Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders. Econ 215 Takes on Genoa 

In medieval time you can only imagine the obstacles a trading firm faced. Technology and communication that was dependent on wind direction and current speed. Genoa being the port that it is, provided an advantageous location for the international trade of commodities to countries only accessible by ship. But with hand written recites and someone’s word, the inability to monitor the validity of such sale records put a lot of trust in a merchant’s business associates and agents. How can a merchant sleep well at night without the fear of being ripped off, or that his inferiors are not skimming a little off the top upon the return from trading? Well lucky for you, Crystal and I read and analyzed the article ‘Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders’, which answer the question we are all dying to know.

Given its medieval Italy, religion played a predominate role in most sectors of life including in the work place. The fear of God is one reason worth mentioning for how a merchant could trust he is receiving all that he is entitled to.

But when that’s not enough to allow the merchant catch all the zzzzs he needs, coalitions were established. This worked as a club of merchants to create contracts with business associates and agents that sell and trade their goods abroad. As in many scenarios of success the key was communication. All merchants kept up with each other even internationally keeping tabs on their subordinates. This is where the importance of reputation came in. Due to the common interest of merchants to hire only the most honorable employees the coalition worked to keep out the thieves.

With the agreement between all merchant members of the in coalition and integrated trade routes. The one time payout a business associate or agent can receive from cheating is less than the forgone income in the future. This creates an huge incentive for future sustainability in the future for income.

It was our first day in Italy and we hit the ground running. After dropping off our bags we were off to our first sights to see and tour to be guided. Although we didn’t go down to the actual port of Genoa we did stay in the city that hundreds of years ago hosted such merchants yearning for an honest business and a good night sleep just as much.

(pictured below is one of the many streets in Genoa that leads down to the port of trading in the city)