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Formation and Sustainability of Financial Networks in Early Modern Europe

In: Credit Networks in The Preindustrial World

Author

Listed:
  • Laurence Fontaine

    (Centre Maurice Halbwachs/PSL (Paris Sciences & Lettres))

Abstract

The essay examines the strategies put in place by social actors not only to create financial networks but above all to ensure their sustainability. After a brief introduction on the dynamics of the political economies that coexisted at the time, this chapter focuses on the merchants because for them, finance is the sinews of war. Describing first the strategies implemented by a fifteenth-century merchant, Francesco di Marco Datini, who succeeded in building an industrial and commercial empire despite the many political and economic uncertainties he faced, this chapter examines the risks Datini had to face and shows the role of reputation and trust to mitigate them. Then, it explores the same questions for the eighteenth century: Have the role of trust and reputation evolved? This analysis seeks to understand why networks based on a common religious or village affiliation are the best adapted to last in such an environment. It concludes with a comparison with the large contemporary merchant and financial networks.

Suggested Citation

  • Laurence Fontaine, 2025. "Formation and Sustainability of Financial Networks in Early Modern Europe," Palgrave Studies in the History of Finance, in: Elise M. Dermineur & Matteo Pompermaier (ed.), Credit Networks in The Preindustrial World, chapter 0, pages 57-79, Palgrave Macmillan.
    • Handle: RePEc:pal:psitcp:978-3-031-67117-3_3
    DOI: 10.1007/978-3-031-67117-3_3
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