Economic credit in Renaissance Florence

Journal of Modern History

Volumn 83, Issue 1, 2011, Pages 1-47

  Padgett, John F ^a   McLean, Paul D ^b  

^a UNIVERSITY OF CHICAGO   (United States)

^b RUTGERS UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 79955137338     PISSN: 00222801     EISSN: None     Source Type: Journal    
DOI: 10.1086/658247     Document Type: Article

References (218)

1. Richard A. Goldthwaite, "The Medici Bank and the World of Florentine Capitalism," Past and Present 114 (1987): 3-31, 23-24.
2. For an overview, see Raymond de Roover, "The Organization of Trade," in The Cambridge Economic History of Europe, vol. 3, Organization and Policies in the Middle Ages (Cambridge, 1963), 42-118.
3. See also Richard A. Goldthwaite, The Economy of Renaissance Florence (Baltimore, 2009).
4. See, e.g., Karl Polanyi, "The Economy as an Instituted Process," in Trade and Markets in the Early Empires, ed. Karl Polanyi, Conrad M. Arensberg, and Harry W. Pearson (Glencoe, IL, 1957), 243-69
5. and Mark Granovetter, "Economic Action and Social Structure: The Problem of Embeddedness," American Journal of Sociology 91 (1985): 481-510.
6. John F. Padgett and Paul D. McLean, "Organizational Invention and Elite Transformation: The Birth of the Partnership System in Renaissance Florence," American Journal of Sociology 111 (2006): 1463-1568
7. John F. Padgett and Christopher K. Ansell, "Robust Action and the Rise of the Medici, 1400-1434," American Journal of Sociology 98 (1993): 1259-1319
8. John F. Padgett, "Open Elite? Social Mobility, Marriage and Family in Renaissance Florence, 1282-1494," Renaissance Quarterly (Summer 2010): 357-411.
9. David Herlihy and Christiane Klapisch-Zuber, Tuscans and Their Families: A Study of the Florentine Catasto of 1427 (New Haven, CT, 1985). The Herlihy- Klapisch-Zuber data set is publicly available online at http://www.stg.brown.edu/projects/catasto.
10. Archivio di Stato di Firenze (hereafter ASF), Catasto 64-85, contain scribal summaries (campioni) of all Florentine households' tax declarations in 1427.
11. ASF, Catasto 15-63, contain the original tax submissions (portate) of the Florentine households. The latter set of documents was consulted whenever the first set of documents did not itemize the entire list of debtors and creditors for any given business.
12. Historians have often found examples of cheating on Renaissance Florentine tax returns, but mostly these refer to catasti after the original one in 1427: e.g., Raymond de Roover, The Rise and Decline of the Medici Bank, 1397-1494 (New York, 1966), 25, 30, 73-74, 99, 236, 312-13
13. William Caferro, "The Silk Business of Tommaso Spinelli, Fifteenth-Century Florentine Merchant and Papal Banker," Renaissance Studies 10 (1996): 421-22.
14. A study that finds truthful reporting in 1427 is Rebecca Emigh, "Loans and Livestock: Comparing Landlords' and Tenants' Declarations from the Catasto of 1427," Journal of European Economic History 25 (1996): 705-23. To sidestep this difficult issue of lying, we analyze below the existence versus nonexistence of a credit, not the reported value of the credit. In addition to the administrative procedure of comparing creditor's and debtor's declarations, tax officials could also request to see legally liable business account books in the case of disputes. While hardly foolproof, these two procedures at least inhibited massive cheating in 1427.
15. Richard Goldthwaite has brought to our attention three surviving account books, which overlap with our catasto summaries of them: those of Andrea Banchi, silk manufacturer; Alamanno di Jacopo Salviati, wool manufacturer; and Lorenzo di Palla Strozzi, merchant banker.
16. There are only two other published studies of premodern credit on this scale. One is Philip T. Hoffman, Gilles Postel-Vinay, and Jean-Laurent Rosenthal, Priceless Markets: The Political Economy of Credit in Paris, 1660-1870 (Chicago, 2000).
17. That study of Parisian financial markets covers a period two centuries after ours. Comparison is limited because that is a study of brokered personal lending, rather than commercial credit. The most comparable other research, albeit without the equivalent social and political contextual data of ours, is a recent quantitative study of medieval Genoese contracts: Quentin Van Doosselaere, Commercial Agreements and Social Dynamics in Medieval Genoa (Cambridge, 2009). We briefly discuss this welcome new book in the Conclusion.
18. Paul D. McLean and John F. Padgett, "Was Florence a Perfectly Competitive Market? Transactional Evidence from the Renaissance," Theory and Society 26 (1997): 209-44. The full data set, including both personal and business debts, contains 15,317 debts; the company subset analyzed here contains 4,992 debts.
19. The export sector was composed of the following industries: (a) Florentine international merchant banks resident in non-Tuscan locations; (b) merchant trading companies in Pisa; (c) domestic banks and merchant banks in Florence; (d) silk manufacturers (setaiuoli); (e) wool manufacturers (lanaiuoli) in the San Martino district (high-quality cloth); (f) wool manufacturers (lanaiuoli), other districts (lowerquality cloth); (g) cloth retailers (ritagliatori); and (h) cloth dyers (tintori). Companies were coded into industries on the basis of their self-identification, their location, or their primary transactional content.
