International Trade

The last article Mitch and I went over was called International Trade and Institutional Change, which covered the early history of the development of long-distance trade in Venice. The article begins discussing the growth of Venetian naval power and how that helped their conquest of Mediterranean trade routes over Arib nations in the mid 900’s. This is really important because Venice is a rather small island with scarce resources which meant it was crucial for them at this time to dominate seaborne trade.

How long distance trade worked at this time was a merchant would have to get a loan to take a ship overseas, stock up on merchandise, and return to Venice to flip these items for a profit. However, this was a very risky operation which could leave many merchants bankrupt. This is why a revolutionary economic system called the colleganza was put in place, modeling systems still at work today. The colleganza was simply two merchants entering into a legal agreement to work with one another. Basically one would be an investor and one would be a traveler. This would take away a lot of the risk and allow lower level merchants to become the investors themselves. 

INTERMISSION:

We didn’t visit anything that has to do with this but here is a fun little pic! 

Next, my partner Mitch got to talking about economic inequality in Venice during the 13 and 1400’s. There was a big power struggle amongst families at this time and you would often find several families join together which allowed them more collective capital to invest in ships and other supplies. Then these families would intermarry which would keep the power in that family and essentially create a dynasty. Mitch dug in quite a bit further on this aspect of Venetian economics but seeing as it was not my area of expertise, I will leave it at that.