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The Unmaking of the Mediterranean Trade Hegemony: International Trade Rivalry and the Commercial Revolution

  • Richard T. Rapp (a1)

The shift in the locus of European trade from the markets of the Mediterranean to the North Atlantic overthrew a centuries old pattern of commerce and established the basis for the predominant role of North Atlantic Europe in the era of industrialization. While the expression “commercial revolution” no longer has quite the currency that it once enjoyed, students of the early modern economy have not been negligent about trying to understand the causes of the commercial shift. The impact of entrepreneurship and Weltanschauung, capital accumulation, technical innovation in shipping and industry, and the economic and political organization of nation-states have all received attention from students of the age.

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1 For a skillful synthesis of these researches see Wallerstein, Immanuel, The Modem World-System; Capitalist Agriculture and the Origins of the European World-Economy in the Sixteenth Century (New York, 1974), chs. iv and v. The most recent interesting hypothesis concerning seventeenth century European trade patterns is Reed, Clyde G., “Transactions Costs and Differential Growth in Seventeenth Century Western Europe,” Journal of Economic History, XXXIII (March, 1973) 177190, restated in a broader context in North, Douglass C. and Thomas, Robert Paul, The Rise of the Western World; A New Economic History (New York, 1973), pp. 9394, 134–138. These authors argue that productivity increases in the transactions sectors of the Dutch and English economies experienced sudden improvement, making those nations the most efficient markets of the age. In both statements of the hypothesis the authors acknowledge, but never fully come to terms with the fact that there was precious little novelty in the commercial practices of the North Atlantic traders in the 1600's that would have been unfamiliar to Mediterranean businessmen in the fifteenth century; see Wilson, Charles, “Trade, Society, and the State,” Cambridge Economic History of Europe (New York, 1967), IV, 490.

2 For example, Barbour, Violet wrote, “Geographically, early modern capitalism extended its radius, especially in the penetration of northern and eastern Europe, and in beginning the exploitation of other continents to which the age of discovery had opened seaways. In western Europe trade was slowly shifting from its ancient seats commanding the Mediterranean highway to northern and western ports facing the North Sea or the Atlantic Ocean.” (Capitalism in Amsterdam in the 17th Century [Ann Arbor, Michigan, 1963 reprint], p. 11.)

3 Are we now less impressed by the oceanic discoveries than was Smith, Adam, who wrote: “The discovery of America, and that of a passage to the East Indies by the Cape of Good Hope, are the two greatest and most important events recorded in the history of mankind”? (The Wealth of Nations, Cannan edition, [New York, 1937 reprint], p. 590.)

4 The term is that of Braudel, Femand, Le Méditerranée et le monde méditerraneén à l'epoque de Philippe II, (2d ed., Paris, 1966), I, 354. The quadrilateral is defined by Venice, Milan, Genoa, and Florence.

5 Lane, Frederic C., “The Mediterranean Spice Trade: Further Evidence of its Revival in the Sixteenth Century,” American Historical Review, XLV (1940), 581590, reprinted in Pullan, Brian, ed., Crisis and Change in the Venetian Economy in the Sixteenth and Seventeenth Centuries (London, 1968), pp. 4758. Also see the useful discussion in Wallerstein, The Modern World-System, pp. 215–216. Wallerstein's conclusion that the Mediterranean revival could only be temporary because of basic weaknesses in Italian agriculture and industry is, to my mind, far from conclusive.

6 See below, p. 505. On Venetian industry in detail see, Sella, Domenico, Commercie Industrie a Venezia nel secolo XVII (Venice, 1961), and Richard T. Rapp, Industry and Economic Decline in Seventeenth Century Venice (Cambridge, Mass., forthcoming).

7 See Jensen, Merrill, ed., English Historical Documents, (New York, 1955), IX, 391.

8 Pach, Sigismund, “Favorable and Unfavorable Conditions for Capitalist Growth: The Shift of International Trade Routes in the 15th to 17th Centuries,” in Fourth International Conference of Economic History, Bloomington, Indiana, 1968, Ecole Pratique des Hautes Etudes, 6éme section, Congres et Colloques, XIV (Paris, 1973), p. 59.

9 Taylor, Harland I., “English Merchants and Spanish Prices about 1600,” in Kellenbenz, Herman, ed., Fremde Kaufleute auf der Iberischen Halbinsel, Kölner Kolloquien zur internationalen Sozial-und Wirtschaftsgeschichte, I (Cologne, 1970), 252255.