20. The compliance of the firms located abroad with catasto requirements evidently was handled with some flexibility, perhaps due to the special difficulties they faced in submitting their books for examination in Florence.
21. Our procedure to arrive at this estimate is explained in John F. Padgett and Paul D. McLean, "Economic and Social Exchange in Renaissance Florence," Santa Fe Institute Working Paper 02-07-032 (Santa Fe, NM, 2002), 45-46, http://www.santafe.edu/research/publications/publications-working-papers.php.
22. Two types of transactions present in our complete data set are systematically excluded from analysis in this article: credits and debts with artisans and firms working outside the export-oriented economy and credits and debts with individuals rather than with companies. Had it been possible to calculate the more correct denominator of "all debts and credits among companies in export-oriented industries," percent coverage would have been much higher than the conservative numbers reported here.
23. Fixed-cost assets in this setting were low. Cloth manufacturing occurred in the home through the putting-out system, and hence required low investments.
24. Federigo Melis, Aspetti della vita economica medievale: Studi nell'Archivio Datini di Prato (Siena, 1962), table 69.
25. De Roover, Rise and Decline of the Medici Bank, 47, 55, 69
26. Richard A. Goldthwaite, Private Wealth in Renaissance Florence (Princeton, NJ, 1968), 48.
27. Tommaso Spinelli, in the second half of the fifteenth century, earned profit rates in silk comparable to those among merchant bankers: Philip Jacks and William Caferro, The Spinelli of Florence: Fortunes of a Renaissance Merchant Family (University Park, PA, 2001), 78-79.
28. The rather astonishing total debt figure for this one branch was 158,238 florins. The corresponding total credit figure was 147,987 florins. Cosimo's companies, like others but even more so, relied on massive volumes of two-way turnover and credit flow, organized through a partnership system.
29. This statement remains true when recalculated on the basis of total florin value, instead of on the basis of total numbers of debts. The total monetary value of wool, San Martino, credits to all merchant banks combined (i.e., international merchant bank plus Pisa merchant plus domestic bank) was 40,592 florins, compared to credits of 58,392 florins to ritagliatori. And the total value of wool, other, credits to all merchant banks combined was 18,247 florins, compared to credits of 32,260 florins to ritagliatori. However, credits sent to merchant banks tended to be larger on average than those sent to ritagliatori.
30. Merchant bankers still received roughly twice as much in volume of their cloth input from wool manufacturers as from silk manufacturers. Even though wool was on the decline, and silk on the rise, the older wool industry was still much larger in 1427 than the newer silk industry.
31. Again, to measure this in terms of monetary value, domestic banks gave 33,662 florins of credits to setaiuoli in our data set, whereas they gave 27,080 florins to wool, San Martino, lanaiuoli and 15,682 florins to wool, other, lanaiuoli. As a baseline comparison, there were over two-and-a-half times more lanaiuoli companies than setaiuoli companies in 1427 (see table 1).
32. These data imply economically healthy banking and merchant-banking industries in 1427. This is not inconsistent, however, with a soon-to-come recession in 1430-33 induced by the fiscal crisis caused by war with Lucca. See De Roover, Rise and Decline of the Medici Bank, 230
33. Anthony Molho, Florentine Public Finances in the Early Renaissance, 1400-1433 (Cambridge, 1971), 153-63
34. Elio Conti, L'imposta diretta a Firenze nel Quattrocento, 1427-1494 (Rome, 1984), 34. The high leverage rates documented in table 2 help to explain the vulnerability of an otherwise healthy economy in 1427 to recession in 1430-33, since exorbitant tax extractions needed to be paid in cash, not in credits.
35. Franco Franceschi, Oltre il "Tumulto": I lavoratori fiorentini dell'Arte della Lana fra Tre e Quattrocento (Florence, 1993), 13.
36. Hidetoshi Hoshino, L'Arte della Lana in Firenze nel basso medioevo (Florence, 1980), 227-31
37. Sergio Tognetti, Un'industria di lusso al servizio del grande commercio: Il mercato dei drappi serici e della seta nella Firenze del Quattrocento (Florence, 2002), 16.
38. Debates continue about the causes of this decline, but the argument in the literature that seems the most compelling to us is the rapid growth of English woolen-cloth production in this same period. This deprived Florence of much of its primary input-namely, high-quality English raw wool. Hoshino, L'Arte della Lana, 233
39. E. M. Carus-Wilson and Olive Coleman, England's Export Trade, 1275-1547 (Oxford, 1963), 122, 138.
40. Eventually when the Ottomans conquered Byzantium, Florentine garbo woolen cloth found favor in the Levant, prompting a recovery in the low end of the wool industry in the second half of the fifteenth century. Hoshino, L'Arte della Lana, 239-44, 268-75.
41. Bruno Dini, "L'industria serica in Italia. Secc. XIII-XV," in La seta in Europa, Secc. XIII-XX, ed. S. Cavaciocchi (Florence, 1993), 91-123
42. Franco Franceschi, "Florence and Silk in the Fifteenth Century: The Origins of a Long and Felicitous Union," Italian History and Culture 1 (1995): 3-22
43. Tognetti, Un'industria di lusso al servizio del grande commercio, 11-42.
44. In 1427, 66.4 percent of merchant bankers of all types were upper-class popolani or magnates: see Padgett and McLean, "Economic and Social Exchange in Renaissance Florence," 48.
