Table Of ContentOUP CORRECTED PROOF – FINAL, 05/05/16, SPi
The InvIsIble hand?
OUP CORRECTED PROOF – FINAL, 05/05/16, SPi
OUP CORRECTED PROOF – FINAL, 05/05/16, SPi
The Invisible hand?
How Market Economies have Emerged
and Declined since 500
ad
bas v an bavel
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Preface
There are very many people to thank. In writing this book, I greatly enjoyed the
company of a host of young scholars who have worked with me at Utrecht
University in recent years: Michele Campopiano, daniel Curtis, Jessica dijkman,
erika Kuijpers, auke Rijpma, and Jaco Zuijderduijn. They made possible great
progress in this field, by way of their empirical research and skilful analyses of early
market economies. Their research, and my own, was financed through a grant by
the netherlands Organisation for scientific Research (nWO) for the project
‘economic growth and stagnation in the pre-industrial era: Iraq, Italy and the low
Countries, 600–1700’, undertaken in Utrecht in the period 2007–12. The results
of the project also inspired me to formulate the hypotheses to be tested in the
european Research Council (eRC)-sponsored project ‘Coordinating for life’ (eRC
advanced grant no. 339647). I gratefully acknowledge the financial support offered
by the nWO and eRC.
bram van besouw, Rutger Claassen, Oscar Gelderblom, Maarten prak, and Jan
luiten van Zanden read and extensively commented on a first draft of the manu-
script. The comments of these Utrecht colleagues greatly helped me to improve the
book. Through his careful and critical reading of an early version of the text,
Maarten prak forced me to rephrase and clarify many passages of the book. a more
mature version of the book was read by sheilagh Ogilvie (Cambridge) who shared
her thoughts on many of these issues with me, in part through critical comments,
and thus stimulated me to do another round of revisions. Clearly, writing this
book was only possible thanks to their help.
Other colleagues, too, have read parts of the book. Michael Morony (University
of California, los angeles), Jessica dijkman (Utrecht University), and Maaike van
berkel (University of amsterdam) helped me with their comments on Chapter 2,
daniel Curtis (Utrecht University) and Guido alfani (bocconi) with their comments
on Chapter 3, Michele Campopiano (York) with his suggestions for Chapters 2 and 3,
Geoff hodgson (hertfordshire) with his comments on the introduction and
conclusion, and lewis evans, with his Ma thesis (Utrecht University), and ann
Coenen (Utrecht University) through finding complementary information,
especially for Chapter 5. also, I thank Jedidja Inkelaar and Ilona luijsterburg for
their technical editing of the references, auke Rijpma for helping with the graph,
and annelies Tukker for her help with the maps and references. I should also very
much like to thank eileen power, who corrected the english of the manuscript and
shielded me from evil sins against the rules of the english language.
parts of this book were tried out as papers, presented at the Royal dutch academy
of sciences workshop on ancient Markets (amsterdam, 2011), the histomat reading
group (amsterdam, 2011), and the economic history core seminar in Cambridge
(2011), and at meetings at hong Kong University of science and Technology
(2012), at Cass economics in beijing (2012), at Ghent University (2013),
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vi Preface
and at University of California, los angeles (2014), at the WInIR conference
in Greenwich (2014) and the economic and social history seminar at Utrecht
University (2014). I would like to thank all participants of these meetings for their
comments. More indirectly, I benefited from, and greatly enjoyed, the discussions
and brainstorms with my colleagues involved in the interdisciplinary research pro-
gramme ‘Institutions for Open societies’, at Utrecht University. Together with the
department of economic and social history, this research programme has offered
me the lively and high-quality setting that has helped me to write this book.
This academic community forms a main part of my life. at times, but not often,
I hope, this is to the detriment of my own little community, at home. This is a
good moment to let you know, astrid, sarah, and noortje, that I consider being
with you the most precious thing in my life.