10 Davis, Ralph, “Influences de l'Angleterre sur le declin de Venise au XVIIème siècle,” in Aspetti e cause delta decadenza economica veneziana nel secolo XVII: Atti del convegno 27 giugno—2 luglio 1957 (Venice—Rome, 1961), p. 187.

11 Fisher, F. J., “London's Export Trade in the Early Seventeenth Century,” Economic History Review, 2d ser., III (1950), 154. I refer to Fisher's table of all exports save “shortcloths,” that is, broadcloths measured in notional shortcloths which went mostly to Russian, Baltic, and North Sea ports during this period.

12 Taylor, “English Merchants,” p. 253.

13 See Ludwig Beutin, “La décadence économique de Venise considerée du point de vue Nord-European,” in Aspetti e Cause, p. 92, n. 2.

14 Vogel, Walther, “Zur Grösze de Europäischen Handelsflotten fan 15., 16. und 17. Jahrhundert,” Forschungen und Versuche zur Geschichte des Mittehlters und der Neuzeit (Jena, 1915), p. 319.

15 Ibid., pp. 316, 319.

16 Davis, Ralph, “Merchant Shipping in the Economy of the late Seventeenth Century”, Economic History Review, 2d ser., IX (1956), 70.

17 Gasparetto, Astone, Il vetro di Murano dalle origini ad oggi (Venice, 1958), pp. 101113.

18 His monthly earnings were the equivalent of 80–100 ducats, about 400 soldi per day; Calendar of State Papers and Manuscripts, Relating to English Affairs, existing in the Archives and Collections of Venice, and in other Libraries of Northern Italy, Rawdon Brown, ed. (London, 1864–1895), XXIV, no. 418, March 26, 1638. In 1630, Venetian master builders received an average daily wage of 68 soldi, approximately one-sixth of the renegade's pay. See Brian Pullan, “Wage-Earners and the Venetian Economy, 1550–1630,” in Pullan, Crisis and Change, p. 158. Note that 20 soldi = 1 lira; 124 soldi = 1 ducat of account.

19 Archivio di Stato di Venezda [henceforth A.S.V.], V Savi, b., 56, Jan. 29, 1613 (m.v.). A senatorial decree allowed a three-month amnesty period for expatriate saponeri to return to Venice unpunished before being declared banditi.

20 An order of the Reformatori dello Studio di Padova forbade the export of all instruments and materials of bookmaking, including “carattere da stampa sotto il name di piombo lavorato”; Ordine of March 10, 1603.

21 Wilson, “Trade, Society, and the State,” p. 527. France was Venice's primary competitor in glasswares, mirrors, and other luxury products in the European market, but it exported wool cloths to the Levant as well. As late as 1723 French exporters were subsidized by the crown. At that time French manufacturers produced more than 70,000 light cloths, most of which were made in Carcassonne for sale in Constantinople; A.S.V., V Savi, n.s. b. 125, fasc. 21, pte. 1, Report of Barbon Morosini, July 2, 1723. On French competition in mirrors, A.S.V., Milizia da Mar., b. 554, fasc. spechieri, n.d. (probably 1696).

22 An extremely crude estimate of the difference in labor costs between Venice and England can be attempted by using the series of builders' wages in Brian Pullan, “Wage-Earners and the Venetian Economy, 1550–1630,” and Brown, E. H. Phelps and Hopkins, Sheila V., “Seven Centuries of Building Wages,” in Essays in Economic History, Carus-Wilson, E. M., ed. (New York, 1966), II, 168178. Using current exchange rates between the ducat and the English pound it can be estimated that for the decade 1620–1630, when a Venetian laborer was paid about 41 soldi per day, an English building tradesman was paid the equivalent of between 17 and 31 Venetian soldi. English masters received roughly the equivalent of 25 to 37 soldi while the Venetian master was paid 66 soldi. These comparisons, of course, tell us nothing about comparative purchasing power.

23 Here we see that before accrediting the Reed/North/Thomas argument, which isolates transaction costs differentials as a source of North Atlantic economic growth, some measure of the reduced costs of using the market will have to be offered in evidence. It seems clear, at this point, that differences in tax policy alone, stemming from differences in institutional background, go further in explaining the relative non-competitiveness of the Venetians than any differences in transaction costs or market efficiency.

24 A.S.V., Consiglio de X, Parti Comuni, filza 182, May 25, 1590. Gaetano Cozzi and Reinhold Mueller kindly brought this important document on smuggling to my attention. The smuggling problem became so intense in the early decades of the seventeenth century that customs agents were armed and ordered to meet contrabanders with force. All work in the private boatyards (squeri) on small boats and barges was scrutinized by customs agents to eliminate the “diabolical artifices” used to defraud the port authorities; A.S.V., V Savi, n.s., b. 45, no. 306 “Contrabandi,” and A.S.V., Secreta, Materia Mista Notabile, fasc. 133.

