Merchants and the Origins of Capitalism

38 Pages Posted: 15 Sep 2017

See all articles by Sophus Reinert

Sophus Reinert

Harvard University - Business School (HBS)

Robert Fredona

Harvard Business School

Date Written: September 12, 2017


N.S.B. Gras, the father of Business History in the United States, argued that the era of mercantile capitalism was defined by the figure of the “sedentary merchant,” who managed his business from home, using correspondence and intermediaries, in contrast to the earlier “traveling merchant,” who accompanied his own goods to trade fairs. Taking this concept as its point of departure, this essay focuses on the predominantly Italian merchants who controlled the long-distance East-West trade of the Mediterranean during the Middle Ages and Renaissance. Until the opening of the Atlantic trade, the Mediterranean was Europe’s most important commercial zone and its trade enriched European civilization and its merchants developed the most important premodern mercantile innovations, from maritime insurance contracts and partnership agreements to the bill of exchange and double-entry bookkeeping. Emerging from literate and numerate cultures, these merchants left behind an abundance of records that allows us to understand how their companies, especially the largest of them, were organized and managed. These techniques can also be put in the context of premodern attitudes toward commerce and the era’s commercial-political relations. The Commercial Revolution anticipated the Industrial Revolution by over half a millennium and laid the groundwork for today’s world of global business.

Suggested Citation

Reinert, Sophus and Fredona, Robert, Merchants and the Origins of Capitalism (September 12, 2017). Harvard Business School BGIE Unit Working Paper No. 18-021, Available at SSRN: or

Sophus Reinert (Contact Author)

Harvard University - Business School (HBS) ( email )

Robert Fredona

Harvard Business School ( email )

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