OOUUPP CCOORRRREECCTTEEDD PPRROOOOFF –– FFIINNAALL,, 0055//0055//1166,, SSPPii
Contents
List of Figures, Maps, and Tables xi
1. Introduction: Markets in Economics and History 1
1.1. Markets, Their historiography, and some Major assumptions 1
some assumptions and Received Wisdom 3
1.2. On the Modernity of Markets: The verdict of Recent historical
Research 8
Recent studies on the Rise of Factor Markets 11
Recent historical literature on the Relation between Markets,
Wealth, and Freedom 14
1.3. a new approach to Markets: This book 18
elements Investigated in the book 24
1.4. Cases of Market economies 29
possible Cases of Market economies 30
The Cases Investigated in this book 35
2. Markets in an Early Medieval Empire: Iraq, 500–1100 41
2.1. The Rough Contours of economic development 41
2.2. social Revolts and the Growth of Factor Markets from the Fifth
to the Mid-eighth Century 46
social Revolts and societal balance 47
land and lease Markets 51
labourers and labour Markets 56
Credit and Financial Markets 59
2.3. dynamic Factor Markets and Growing social Inequality from the
late eighth to the Tenth Century 60
accumulation and effects in land and lease Markets 61
Free labourers and Growing number of slaves 68
2.4. long-Run effects on economy, politics, and society from the ninth
to the eleventh Century 78
The Chronology of economic decline 78
Causes of the economic decline 82
3. Markets in Medieval City-States: The Centre and North
of Italy, 1000–1500 97
3.1. The emergence of Factor Markets in the eleventh to Thirteenth
Century 97
a Context of Relative equity 98
The early Rise of land and lease Markets 101
The early Rise of labour and Financial Markets 107
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viii Contents
3.2. Organization, Context, and effects of dynamic Factor Markets, early
Fourteenth to Mid-Fifteenth Century 111
The Mezzadria system 114
Increasingly distorted labour Markets and Coercion of labour 119
3.3. The Changing social Context of Markets: power and property in the
Fifteenth and sixteenth Centuries 124
The Growth of burgher landownership 124
Growing Financial Markets and Inequality of Wealth distribution 126
Impotent Revolts, professional soldiers, and Growing power of Market elites 129
3.4. effects on economy, agriculture, and demography 134
The Regional variations 138
Wealth and elite dominance 140
4. Markets in Late Medieval and Early Modern Principalities:
The Low Countries, 1100–1800 145
4.1. The social Context before and during the emergence of Factor
Markets, from the Twelfth to the Fourteenth Century 145
4.2. The emergence of Factor Markets in the Thirteenth to Fifteenth Century 154
land and lease Markets 154
labour Markets 159
Money, Credit, and Capital Markets 164
4.3. The Functioning and effects of dynamic Factor Markets from
the Fifteenth to the Mid-sixteenth Century 170
accumulation through land and lease Markets 171
The Further Growth of labour and Capital Markets 174
The social effects of extensive and dynamic Factor Markets 177
4.4. effects of dynamic Factor Markets from the Mid-sixteenth to the
seventeenth Century 188
Growing economic Inequality 192
Growing political Inequality 195
stagnation of the economy and decline of Welfare 200
5. Epilogue—Markets in Modern States: England, the United States,
and Western Europe, 1500–2000 208
5.1. england and Its north american Colonies, 1500–1800 209
The Rise of Factor Markets to dominance 209
The social and political Context 211
dominant Factor Markets 215
The american Colonies 218
england as the leading economy 222
5.2. The decline of england and the Rise of the United states, 1800–1950 223
Inequality, Counter-Reaction, and stagnation in england 225
Freedom, equity, and Rising Factor Markets in the United states 229
5.3. The Western World brought in sync and dominated by
Factor Markets, since 1950 237
northwest europe brought in sync with the american Cycle 245
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Contents ix
6. Conclusion: The Fundamental Incompatibility of Market
Economies with Long-Run Prosperity, Equity, and Broad
Participation in Decision Making 251
6.1. The Cycle 251
The positive phases of the Cycle 251
a Closer Inspection of the negative phases of the Cycle 255
6.2. The Cycle, Its specific aspects, and Theories of long-Run
development 259
Market economies and Inequality 260
possible Counterbalances and the Role of the state 265
Financial Markets and Capitalism 271
Rise and decline 274
6.3. The Cycle in Time and space 276
early Market economies and Their decline 276
Urban Centres and Rural hinterlands 279
Regional differences 281
The Growing scale and Influence of Market Cores 284
Bibliography 289
Index Locorum 319
Index of Names 323
General Index 324
