Cities of Commerce: an Introduction to the Articles

The Princeton Economic History of the Western World seems to have a patent on important, agenda-setting monographs. Oscar Gelderblom’s Cities of Commerce: The Institutional Foundations of International Trade in the Low Countries, 1250-1650 surely fits this description and earns its inclusion in this important series. Cities of Commerce argues that institutional change was fuelled by urban rivalry; cities competed which each other and as a result adapted commercial, legal and financial institutions to suit the needs of merchants. The book draws on the experiences of three successive commercial success stories: Bruges, Antwerp and Amsterdam from the fourteenth until the seventeenth centuries. These cities managed to attract large groups of foreign and native merchants through the creation of open-access institutions allowing all merchants to trade in these cities. The book is noteworthy in four aspects. Firstly, it synthesizes two social science traditions dealing with the history of long-distance trade prior to the Industrial Revolution: New Institutional Economics and economic history. Scholars in the New Institutional Economics tradition following Douglass North and Avner Greif have singled out those institutions that are thought to have mattered for the spectacular development of trade since the medieval Commercial Revolution, isolated them and verified both their theoretical and practical benefits and constraints. They have done so primarily by means of modelling and game theory in order to identify the key features of these institutions. Economic historians, on the other hand, have pointed out the plethora of institutions that merchants in the past have used. Historians have produced detailed, qualitative descriptions of how and when merchants used particular institutions. Gelderblom combines the strengths of both traditions: analytical precision and historical contextualization.