The Rise of Commerce and the Road to Prosperity: The Results of Private Enterprise in the Late Middle Ages and Renaissance Italy

Abstract

It is easy to characterize the Middle Ages as a volatile and primitive period. But this period saw the establishment of some of the early roots of modern-day capitalism in the development of private institutions to facilitate self-enforcing commitments. This chapter aims to delineate the pivotal developments during the Middle Ages and the Renaissance that directly facilitated the emergence and expansion of modern capitalism. We examine the formation of Hanseatic League trading networks and the role that the emergence of safe-conducts played in fostering long-distance trade in Medieval Spain. We also examine the expansion of trade and the emergence of sophisticated contracts for artistic creativity in Renaissance Italy.

Keywords: Capitalism, Hanseatic League, Medieval Spain, Renaissance Italy

JEL Classification: N33, P16, P5