‘Wherever they consider it more profitable, for cash, baratto or credit’. Florentine merchants and the export of silk cloth (15th-16th centuries)

From Firenze University Press Book: Alternative currencies. Commodities and services as exchange currencies in the monetarized economies of the 13th to 18th centuries

Francesco Guidi Bruscoli, University of Florence

Florentine merchants frequently take their cloth and fine fabrics down to the Kingdom of Sicily to sell for cash, and it often happens that they cannot find ready payment for their goods, particularly those that can only be sold on over a long period; these merchants, finding themselves in Sicily with their goods, and desiring to dispose of them but not managing to do so for cash, in order not to lose time or render the journey fruitless, have to decide on some local product that they can take in exchange which will have a better chance of being sold advantageously in their native city than their own cloths and fabrics, were they to take them back. By choosing thus to barter, they manage to exchange the said merchandise for wheat, either through a broker or otherwise, which the Florentine will be able to dispose of at home more easily than the cloth and fabrics, other things being equal. (Benedetto Cotrugli, The Book of the Art of Trade, Book 1, Ch. 5)

In his Libro de l’arte de la mercatura (The Book of the Art of trade) of 1458, Benedetto Cotrugli devotes the fifth chapter of the first book to De lo vender a baracto, or Exchange selling (Cotrugli 1990, 147–49; 2016, 42–44). Significantly, this topic precedes Chapter 6, On selling for cash. By devoting to the two forms of exchange equal space, Cotrugli shows that even in a monetised economy such as the one he discusses, the sale of goods without the use of cash was an important aspect of the life of the ‘ideal’ merchant. He even pushes it beyond that, and describes baratto «the first and principal part of trading» («la prima et principal parte de la mercatura») (Cotrugli 1990, 147; 2016, 42). Before continuing the discussion on baratto, few words about the nature of money are needed. Dictionary definitions of ‘money’ may have different nuances, and various functions have been attributed to ‘money’ by economic theorists. Two in particular are more or less universally accepted, although scholars are divided on which should prevail in representing its essential quality: ‘medium of exchange’ or ‘standard of value’. The former quality could be also described, in a less restrictive manner, as ‘means of payment’ (‘medium of exchange’ implies something that is generally accepted within a community, whereas ‘means of payment’ can refer to a single, isolated instance). According to this definition, potentially any commodity is as good money as coins (or paper money). Moreover, when commodities are exchanged one for another, the value of both can be referred to some ‘standard of value’. Obviously it is possible that occasional exchanges are performed when the mutual interest of two counterparts is satisfied by the acquisition of a specific item irrespective of its value (by comparison to the value of the commodity given away in exchange): this type of transaction is called barter. However, when the items in the cashless transaction are assessed for their monetary value, the situation is somewhat different and implies an operation that we can define ‘market exchange’ because here money served as medium of exchange (see more below, Par. 1) (see also Lane and Mueller 1985, 3–6; Cipolla 1956, 3–12). This paper has different purposes. In Par. 1 terminological issues will be discussed, in order to clarify the nuances implied by the use of certain words, and their supposed connection with different stages in the evolution of the economy. Secondly (Par. 2), I will describe how frequently this type of commercial transaction was adopted in late-medieval long-distance trade, contributing with more examples to an already rich literature concerning especially Italian (Florentine) merchants (Ashtor 1983; Dini 1995; Tognetti 2002). This will lead to a discussion of the strategies behind the choice of adopting baratto instead of cash payments, and (Par. 3) to an assessment of the profitability of such operations. This evidence demonstrates that cashless exchanges were not necessarily a sign of a ‘less advanced’ economy; on the contrary, when performed at an international level, these exchanges implied a network of information, a knowledge of the demand and a capability to connect marketplaces, that only few possessed. As a case study, I will focus on Italian (mainly Florentine) merchants, who were among those who possessed these features; moreover, the quantity of written sources (correspondence and account-books) that are still extant contributes to make them an ideal case study.

DOI: 10.36253/979–12–215–0347–0.14

Read Full Text: https://books.fupress.it/chapter/wherever-they-consider-it-more-profitable-for-cash-ibarattoi-or-credit-florentine-merchants-and-the-/14740