45. Conversely, 64.6 percent of setaiuoli were middle and lower class in social background (i.e., new men, new-new men, and never admitted to Priorate). Hence, the economic sponsorship of silk manufacturing by merchant bankers through liberal credit had the social-class overtones of patron-client relations. For comparison, 48.8 percent of wool manufacturers in 1427 were popolani or magnates. For cloth retailers, it was 39.7 percent, and for cloth dyers, it was 14.8 percent. See also Tognetti, Un'industria di lusso al servizio del grande commercio.
46. There is a long and contentious literature about whether there was a "depression in the Renaissance." One viewpoint was articulated by Robert S. Lopez and H. A. Miskimin, "The Economic Depression of the Renaissance," Economic History Review 14 (1962): 408-26.
47. They pointed to the decline of the wool industry, among other things. A contending view was anchored by Carlo M. Cipolla, "Economic Depression of the Renaissance," Economic History Review 14 (1962): 519-24.
48. And by Richard A. Goldthwaite, Wealth and the Demand for Art in Italy, 1300-1600 (Baltimore, 1993), 13-39.
49. They pointed to the rise of the silk industry, among other things. Judicious overviews of this debate are provided by Judith C. Brown, "Prosperity or Hard Times in Renaissance Italy?" Renaissance Quarterly 42 (1989): 761-80
50. And by Franco Franceschi, "The Economy: Work and Wealth," in Italy in the Age of the Renaissance, ed. John M. Najemy (Oxford, 2004), 124-44. We regard the fifteenth-century adaptation of the Florentine economy as a success story in the narrow sense that the silk industry was developed to offset the decline in wool. Whether the successful development of silk was enough quantitatively to offset the sharp contraction of wool is a topic we leave to others to decide.
51. Because of this fact, our statistical summary underrepresents the significance of recurrent transactions funded through credit. When single nonreciprocated credits (coded here as "transactional") were current accounts, then "relational" would have been a better linguistic description of that. We could have cleaned up this source of measurement error in our data if content information had been recorded for more than 11 percent of the credits.
52. De Roover, Rise and Decline of the Medici Bank, 108-41.
53. Federigo Melis, "La grande conquista trecentesca del 'credito di esercizio' e la tipologia dei suoi strumenti sino al XVI secolo," in his La Banca pisana e le origini della banca moderna, ed. M. Spallanzani (Florence, [1972] 1987), 307-24.
54. Raymond de Roover, "The Development of Accounting prior to Luca Pacioli according to the Account Books of Medieval Merchants," in his Business, Banking, and Economic Thought in Late Medieval and Early Modern Europe, ed. Julius Kirshner (Chicago, [1956] 1974), 143-46.
55. For documentation of the timing and rate of the diffusion of bilateral-format accounting in Florence, see Padgett and McLean, "Organizational Invention and Elite Transformation."
56. In today's Italian Civil Code (chap. 26, arts. 1823-24) il conto corrente refers to a contract between two private parties in which no money is exchanged but rather reciprocal credits are recorded. We thank Alessandro Lomi for bringing this modern descendent to our attention.
57. The complication is that there could be more than one account linking the same pair of persons, if multiple startup deposits or credits were made for whatever reasons.
58. In the 1416 founding contract of a company with partners Giovanni de' Medici, Benedetto and Larione de' Bardi, and Matteo di Andrea Barucci (ASF, Mediceo avanti embedil Principato [hereafter MAP] 94, fol. 116), Matteo promised "to keep good accounts, as if they were money in cash."
59. De Roover, Business, Banking, and Economic Thought, 121-25.
60. There was a third transitional form of accounting in which credits were collected in the first half of the account book and debts in the second half, with elaborate cross-referencing between the two halves (De Roover, Business, Banking, and Economic Thought, 132-34).
61. This form permitted doubleentry profit calculations without making current accounts the fundamental unit of the system. A good example of this intermediate form is found in the Alberti libri mastri of 1348-59, published and analyzed by Richard A. Goldthwaite, Enzo Settesoldi, and Marco Spallanzani, eds., Due libri mastri degli Alberti: Una grande compagnia di Calimala, 1348-1358 (Florence, 1995). In particular, "Accounts with other firms or outside persons were opened, for the most part, for single transactions. If later a client presented himself another time, the accountant of the Alberti preferred to open new accounts" (113). Truly ongoing current accounts did exist in the 1348-59 Alberti libri mastri, but only for Alberti family members and for company employees (so-called conti interni).
62. At the international level, where different currencies were involved, current accounts could become quite complex, internally differentiating into four separate financial components: nostro (our) and vostro (your) accounts for each merchantbanking side of the ongoing economic relation. Raymond de Roover, "Early Accounting Problems of Foreign Exchange," Accounting Review 19 (1944): 381-407. The Bardi correspondence of 1404-5 and the bilanci in the 1427 catasto, discussed below, more commonly used the expressions per noi (for us, on our account) and per voi (for you, on your account).
63. Marcel Mauss, The Gift: Forms and Functions of Exchange in Archaic Societies (New York, [1925] 1967)
64. Alvin Gouldner, "The Norm of Reciprocity," American Sociological Review 25 (1960): 161-78
65. Andrew Strathern, The Rope of Moka: Big-Men and Ceremonial Exchange in Mount Hagen, New Guinea (Cambridge, 1971).
66. Hence, "a French satirist, in the fifteenth century, marveled at the ability of the Italians to do business without money. In dealing with them, he said, one never sees or touches any money; all they need to do business is paper, pen, and ink" (De Roover, "Early Accounting Problems of Foreign Exchange," 381).
