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Oscar Gelderblom, Cities of Commerce: The Institutional Foundations of International Trade in the Low Countries, 1250-1650

David Stasavage
p. 121-124
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Oscar Gelderblom, Cities of Commerce: The Institutional Foundations of International Trade in the Low Countries, 1250-1650, Princeton: Princeton University Press, 2013, 312 pages, ISBN 9781400848591

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Crédits : Princeton University Press

1In this fascinating book Oscar Gelderblom offers a new explanation for Europe’s commercial development during the late medieval and early modern eras. Focusing on the development of Bruges, Antwerp, and Amsterdam during their periods of primacy, Gelderblom argues that Europe’s political fragmentation gave individual cities the incentive to establish institutions and policies favorable to trade. It has long been suggested that Europe’s political fragmentation was somehow linked to its early economic development. What is new in this book is the focus at the urban, as opposed to national level. This is a book with many insights that will be read by scholars in a range of disciplines including economics, history, political science and sociology. It is accessible and a pleasure to read at the same time that it conveys detailed knowledge about the organization of trade. It will certainly be a reference in debates about European commercial development for years to come.

2The starting point for Gelderblom’s analysis is a critique of two existing politico-economic theories for European commercial development. The first is the institutionalist theory most closely associated with Douglass North, and later Daron Acemolgu and James Robinson. This theory suggests that development depended on the existence of territorial states with institutions of limited government. The problem with this argument, as this book emphasizes, is that much early European commercial development occurred outside of such a setting. So, some other factor must have been operating. The second existing theory involves the importance of private order contract enforcement, an idea most closely associated with the scholarship of Avner Greif. The central idea here is that merchants operating outside the purview of the state were able to find multiple ways of mutually enforcing contracts. The problem with this second explanation is that recent scholarship has shown that groups previously thought to have operated in this manner often operated in the shadow of state institutions. Moreover, groups formed to ensure enforcement could also create barriers to outsiders, leading to stagnation of trade. Again, some other factor must have been at work.

3So, if it was neither limited government nor private order enforcement that drove commercial development then what was it? To answer this question Gelderblom turns to an old idea in a new guise. Scholars have long wondered whether Europe’s political fragmentation favored economic development, perhaps because no one state was big enough to subsume markets inside of it. Yet there has never really been anything approaching an empirical test of this theory. Gelderblom uses the same logic, but he applies it at the municipal level as opposed to the level of the territorial state. As he suggests, this makes a tremendous amount of sense for the simple reason that most of the governance related to commerce in Europe at this time was implemented at the municipal level and not the national or state level. For Gelderblom, Europe’s cities, or at least a good number of them, existed in an environment where they needed to attract merchants who could relatively easily take their business elsewhere. Therefore, urban governments felt compelled to take direct action to support the development of commerce, and even if this meant providing security and support for new traders from the outside who might jeopardize the position of established insiders. This is an argument directly analogous to those made in more recent decades where it is argued that globalization forces governments to adopt market friendly policies.

4How convincing is this claim? Gelderblom’s strategy is to offer the experiences of Bruges, Antwerp, and Amsterdam as exhibits one, two, and three in support of his claims. The great strength of this book involves the extensive evidence that Gelderblom presents to show exactly how trade was organized in these three cities. He devotes separate chapters to support for trade within cities, cross border issues, how conflicts were resolved, and how trade was protected in an era of physical insecurity. In each of these domains and for each of the three cities we see very clear evidence of how the pressure of competition prompted municipal authorities to support trade and to do so in a manner that did not simply privilege home traders. It seems very hard to dispute Gelderblom’s claims.

5We can see that the choice to focus on Bruges, Antwerp, and Amsterdam has an obvious advantage. It allows for focusing on three cities where the competition mechanism was in action and where there is ample evidence to trace it. As an overview of the history of trade in these three contexts this is already a very important contribution. However, the question the reader is left asking is how representative these three cities were of European urban development more generally? This is critical to the extent we see this book as also presenting a challenge to existing politico-economic theories of European state development.

6Gelderblom does not offer comparative empirical evidence to address the above question. He does, however, lay out three conditions that he believes were necessary for his competition mechanism to operate. We can consider each of these in turn to see what they say about the applicability of his theory and its implications.

7The first of these three conditions was that a city needed to have geographic access to international markets. This is a rather obvious condition, but sometimes stating the obvious can produce interesting new conclusions. Existing work by other scholars generally assumes that merchants in such contexts would be more likely to hold political power, and it was the fact that merchants directly held power that mattered for policy choice. If Gelderblom is right, then the merchants did not need to worry about expressing their political voice in this way. The mere threat of their exit would achieve the same result. Future scholars should consider this idea more explicitly for a broader selection of cities.

8The second of the three conditions was that merchants needed to be “footloose.” Otherwise there was no risk of exit, and no incentive for a municipal government to cater to merchant interests. Gelderblom very plausibly suggests that this footloose property was greatest in contexts where trading cities were geographically proximate and could service the same hinterland. This helps to establish why his competition mechanism would have been particularly prominent in the Low Countries. However, it may also mean that his theory may only explain the incidence of commercial development in certain very specific regions. Future work should explore this question. It should also ask what types of mercantile activities would be more likely to have this “footloose” property.

9As a third condition for competition to arise, Gelderblom emphasizes the role of urban autonomy. More specifically he states, “the political autonomy of commercial cities in late medieval and early modern Europe gave their municipal government both the financial resources and the legal power to adapt institutional arrangements to changes in the scale and scope of trade.” This is a positive view of political autonomy, which contrasts with the view that elites in politically autonomous cities tended to use their position to create barriers to entry into markets, privileging insiders at the expense of new entrants. The latter view is most prominently illustrated by the scholarship of Stephan Epstein, but it is also an idea that has a very long history. For Epstein barriers to entry into urban markets were actually lower in cases where a city was subject to rule by a territorial prince. There is certainly evidence that territorial princes sometimes played this role, and in multiple regions across the European continent. Ultimately, what future work should then do is to ask when urban autonomy operated in the manner in which Gelderblom describes and when it instead served mainly to entrench existing groups at the expense of outsiders.

10Oscar Gelderblom has successfully introduced a new politico-economic theory for European commercial growth. Up to now the power of urban rivalry has been ignored by scholars interested in “big picture” theories of European growth. This can no longer be the case. Future work should take his ideas and see how broadly they can be applied in Europe, or for that matter elsewhere. Ultimately, this will help tell us whether urban rivalry primarily explains early commercial development in the Low Countries, or whether it might help explain the pattern of commercial development in Europe more generally. In the end, this is a book that I hope will be read widely by all scholars interested in the political economy of state and commercial institutions.

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David Stasavage, « Oscar Gelderblom, Cities of Commerce: The Institutional Foundations of International Trade in the Low Countries, 1250-1650 », Œconomia, 5-1 | 2015, 121-124.

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David Stasavage, « Oscar Gelderblom, Cities of Commerce: The Institutional Foundations of International Trade in the Low Countries, 1250-1650 », Œconomia [En ligne], 5-1 | 2015, mis en ligne le 01 mars 2015, consulté le 18 décembre 2017. URL : http://journals.openedition.org/oeconomia/1098

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