25 “… et se beni pare che detti pani riescano fini e vaghi niente di meno sono cattivi … et in breve tempo restano senza pello”; A.S.V., Consiglio de X, Parti Comuni, filza 182, May 25, 1590.

26 A.S.V., V Savi, n.s., b. 145, fasc. 49, pte. 2.

27 A.S.V., Consiglio de X, Parti Comuni, filza 182. This information comes from the testimony of a confessed cloth smuggler who ran fake Venetian fabrics into Venice from the flourishing cloth center around Lake Como, before the full onset of the northern incursions. The smuggler reasoned that, in toto, the counterfeit and smuggling in Venice cost the city about 50,000 ducats per year.

28 In a confrontation before the Venetian Board of Trade the woolworkers' guild directly accused the wool merchants of trying to deal in low grades of cloth and of involving themselves in the traffic of foreign cloths whose commerce in Venice was prohibited; A.S.V., Senato, terra, filza 800, June 18, 1668.

29 Davis, Ralph, “England and the Mediterranean, 1570–1670,” in Fisher, F. J., ed. Essays in the Economic and Social History of Tudor and Stuart England in Honor of R. H. Tawney (Cambridge, 1961), p. 125.

30 Calendar of State Papers, Venice, Vol. 23, no. 500, June 27, 1635.

31 Ibid, Vol. 23, no. 665, May 27, 1636.

32 From the earliest days of the trade rivalry to its culmination, the English delighted in the overthrow of Venice in the Levantine cloth trade: “‥ ‥ much wooll is employed in newe draperies, which occasioneth the making of lesse quantity of broade cloth. But the English in Turkey by the cheepenes of theire clothes work out the Venetian and all other” (Sir Julius Caesar's Notes from Privy Council Meeting of January 14, 1615 [1616], published in Friis, Astrid, Alderman Cockayne's Project and the Cloth Trade; The Commercial Policy of England in its Main Aspects, 1603–1625 [Copenhagen, 1927], p. 465.) “[English clothiers] say that a mixture of fine English and fine Spanish [wool] makes a Cloth so much cheaper and more serviceable than of all fine Spanish, that it must needs beat out any Forreign Manufacture … and therefore have the English and Dutch near subverted the Venetian Cloth-Trade in Turkey” (Brittania Languens, London, 1680) reproduced in McCulloch, J. R., ed. Early English Tracts on Commerce [Cambridge, 1954 reprints], p. 322.)

33 A financial obligation in Constantinople brought together the European ambassadors to apportion the common expense according to the amount of trade (in terms of “capital”) each of the nations conducted at that port for three years. The resolution was: England 40 percent, France 26 percent, Venice 26 percent, Flanders 8 percent. (Calendar of State Papers, Venice, Vol. 23, nos. 310, 320, June 23 and July 15, 1634.)

34 Ponting, Kenneth G., The Woollen Industry of South-West England (Bath, 1971), pp. 3132.

35 Bowden, Peter J., The Wool Trade in Tudor and Stuart England (London, 1962), pp. 43, 56. Bowden gives evidence that this was common practice in the Dutch industry as well.

36 Supple, Barry, Commercial Crisis and Change in England, 1600–1642 (Cambridge, 1964), p. 147.

37 Ibid., p. 153.

38 Lipson, E., The Economic History of England (London, 1931), II, 344, and de L. Mann, J., The Cloth Industry in ihe West of England from 1640 to 1880 (Oxford, 1971), p. 18. Despite the great expansion in the quantity of new draperies exported in the first half of the seventeenth century, the total value of broadcloths exported was still far greater than the total value of new draperies, and the proportion of broadcloths headed for southern markets increased in this period.

39 Domenico Sella, “The Rise and Fall of the Venetian Woollen Industry,” in Pullan, Crisis and Change, pp. 106–126.

40 See Carlo Cipolla, “The Economic Decline of Italy,” in Pullan, Crisis and Change, pp. 127–145 and Wallerstein, The Modern World-System, p. 221.