67. Goldthwaite, Economy of Renaissance Florence, chap. 6, discusses the use of "offset" among private Florentine individuals, as a form of "banking" outside of banks, without making reference to anthropological social exchange. We thank Richard Goldthwaite for prepublication access to this impressively broad and deeply researched work, the capstone of a brilliant career. We would add that "offset" (or as we would say "relational credit") behavior was characteristic of the core of Florentine merchant banking, as well as of Florentines as private citizens. That the same lending behavior was characteristic both of businesses in markets and of private people in their friendships reinforces our point about the homology between capitalist business corrispondenti and social exchange.
68. Economic logic bleeding into the social is evident in Florentine family diaries or ricordanze, which often tell the narrative history of a family within the format of that family's account books. These ricordanze described personal events, and sometimes even feelings, mixed together with money matters.
69. For well-documented examples of this company plasticity, see Sergio Tognetti, "L'attività di banca locale di una grande compagnia fiorentina del XV secolo," Archivio Storico Italiano 155 (1997): 595-648.
70. Florence Edler de Roover, "Andrea Banchi, Florentine Silk Manufacturer and Merchant in the Fifteenth Century," Studies in Medieval and Renaissance History 3 (1966): 223-85, esp. 271
71. Gertrude Richards, ed., Florentine Merchants in the Age of the Medici: Letters and Documents from the Selfridge Collection of Medici Manuscripts (Cambridge, 1932).
72. Having only one outstanding debt at a time, of course, does not preclude that debt from being part of an iterated sequence of debts. One piece of anecdotal evidence from the catasto supports our strong sense that many of our so-called transactional credits were iterated. Parigi di Tommaso Corbinelli's bilanci stand out for reporting the dates on which credits were initiated. One entry, a credit he had with Zanobi di Gherardo Cortigiani & Co. for fifty-three florins, is crossed out and marked pagato on May 20. Subsequently, he records a credit with the same company dated November 14. Thus, our reported relational-credit figures certainly underestimate the true rate, were it possible to include repeat business in our operational definition of relational exchange.
73. Vespasiano da Bisticci, Renaissance Princes, Popes and Prelates: The Vespasiano Memoirs; Lives of Illustrious Men of the XVth Century (New York, [ca. 1480] 1963).
74. Data are compiled from the annual guild censuses of banks from 1340 to 1399 contained in ASF, Arte del Cambio 11, 14.
75. Lauro Martines, The Social World of the Florentine Humanists, 1390-1460 (Princeton, NJ, 1963)
76. Goldthwaite, Private Wealth in Renaissance Florence.
77. Francis William Kent, Household and Lineage in Renaissance Florence (Princeton, NJ, 1977).
78. Gene Brucker, The Civic World of Early Renaissance Florence (Princeton, NJ, 1977).
79. Michael Baxandall, Painting and Experience in Fifteenth-Century Italy (Oxford, 1988).
80. Padgett and Ansell, "Robust Action and the Rise of the Medici".
81. Jacks and Caferro, Spinelli of Florence.
82. Ronald E. Weissman, Ritual Brotherhood in Renaissance Florence (New York, 1982), 35.
83. Padgett and Ansell, "Robust Action and the Rise of the Medici," 1263.
84. Herlihy and Klapisch-Zuber, Tuscans and Their Families, 56.
85. As Francesco Datini, the "merchant of Prato," would have liked to have done: Iris Origo, The Merchant of Prato: Daily Life in a Medieval Italian City (New York, 1957), 82-83.
86. Richard C. Trexler, Public Life in Renaissance Florence (Ithaca, NY, 1980), 134.
87. These data, collected over twenty years, were coded for purposes of Padgett's larger research project, which is documenting and studying the coevolution of political, economic, and kinship networks in Florence over two centuries, from 1300 to 1500. Currently, there are 53,152 Florentines in Padgett's ACCESS social-network database: 40,381 males and 12,771 females. Padgett gives special thanks to the people cited in the acknowledgment footnote for helping him with this large task.
88. Parent-child relations were inferred from last and middle names, since Florentine males took the name of their father as their own middle name (as in Giovanni di Francesco), and from numerous collateral sources of dating information. This large task was complicated by the fact that names are often not consistent across archival sources. Currently, there are 1,732 genealogically linked families in the data set, each visually displayable into computerized family trees. See online appendix to Padgett "Open Elite?" for an itemization of these families.
89. Dated marriages were coded from numerous sources, the most important being the fourteen volumes of the Carta dell'Ancisa, located in the ASF. Most of the original dowry contracts, from which dell'Ancisa worked, have now been lost. There are 11,039 marriages in the current Padgett data set, estimated to comprise about 40-50 percent of all marriages between 1350 and 1500 of Florentines with last names. See Padgett, "Open Elite?" for data details and statistical analysis of these marriages.
90. Florence was divided administratively into four quarters. Each quarter was subdivided into four gonfaloni, or wards, making sixteen gonfaloni in all. Unfortunately, parish information was registered too sporadically in the catasto to be useful, there being no official tax reason to register.
91. Information on both neighborhood and taxable personal wealth is contained in the 1427 catasto and is available online at http://www.stg.brown.edu/projects/catasto. In addition to integrating this online data set into his relational data set, Padgett has coded and computerized other Florentine tax censuses as well: namely, the 1351 estimo, the 1378 prestanza, the 1403 prestanza, the 1458 catasto, and the 1480 catasto. Padgett thanks Sam Cohn for providing microfilm copies of the 1351 estimo and the 1378 prestanza. He also thanks Anthony Molho who generously provided the 1480 catasto data set coded by him and Julius Kirshner.
