Studnicki (2002) Early modern Portuguese networks

Studnicki-Gizbert Daviken (2002) �Interdependence and the collective pursuit of profits: Portuguese commercial networks in the early modern Atlantic�, Curto Diogo Ramada and Molho Anthony eds., European University Institute Working Paper, 2, Commercial Networks in the Early Modern World, 90-120.

This article is available on line (pdf).

Introduction

The Portuguese merchant network or nation was one of the �most dynamic institutions of transnational and inter-regional trade of the early modern period� (91). A nation was a community of foreign merchants distinguished from the local society and institutionally and/or socially bond together.

An ad hoc organisation

The Portuguese nation was geographically dispersed over the Atlantic world yet socially socially connected during the 16th and earlt 17th century. It hosted an �ecology� of relationships (kinship, commercial association, common religion). It fostered trust which allowed market transactions in the absence of �institutionalized enforcement mechanisms� (92).

This type of organisation proved particularly useful for illegal inter-imperial trade (43% of Spanish American silver import were smuggled out of the monarchical monopoly system) (93). At the beginning of the 17th century, there were about 9,000 merchants in the Portuguese network (only half of them were born in Portugal). They highly mobile and could resettle 5 times over the course of their lives. The network was also extremely fluid with new houses entering regularly and old ones disappearing often (95).

An elusive bond

The Portuguese nation was an heterogeneous networks that did not rely chiefly on a priori bonds such as religion, nationality, kinship or common origin:

• The nation was composed of both Old Christians, conversos and marranos. Many trading houses mixed all three populations as well (96). So religion was not the bonding element of the Portuguese nation.
• English, German, Flemish or Castilian partners were common, there were numerous bridges between the different nations. These relationships were essential to commerce across regions, sectors or cultures (97). The common national identity was no sufficient warranty for merchants active the planet over.
• The merchants were not either coming from the same region in Portugal.
• Each trading house was also made up of several different families (from 2 to 5) (98). One did not have enough parents to send as associate wherever business required. A kinsman was sometimes recruited as apprentices by parents but more importantly marriage regularly thickened the connection between the families composing a trading house. Thus kinship reinforced pre-existing bonds (99).

The Portuguese nation�s bonds were to be constructed, they were not inherited.

Common values

Early modern values of mutualism and interdependence (rather than contemporary individualism) were at the core of the Portuguese merchants� mentalities (100). �Membership made the man� (101). Merchants considered they were �invested� in one another. Self-interest was to keep the group united and wealthy. Individualism was broadly seen as a dangerous and sinful trait.

As a result, one�s good reputation was essential. Numerous and dense linkage between the merchants allowed information to travel and one�s status was constantly updated. A very social life style (large household, frequents celebrations, etc.) made secrecy difficult (102). �The Atlantic-wide constellation of merchant houses was like a neighbourhood abuzz with gossip�. It was essential to keep bonds alive and meaningful and exchange judgement and evaluation.

The gossip network

Talk and active gossip built and undermined reputations. One had to remain reputable and honorable and keep his partners� and parents� good name untarnished (103). This stream of information also expressed the group�s normative values.

Honesty was critical at a time when huge sums were lent with no enforcement mechanisms to guarantee the recovering of debts (104). Frankness was also important as it the social cohesion of the trading houses. So was largesse (105). Humility and deference was essential to sociability (one was always at his associate�s service) (106).

Creating new links

Gift-giving was often use to materialise the merchants� interdependence. A wide variety of gift travelled across the Atlantic. They smoothened merchant to merchant relationships as well as extending one�s network beyond the circles of merchants. Indeed, the Portuguese nation around the Atlantic was also composed of mariners, civil servants, clergymen and artisans. The Portuguese communities connected in chapels and hospitals . Merchants were the benefactors of their communities, for instance providing dowries to orphans girls (108).

In return, merchants were often elected consuls of the communities (109). The exchange of gifts also thickened the relationship between merchants that often evolved into a form of brotherhood which could be institutionalised through compadrazgo (godparentage) and marriage. Kinship was constructed, not a given. This marital strategy created connections so dense that it is often difficult to distinguish one family from another. Merchants spent heavily on their daughters� dowry. A sound investment that extended one�s network (112).

The powerful merchants were regarded as the patrons or the fathers of their communities, a speaking image for a paternalistic society where family was a central institution. A powerful merchants would have under his authority his descendents, his slaves and his clients, like a roman dominus (114).

The commercial network

Unlike joint-stock companies, the Portuguese network had a decentralized system of monitoring. The network was a highly integrated structure in turns every one has each other�s associate, debtor and creditor. As such the individual merchants� caudal (both moral quality and economic capital) was key to the whole organisation. A good example of interdependence is to be found in the fact that young merchants needed their seniors� loans of stock and capital to start off and that the latters needed their juniors to develop their network and each new markets (115).

Long-standing associations were the norm and they sometimes extended over generations. These multi-layered relationships were essential and one was careful not to sever them. With trust came flexibility as merchants could empower their associate to manage their business on the other side of the ocean (116). The fact that between two partners, the account was always imbalanced (one owned something to the other one year, and inversely the following year), this made lasting commercial relationships almost a necessity.

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