Medieval market institutions : the organisation of commodity markets in Holland, c. 1200 - c. 1450

According to neo-institutional economics, markets are shaped by man-made rules and practices that determine market efficiency. Departing from this hypothesis, the dissertation examines how the organisation of commodity markets contributed to the rapid commercialisation of the county of Holland in the late Middle Ages. It discusses market institutions, their origins and their effects, and draws comparisons between Holland, Flanders and England. The reclamation of Holland’s extensive peatlands in the 11th to 13th centuries had given rise to a society characterised by a balanced relation between state and towns, weak seignorial power, a near absence of urban coercion over the countryside, and a limited role of guilds. This affected the organisation of commodity markets in several ways. In comparison to England, the control over trade exerted by the state and the nobility was weak. To be sure, in England royal and seignorial control had given commercialisation an early start. It allowed, for instance, for the early emergence of a national system of weights and measures; moreover in the 13th and early 14th century English lords established many small markets and fairs on their estates. However, there was a reverse side: the king and the nobility were able to exploit trade through taxation, licensing and fining. In Holland this was more difficult, because control over urban markets was largely in the hands of urban merchants, who had a clear interest in efficient market institutions. In Flanders there was even less danger of squeezing by the ruler, but here the balance tended to tip over to the other side. Urban elites, especially in the cities of Ghent, Bruges and Ypres, monopolised trade and repressed rural commercial activities. In Holland the many small towns did not have the power to dominate the countryside; most attempts to establish urban monopolies were effectively blocked by the count, by competition amongst towns, or by the traditional autonomy of rural communities. Especially between 1350 and 1450 Holland profited from this situation: in these years specialised rural trade venues emerged that made it easier for peasants and fishermen to market their products. The late rise of guilds in Holland moreover implied that urban markets were usually easily accessible to outsiders. At the end of the Middle Ages markets in Holland performed well. An analysis of grain prices suggests that price integration with markets elsewhere in the North Sea region was relatively high; estimates of the level of market orientation show that by 1500 about 90% of labour input was devoted to the production of goods or commodities for the market. However, Holland’s rapid commercialisation cannot be attributed to the institutional framework alone. Non-institutional factors played an important part: changes in demand stimulated an increase of interregional trade all over northwestern Europe, and in Holland the subsiding of the peat soil made grain cultivation, and thus self-sufficiency, impossible. Still, even if the organisation of commodity markets was not the driving force behind late medieval commercialisation, it did allow people to take full advantage of new commercial opportunities and thus facilitated and reinforced the process.