92. All members of the Priorate or city council from 1282 to 1500 (11,312 members in all) were coded by Padgett from an early eighteenth-century copy of the Priorista Mariani (ASF, Manoscritti 248-52) located at the Newberry Library in Chicago- namely, Priorista descritto a Tratte riscontro con quello delle riformagioni e con alter scritture publiche. All members of the Mercanzia, or commercial court, from 1310 to 1500 (3,316 members in all) were coded by Astorri, McLean, Padgett, and Prajda from presenthe Fondo della Mercanzia located in the ASF. Subsequent to our independent coding efforts, the Tratte office-holding data coded by David Herlihy before he died became available on the Web (http://www.stg.brown.edu/projects/tratte), thanks to the labors of R. Burr Litchfield and his assistants. From these online resources, Xing Zhong has integrated the political offices of Buonuomini, Gonfalonieri, and various guild consuls into the Padgett relational data set.
93. Scrutiny votes in 1433, secret to citizens at the time, are recorded in ASF, Tratte 359, for Tre Maggiore public offices.
94. Social-class background, in the Florentine context, refers to the date of first entry of a patrilineal ancestor to the Priorate and hence can be reconstructed from Priorate office-holding data, together with family genealogies. Popolani were Florentine patrilineages who first were elected to the Priorate from 1282 to 1342; new men were Florentine patrilineages who first entered the Priorate from 1343 to 1377; new-new men (our label, not theirs) were Florentine patrilineages who first entered the Priorate from 1378 to 1433; magnates were old "feudal" families specifically prohibited from holding Priorate office in 1293: Carol Lansing, The Florentine Magnates: Lineage and Faction in a Medieval Commune (Princeton, NJ, 1991), 239-40.
95. Subsequently, some of the branches of these families were rehabilitated through specific legislation: Christiane Klapisch-Zuber, Retour à la cité: Les magnats de Florence, 1340-1400 (Paris, 2006), 453-57. The subcategory of "ex-magnates" was created to cope with such rehabilitations. Any Florentine patrilineage not included in the above categories is labeled "families never admitted to Priorate" (by 1433).
96. Membership in the 1433-34 Medici and Albizzi political factions, previously analyzed in Padgett and Ansell, "Robust Action and the Rise of the Medici," was originally reconstructed and reported in Dale Kent, The Rise of the Medici: Faction in Florence, 1426-1434 (Oxford, 1978), 352-57.
97. A logit regression is a statistical procedure for measuring the effect of a set of independent or "predictor" variables on whether an outcome will occur-in our case, the presence or absence of a credit tie between any given pair of companies. Within this procedure, we controlled for heterogeneity. That means that we used company ID as a fine-grained categorical variable, to control for potentially important missing factors for which we do not have data. This conservative technique makes it more difficult to detect statistical significance, by correcting observed coefficients' estimated standard errors.
98. This was computed as follows: (total number of dichotomized credits of giving company) _ (total number of dichotomized debits of receiving company)/(total number of dichotomized credits in the market in which they conduct their joint business). This is the expected number of between-company credits, if all that is known is the credit volumes (sizes) of the respective companies in that market.
99. Use of these binary variables is important to control for sample bias: namely, the fact that directly observed company tax records are more likely to produce credits for our data set than are companies only indirectly observed.
100. In Padgett and McLean, "Organizational Invention and Elite Transformation," 1513, we reported that social class in 1427 was statistically significant for domestic-banking partnerships for all three social classes. Social class, in other words, influenced partnership (how banks were formed), but not commercial credit (what those banks did).
101. We are referring to the debate between Goldthwaite, Private Wealth in Renaissance Florence;
102. and Kent, Household and Lineage in Renaissance Florence, on the salience within Renaissance Florence of nuclear family versus patrilineage.
103. Nuclear in-law relations were statistically significant six times, but we do not report this in table 5 because the number of examples of marrying the sister of another company's partner was small.
104. Family was almost always insignificant in all markets involving ritagliatori. Indeed almost none of our social-context variables are significant in these relatively "impersonal" markets.
105. Padgett and McLean, "Organizational Invention and Elite Transformation," 1536, document that Florentine domestic merchant bankers were wealthiest in 1427, compared to 1351, 1378, 1403, 1458, and 1480.
106. Samuel K. Cohn, The Laboring Classes in Renaissance Florence (New York, 1980).
107. D. V. Kent and Francis William Kent, Neighbours and Neighbourhood in Renaissance Florence: The District of the Red Lion in the Fifteenth Century (Locust Valley, NY, 1981).
108. Christiane Klapisch-Zuber, "Kin, Friends, and Neighbors: The Urban Territory of a Merchant Family in 1400," in Women, Family, and Ritual in Renaissance Italy (Chicago, 1985), 68-93.
109. Francis William Kent, "Ties of Neighborhood and Patronage in Quattrocento Florence," in Patronage, Art, and Society in Renaissance Italy, ed. Francis William Kent and Patricia Simons (Oxford, 1987), 79-98.
110. Nicholas A. Eckstein, The District of the Green Dragon: Neighborhood Life and Social Change in Renaissance Florence (Florence, 1995).
