. The English merchants working for the Levant Company in the Venetian territories had little family links with the principals in London (unlike those working in the Ottoman territories) but were often each other’s kinsmen. It appears that there were two parallel networks within the same company. The trade with Venice was less prestigious than with the Ottoman Empire (less contact between diplomacy and trade), thus the English merchants in the Stato da Mar were from a lowest social strata than their colleagues in South West Asia (2).

The Greeks were the necessary intermediaries between the English merchants and the Ionian and Balkan markets. They also allowed them to seize the important currant export trade. The Greek network was based on kinship, ethnicity and religion, hence an archetypal traditional commercial network, while the English company is considered as more modern. Despite this theoretical difference, both groups had very similar business techniques (3):

Financing the Stato da Mar

Venetians had always been suspicious towards speculative finance and had always preferred commodity trade. But, as the politico-military conjuncture forced the state to increase its defence and diplomacy expenditure in Candia (Crete) and Constantinople. To achieve this the government had to rely on the merchants active in that area (the bill of exchange provided them with a 6% interest, comparable to the returns of the public debt) (6). The defence effort in the Levant was costing the state 170,000 ducats a year (more than half the budget) by the end of the16th century (7).

The Dutch and English operators became increasingly important after 1600 and provided the state with financial support and warships (8). This, coupled with the fact that Venetian merchants in the Ottoman Empire had to very often use – neutral – English ships to carry their ware, gave the English an important leverage. This also contributed to diminish the fiscal revenues of the Venetian embassy in Constantinople (as the English traders paid taxes to their ambassador); the resulting cash shortage forced the diplomats to borrow money from these very northern merchants. Consequently, by the late 1610s, the financial operations of the Venetian state in the eastern Mediterranean depended on the merchants(9).

Before the 1620s, those merchants were mostly a handful of Venetian aristocrats, after a great deal of traders from the whole of the Mediterranean world and beyond were involved in these operations(10). This also was of course a fast and reliable way for the merchants to transfer their money from the Levant to Venice. A minority of these bills of exchange were payable in the continent’s fairs such Besançon, mostly by Florentine intermediaries (11). Along the English and the Dutch merchants, the Jewish traders’ share in this system was very significant.

Conclusion(s)

This research made clear that (1) the old commercial route between the Levant and Venice was still very much alive (these tens of thousands of ducats of profits, the merchants wanted to transfer to Venice show it very clearly), (2) the Venetians merchants were being replaced by foreigners, (3) the large and impersonal modern networks of the northern companies were not clearly superior to the traditional ones as the large number of non-northern merchants transferring their money to Venice indicates. This show that the shift from traditional commercial practices to modern ones was neither fast nor linear.

Old and new co-operated happily, or more precisely to succeed the new needed the support of the old. The real novelty in Venice and elsewhere was the opening of the public finance world to less socially prominent actors. Each operator was handling smaller sums then before and the number of financial centres was growing too fast for kin-based networks to be everywhere. (14).What arose was a sort of consortium between the Venetian state and a pool of foreign merchants. A similar phenomenon was observable at a greater scale in Spain with the Genoese and Jewish bankers.

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