False Economy - Alan Beattie [101]
At first the hanses provided armed protection, which fulfilled the most basic need of trade—getting the goods to the buyer securely, without them being stolen on the way. As they developed, the merchant guilds expanded their role to become self-regulating clubs that negotiated with local rulers on their members' behalf, forging agreements on standard tolls and other fees to hammer out reliable trade routes. They also managed to wangle trade privileges on behalf of members, which proved a good incentive for other traders to join.
Urban air is especially conducive to commerce and somewhat more protective of the rights of the individual. By the (admittedly pretty dismal) feudal standards of the day, with many Europeans tethered to the station in life into which they had been born, many of the hanses were egalitarian. They governed themselves and had fairly open policies on running for office. Since the point of trade was to get stuff abroad, a group of the hanses formed an international association called the Han-seatic League, which established control over trade in the Baltic Sea.
Liibeck, the German port on the Baltic, was the League's leading light, with the great ports of London, Cologne, Bruges, and Novgorod (in what is now Russia) also quite active. In fact, at its height the League acted rather like a state. Having established control over the narrow Danish straits and the overland route to the Baltic across the Jutland peninsula, it fought wars to prevent the Dutch and English from threatening its privileged position. It also established colonies, or Kontore, in its leading cities, in which the capitalist breezes were markedly bracing; some of these Kontore were walled compounds with their own warehouses and living quarters for the merchants.
In Paris, a hanse known as les marchands d'eau essentially controlled all trade carried out on the city's waterways. This started as a limited exclusive right to trade in the fish and wine brought in on the Seine (both of which, then as now, Paris consumed in hefty quantities), and to tax foreign merchants who had the temerity to carry in such trade themselves. Increasingly, though, these "water merchants" started regulating weights and measures, and setting rules for the city's markets. Eventually the hanse expanded into something resembling an alternative government within Paris.
As states themselves got better at regulating trade and suppressing pirates, the need for the hanses diminished. The Hanseatic League in particular eventually succumbed to the envy of merchants excluded from it and the jealousy of governments, such as the Dutch, that wanted to collect tolls and monopolize trade themselves. This tension evident in the role of the League is one that we will see recur down the centuries. Like any other public service, the operation of a trading system was frequently a monopoly. Those with monopoly power often tend to abuse it, and the creation of a trading system or a trade route all too often was followed by an attempt to milk it for profits by keeping out competitors.
It was precisely this pattern that also saw the rise and then fall of the chartered trading company. We have already met the most famous—the East India Companies of the Netherlands and England, founded at the beginning of the seventeenth century. The former dominated the spice trade from East Asia for more than a century, while the latter ended up going well beyond simply being a later and longer-distance equivalent of the hanses to become a privately held prototype of modern empire.
When it was set up in the seventeenth century, the (English) East India Company was not just the only business that traded between Asia and Britain but the only business that was allowed to. The Company wanted a monopoly to ensure it had sufficient certainty of profit so as to make the effort and risk involved in trading goods across thousands of miles worthwhile. Trading with