41 In the first century A.D., for example, export industries (principally potterymaking in the Italian peninsula) confronted sudden and overpowering competition from peripheral centers of regional industry in the Roman provinces; see Rostovtzeff, M., The Social and Economic History of the Roman Empire (2d ed.; Oxford, 1957), I, 173, and Oswald, Felix and Price, T. D., An Introduction to the Study of Terra Sigitlata (London, 1920). The trade rivalry which is, I suspect, most familiar to economic historians is the challenge to Great Britain's dominion over world trade in the last third of the nineteenth century, on which the literature is notably abundant. Both of these episodes share with our present case study of the early modem era the elements of theft of method, counterfeit of brand-markings and design, cutthroat pricing, the use of quality as a cost variable, and other lesser leitmotifs.

42 For example, Venetian woolens were grouped under official grades of quality. For each grade of cloth, producers were limited to a stipulated type of wool, a specific density of weave, and a few specific dyestuffs. The purpose was to prevent a mix of cheap and costly characteristics in a single fabric, which might confuse or deceive consumers. Cloth that failed to meet these regulations could not be sold as Venetian cloth and manufacturers who sought to contravene the regulations were liable to prosecution. Other nations were less rigorous about quality control, particularly when their commercial interests were best served by selling cheaper goods.

43 This is the take-off point of all imperfect competition theory. Its analytical consequence is that the product for a given industry ceases to be a datum and becomes an economic variable whose characteristics are part of the competitive spiel. In international trade rivalry, however, a variation will often happen. Products are differentiated, but the intention of entrants is to minimize the subjective differences between their products and the wares of older manufacturers. Differentiation, in other words, is not entirely by choice. If it were possible for an entrant to be entirely successful in a campaign of disguise (so that subjectively the new and old products were indistinguishable to consumers), then both producers would face a single demand curve. The challenger (A), operating under lower cost conditions, might drive a rival (B) entirely from the market without incurring losses by dictating a price below the minimum point of B's average cost curve. Failing the desideratum of homogeneous goods, A may achieve a partially equivalent result under conditions of product heterogeneity. The determinants of A's ability to control B's market share are the absolute differences in cost structure between the two competitive units and the cross-elasticity of demand for the two products, the latter being a function of A's abilities at counterfeit.

44 Weintraub, Sidney, Intermediate Price Theory (Philadelphia, 1964), pp. 214218, 229.

45 Gerschenkron, Alexander, “Economic Backwardness in Historical Perspective,” in the collection of the same name (New York, Praeger, 1965), p. 8. On the general question of quality reduction it is worth noting that in most cases economists, unlike business decisionmakers, are inclined to treat low quality as an effect of deteriorated efficiency rather than as a controllable variable cost; for example, Hirschman, Albert O., Exit, Voice, and Loyalty; Responses to Decline in Firms, Organizations, and States (Cambridge, Mass., 1970).

46 The Provveditori di Comun, official overseers of the Venetian silk industry, rejected orchil dyeing after experimental cloths failed to survive proof in a bath of alum, a test of the long-range durability of the color. The episode is entirely typical of dozens of other attempts at cost-cutting which were rejected by government surveillance; A.S.V., V Savi, b. 477, tomo II no. 15; Ibid., b. 99 and 100, fasc. 59. Stuart England also had quality control regulations, but the new mentality of selling cheap undercut their application, and most serious attempts at enforcement were abandoned by the Interregnum. See Cunningham, W., The Growth of English Industry and Commerce in Modem Times (Cambridge, 1903), II, 203204, and Heaton, Herbert, The Yorkshire Woollen and Worsted Industries from Earliest Times up to the Industrial Revolution, 2d ed. (Oxford, 1965), pp. 177184, 216. Although SirChild's, Josiah observations on the subject of quality (in A New Discourse on Trade first edition, London, 1690) come a bit late for our purposes, they are nevertheless instructive:

All our laws that oblige our people to the making of strong, substantial (and as we call it, loyal) cloth, of a certain length, breadth, and weight, if they were duly put in execution, would in my opinion do more hurt than good, because the humours and fashions of the world change, and at some times in some places (as now in most) slight, cheap, light cloth will sell more plentifully and better than that which is heavier, stronger, and truer wrought; and if we intend to have the trade of the world, we must imitate the Dutch, who make the worst as well as the best of all manufactures, that we may be in a capacity of serving all markets and all humours.

47 Chamberlin, Edward H., The Theory of Monopolistic Competition, 7th ed. (Cambridge, Mass., 1956), p. 62.

48 Even cakes of Venetian soap bore a state seal of quality, and indeed, these too were falsified by foreign competitors: “In più luoghi esteri bollano i loro saponi con bolli di veneti savoneri e li fano credere savoni veneti.” A.S.V., V Savi, n.s., b. 145, fasc. 1.