111. Gene A. Brucker, Florentine Politics and Society, 1343-1378 (Princeton, NJ, 1962), 126, 131.
112. Kent, Rise of the Medici, 68, 178.
113. Compare Klapisch-Zuber, Tuscans and Their Families, 89.
114. Padgett, "Open Elite?" 25.
115. For the nine-person Priorate or city council, elected tours of duty were for two months, during which time councilors lived in the Palazzo Vecchio, or city hall, leaving their business to be run by others. After electing a large number of eligibles every five years through an oligarchic voting procedure called the scrutiny, successful name tags were placed into a monastically controlled bag, from which actual officeholders were selected randomly. Candidates did not know that they had been selected for city council until their name was drawn. The random component of this two-staged voting procedure was designed to minimize control of the state by small factions. For the evolution of Florentine voting procedures, see John M. Najemy, Corporatism and Consensus in Florentine Electoral Politics, 1280-1400 (Chapel Hill, NC, 1982).
116. and Nicolai Rubinstein, The Government of Florence under the Medici, 1434 to 1494 (Oxford, 1966).
117. Gene Brucker, ed., Two Memoirs of Renaissance Florence: The Diaries of Buonaccorso Pitti and Gregorio Dati (New York, 1967), 125-26.
118. Najemy, Corporatism and Consensus in Florentine Electoral Politics, 299-300, 302.
119. L. F. Marks, "The Financial Oligarchy in Florence under Lorenzo," in Italian Renaissance Studies, ed. E. F. Jacob (London, 1960), 123-47.
120. Molho, Florentine Public Finances in the Early Renaissance, 166-82.
121. Anthony Molho, "Politics and the Ruling Class in Early Renaissance Florence," Nuova Rivista Storica 52 (1968): 401-20.
122. Ronald G. Witt, "Florentine Politics and the Ruling Class, 1382-1407," Journal of Medieval and Renaissance Studies 6 (1976): 243-67
123. Najemy, Corporatism and Consensus in Florentine Electoral Politics, 263-76
124. Padgett and Ansell, "Robust Action and the Rise of the Medici," 1261.
125. Padgett, "Open Elite?" 9, 47.
126. Molho, Florentine Public Finances in the Early Renaissance, 166-82.
127. Anthony Molho, "Cosimo de' Medici: Pater Patriae or Padrino?" Stanford Italian Review 1 (1979): 5-33.
128. Padgett and Ansell, "Robust Action and the Rise of the Medici," 1276-77, 1305-6.
129. See Padgett and McLean, "Organizational Invention and Elite Transformation," and references therein.
130. See Padgett and McLean, "Organizational Invention and Elite Transformation," and references therein., 1474-85, 1548-60.
131. The voluminous correspondence of the Milan branch of the Datini system offers copious evidence of this coordinated cooperation. See Luciana Frangioni, ed., Milano fine trecento: Il carteggio Milanese dell'Archivio Datini di Prato (Florence, 1994).
132. Padgett and McLean, "Organizational Invention and Elite Transformation," 1494-1522.
133. Cohn, Laboring Classes in Renaissance Florence, 52 and 118-23, has shown that greater rates of intermarriage across neighborhoods at the level of the elite was offset by decreased rates of intermarriage across neighborhoods at the level of working classes.
134. The effect is similar to percolation models in physics and biology, which exhibit sudden phase transitions in both aggregate flow and autocatalytic self-organization once the density of ties in random networks reaches a threshold critical value. "Giant component" connectivity suddenly emerges. See Stuart A. Kauffman, The Origins of Order: Self-Organization and Selection in Evolution (New York, 1993), 308.
135. On politics, see Cohn, Laboring Classes in Renaissance Florence.
136. Najemy, Corporatism and Consensus in Florentine Electoral Politics.
137. Padgett and McLean, "Organizational Invention and Elite Transformation," 1474-85.
138. Padgett and McLean, "Organizational Invention and Elite Transformation," 1535-39.
139. The public certification aspect of office holding is clear from the fact that Priorate memberships were statistically significant, even with the simultaneous inclusion of scrutiny votes in the regressions. Scrutiny votes could be considered a more precise measure of reputation, but because they were secret they did not broadcast collective assessments of onore publicly.
140. Marvin B. Becker, "The Renaissance Territorial State and Civic Perspective," in Florence in Transition (Baltimore, 1968), 2:201-50.
141. Najemy, Corporatism and Consensus in Florentine Electoral Politics, 262-300.
142. Brucker, Two Memoirs of Renaissance Florence, 130.
143. Brucker, Two Memoirs of Renaissance Florence, 139-40.
144. ASF, Catasto 66, fol. 421ff.
145. Because of our focus on reciprocal corrispondenti, the extensive theoretical literature in economics on asymmetric principals and agents is not really relevant. That is more relevant to employers and employees or to home-office partners and overseas branch managers.
146. On Datini, see Frangioni, Milano fine trecento.
147. On Bardi, see ASF, MAP 84, 87, 94. Andrea Bardi, like Goro Dati, was still actively in business in our 1427 data set.
148. For Florentine examples, see Padgett and Ansell, "Robust Action and the Rise of the Medici," on the "robust action" of Cosimo de' Medici.
149. Paul D. McLean, The Art of the Network (Durham, NC, 2007), esp. 1-34.
150. and Ronald Weissman, "The Importance of Being Ambiguous: Social Relations, Individualism, and Identity in Renaissance Florence," in Urban Life in the Renaissance, ed. Susan Zimmerman and Ronald Weissman (Dover, DE, 1989), 269-80.