49 Hoffman, R. J. S., Great Britain and the German Trade Rivalry, 1875–1914 (New York, 1964 reprint), p. 45.

50 On the background of these questions, see: Fisher, “London's Export Trade,” pp. 151–161; Davis, “England and the Mediterranean,” pp. 117–137; Supple, Commercial Crisis and Change, pp. 152–156; Wilson, C. H., “Cloth Production and International Competition in the Seventeenth Century,” Economic History Review, 2d series, XIII (1960), 209221; and D. C. Coleman, “An Innovation and its Diffusion: The ‘New Draperies,’” Ibid., 2d series, XXII (1969), 417–429.

51 Coleman, “An Innovation and its Diffusion,” p. 422. On the appearance of kerseys in the Mediterranean, see Braudel, Méditerranée, pp. 555, 560, 562.

52 Sella, “Rise and Fall,” p. 119.

53 Ibid., p. 119.

54 Coleman, “An Innovation and its Diffusion,” p. 420.

55 Ibid., p. 425.

56 Ibid., p. 425.

57 The distance from London to Constantinople was about 2 1/3 times farther than from Venice to Constantinople, and the maritime innovations of the 1600's put no great premium on speed. While an English ship of the 1580's was able to make the voyage from London to Messina in a month's time, the Flanders galleys of Venice could do as well in the early part of the century; see Tenenti, Alberto, Piracy and the Decline of Venice, 1580–1615, trans. Janet, and Pullan, Brian (London, 1967), p. 170, n. 4; and Lane, Frederic C., Venice, A Maritime Republic (Baltimore, 1973), p. 351. Of course, the Dutch and the English managed increasingly to convey larger amounts with an increase of security while employing a smaller crew. Still there is no evidence to suggest that the differential in transportation costs between north and south was so great as to allow northerners to underprice southerners in the southern marketplace, ceteris paribus. We need to remember also that transportation services were very much in the international public domain, so that advantages owing to the development of new techniques were not easily confined to the exclusive benefit of the innovating nations. In fact, it would seem that little effort was made to restrict the spread of modern ship technology in the 1600's. The Dutch were primarily responsible for productivity-boosiine innovations in ship manufacture and they readily sold ships to their rivals, the English. Both the Dutch and English in turn willingly became purveyors to the southern fleets. By the early 1600's, large proportions of the merchant fleets of both Genoa and Venice were foreign-built, mostly in Holland and England. See Lane “Venetian Shipping,” p. 42, and Navires et constructeurs, ch. xii; and Gatti, Luciana, “Compravendita di imbarcazioni mercantili a Genova (1503–1645),” in Guerra e commercio nell'evoluzione. della marina genovese tra XV e XVII secolo (Genoa, Centro per la storia della tecnica in Italia del Consiglio Nazionale delle Ricerche, 1973), II, 174179.

58 Rapp, Industry and Economic Decline, ch. iii.

59 For wool cloth see Sella, “Rise and Fall,” and Commerci, pp. 117–118; for shipbuilding, Lane, Frederic C., “Venetian Shipping during the Commercial Revolution,” American Historical Review, XXXVIII (1933), 219239, reprinted in Pullan, Crisis and Change, pp. 22–46, and Navires et constructeurs à Venice pendant la Renaissance, (Paris, 1965), ch. xii; for soap, Sella, Commerci, appendix G, p. 132; and A.S.V., V Savi, n.s., b. 145, fasc. 1. The number of active soap cauldrons in the city dropped over the seventeenth century from forty to seven, and output was reduced from about 13 million pounds of soap in 1600 to 2.5 million in 1700.

60 Rapp, Industry and Economic Decline, ch. v.

61 Ibid., ch. iii. These figures refer to those guilds that were subject to conscription for galley crewmen by the Naval Personnel Administration, representing about two-thirds of the total labor force. A.S.V., Milizia da Mar, buste 538–557 is the source of the data.

63 Frederic Lane remarks that while eighteenth-century Venice little resembled her former self of 1600—an industrial city—there was much about her to recall the still more glorious fifteenth century to mind. In fact, in the last decades of the 1700's, when the Northern powers had long left the Mediterranean to contest in other arenas, Venice once again became tte leading European trader in Syria; Venice, A Maritime Republic, pp. 423–425.

64 “It was primarily the Mediterranean market that first helped to rescue the English economy from the disastrous consequences of the ruin of Antwerp and the subsequent devastation of Central Europe, for so long the chief outlet for the exports of the kingdom. Not until the eighteenth century was its commercial importance to be exceeded by that of the New World and of the East Indies.” Ramsey, G. D., English Overseas Trade during the Centuries of Emergence (London, 1957), p. 60.

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