151. Weissman (Ritual Brotherhood in Renaissance Florence, 1-42), on "Judas the Florentine," cogently discusses the dark side of the credit behavior analyzed here. Lying and cheating, while no doubt existing (and documented here), were not common enough to destroy the system.
152. Frangioni, Milano fine trecento, letter 657: Manno di ser Iacomo & Co. in Milan to the Datini company in Barcelona, March 24, 1397. This and subsequent translations are by McLean.
153. ASF, MAP 87, fol. 341r: Andrea Bardi to the Orlandini in Bruges, April 6, 1405.
154. Note that prohibited trade is specified more in terms of people than in terms of types of transactions. See also Andrea Bardi's letter to Domenico and Poldeo Pazzi in Paris, March 27, 1405.
155. (ASF, MAP 87, fol. 352r), where he instructs them to honor bills of exchange for any amount with the Tornabuoni of Bruges, the Medici of Venice, and the Bardi companies of Barcelona and Florence, but imposes limits of 500 or 1,000 florins on exchanges involving certain other companies: the Sacchi, Antonio Grisolfi, Zanobi di Taddeo Gaddi of Venice, Guglielmo del Pontico of Lucca, and so on. Instructions written in 1441 for Gerozzo de' Pilli, the Medici's partner in London.
156. (ASF, MAP 94, fol. 214ff.
157. See also de Roover, "Andrea Banchi," 91) remain substantially the same as those written around 1400.
158. The expression "pay it and post it to our account" (pagate e ponete a nostro conto) became a common feature of business correspondence in the 1390s. The earliest example we found in Datini's Milan correspondence appears in late 1383 (Frangioni, Milano fine trecento, letter 334).
159. A variant of the expression appears in a letter of March 1387 from Lemo and Ghiselo and partners of Milan to the Datini company in Pisa (Frangioni, Milano fine trecento, letter 137), the first occurrence we find between companies not tied by a shared partner.
160. Florence Edler, A Glossary of Medieval Terms of Business (Cambridge, 1934), 34.
161. ASF, MAP 87, fol. 339r.
162. Frangioni, Milano fine trecento, letter 751: Giovanni Borromei to Datini and his company in Barcelona, April 1400.
163. Frangioni, Milano fine trecento, letter 751: Giovanni Borromei to Datini and his company in Barcelona, April 1400, letter 606: Manno di ser Iacomo & Co. in Milan to the Datini company in Barcelona, December 16, 1396.
164. ASF, MAP 87, fol. 353r: Francesco Bardi to Francesco Mannini in Bruges, June 5, 1405.
165. For recent scholarship on the topic of usury, see Odd Langholm, The Legacy of Scholasticism in Economic Thought: Antecedents of Choice and Power (Cambridge, 1998).
166. Giacomo Todeschini, I mercanti e il tempo: La società cristiana e il circolo virtuoso della ricchezza fra Medioevo ed età moderna (Bologna, 2002).
167. Giovanni Ceccarelli, Il gioco e il peccato: Economia e rischio nel tardo Medioevo (Bologna, 2003).
168. Lawrin D. Armstrong, Usury and Public Debt in Early Renaissance Florence: Lorenzo Ridolfi on the Monte Commune (Toronto, 2003).
169. Giacomo Todeschini, "La riflessione etica sulle attività economiche," in Economie urbane ed etica economia nell'Italia medievale, ed. Roberto Greci, Giuliano Pinto, and Giacomo Todeschini (Laterza, 2005).
170. and Diego Quaglioni, Giacomo Todeschini, and Gian Maria Varanini, Credito e usura fra teologia, diritto e amministrazione (Rome, 2005).
171. On guidance pamphlets, see Langholm, Legacy of Scholasticism in Economic Thought, 10.
172. and Todeschini, "La riflessione etica sulle attività economiche," 184.
173. See Todeschini, "La riflessione etica sulle attività economiche," 185.
174. Langholm, Legacy of Scholasticism in Economic Thought, 61ff.
175. See McLean, Art of the Network, esp. chap. 4.
176. Leon Battista Alberti wrote an extended debate on the various contemporary meanings of the idea of amicizia: see The Albertis of Florence: Leon Battista Alberti's Della Familia, ed. and trans. Guido A. Guarino (Lewisburg, PA, [ca. 1433] 1971), bk. 4.
177. As Weissman, Ritual Brotherhood in Renaissance Florence, 40, puts it, "It is useful to remember that although personal relations in the Renaissance were often accompanied by demonstrations of strong affection, it was the perception of moral obligation, not the modern criterion of psychological intimacy, that distinguished relations between friends from relations between strangers. And Florentines could be cold and calculating in their acquisition and cultivation of personal relations."
178. Alberti, Albertis of Florence, 263-73.
179. Weissman, Ritual Brotherhood in Renaissance Florence, 36-41, gives many quotations to support this.
180. Richards, Florentine Merchants in the Age of the Medici, 85: Giovanni Maringhi to ser Niccolo Michelozzi, May 4, 1501.
181. ASF, MAP 87, fol. 339r: Andrea de' Bardi to the Orlandini company in Bruges, March 26, 1405.
182. In practically identical terms, Bardi also wrote to the Baldesi company in Bruges that "we have wanted, and still want, to settle this dispute as one must do between friends" (ASF, MAP 87, fol. 346r: July 6, 1405).
183. And several times in the same letter he claimed to have acted toward them "with love and faith, as one must do between friends." According to another letter he wrote the same day to the Orlandini (ASF, MAP 87, fol. 347v), he believed that between friends "one may be more forthright in speech" and remarked that "we hold it dear that you have spoken from your heart at length."
184. Frangioni, Milano fine trecento, appendix, letter 8: Francesco Datini to Tieri di Benci in Avignon, August 4, 1392.
185. See Alberti, Albertis of Florence.
186. McLean, Art of the Network, chap. 3.
187. and Albert Rabil, Knowledge, Goodness, and Power: The Debate over Nobility among Quattrocento Italian Humanists (Binghamton, NY, 1991).
188. ASF, MAP 87, fols. 343r and 343v. Honor, he noted elsewhere, required that corrispondenti look out for one another's salvation (salvezza) as well as their own (fol. 345v).
189. ASF, MAP 87, fols. 343r and fol. 335v.
190. Frangioni, Milano fine trecento, appendix, letter 8: Francesco Datini to Tieri di Benci in Avignon, August 4, 1392.
191. Frangioni, Milano fine trecento, appendix, letter 18: Tommaso di ser Giovanni to Lorenzo di Tingo, May 28, 1400.
192. ASF, MAP 87, fol. 337r: letter of October 1, 1404, from Andrea de' Bardi to Orlandini company in Bruges.
193. Honor typically communicated both an obligatory, internalized commitment and an expectation of assistance by others-a duality succinctly expressed by Bardi in a letter to Simone and Iacopo Covoni in the fall of 1404 (ASF, MAP 87, fol. 337v). Here, he both expressed his obligation to them (in su quello vi si scrisse esserne voi obrighato) and urged them to honor their obligation to him: "as long as we both shall live I am certain you will do your duty."
194. ASF, MAP 87, fol. 340r: Andrea de' Bardi to Lorenzo di Dinozzo & Co. in Avignon, April 4, 1405.
195. See Jacks and Caferro, Spinelli of Florence, 75-76, 303-4.
196. On the notion of fama in general, see Thelma Fenster and Daniel Lord Smail, eds., "Fama": The Politics of Talk and Reputation in Medieval Europe (Ithaca, NY, 2003).
197. Weissman, Ritual Brotherhood in Renaissance Florence, 28.
198. See McLean, Art of the Network, chap. 6.
199. Federigo Melis, ed., Documenti per la storia economia dei secoli XII-XVI (Florence, 1972), doc. 10: October 1395.
200. Reinhold C. Mueller, The Venetian Money Market: Banks, Panics, and the Public Debt, 1200-1500 (Baltimore, 1997), 16 and more generally chap. 1.
201. See also Reinhold C. Mueller, "The Role of Bank Money in Venice, 1300-1500," Studi Veneziani 3 (1979): 47-96.
202. Tognetti, "L'attività di banca locale di una grande compagnia fiorentina del XV secolo."
203. Indeed the Florentines took care of Venetian international banking needs (Mueller, Venetian Money Market, 255-56).
204. Frederic C. Lane, Andrea Barbarigo: Merchant of Venice, 1418-1449 (Baltimore, 1944), 163-71.
205. and "Venture Accounting in Medieval Business Management," Bulletin of the Business Historical Society 19 (1945): 164-73.
206. De Roover Business, Banking, and Economic Thought, 161-64.
207. Van Doosselaere, Commercial Agreements and Social Dynamics in Medieval Genoa, esp. chap. 4.
208. While the volume of credit relations is roughly comparable between our studies, his data on notarial contracts thinly cover a long span of time, 1154-1406, whereas our data from the catasto thickly cover one year. Van Doosselaere explicitly challenges the "individualistic" stereotype of medieval Gemoa modeled by Avner Greif, Institutions and the Path to the Modern Economy (Cambridge, 2006).
209. Robert J. Reynolds, "Genoese Trade in the Late Twelfth Century," Journal of Economic and Business History 3 (1931): 362-81.
210. R. D. Face, "Techniques of Business in the Trade between the Fairs of Champagne and the South of Europe in the Twelfth and Thirteenth Centuries," Economic History Review, 2nd ser., 10 (1958): 427-38.
211. Rosalind Kent Berlow, "The Development of Business Techniques Used at the Fairs of Champagne," Studies in Medieval and Renaissance History 8 (1971): 3-31.
212. "I found no fewer than forty-nine credit agreements tying him to forty-four different people" (Van Doosselaere, Commercial Agreements and Social Dynamics in Medieval Genoa, 144).
213. Jacques Heers, Genova nel '400 (Milan, 1983), 135-41.
214. One exception is Jacques Heers, ed., Le livre de comptes de Giovanni Piccamiglio, hommes d'affairs Génois, 1456-1459 (Paris, 1959).
215. For useful but incomplete steps in this direction, see Neil J. Smelser and Richard Swedberg, eds., The Handbook of Economic Sociology (New York, 1994, 2005).
216. and James E. Rauch and Alessandra Casella, eds., Networks and Markets (New York, 2001), and the many works cited therein.
217. McLean, Art of the Network, chap. 1.
218. John F. Padgett, Doowan Lee, and Nick Collier, "Economic Production as Chemistry," Industrial and Corporate Change 12 (2003): 843-77, esp. 854-55 and 863-64.