The medieval Hansa as a monopoly

Mika Kallioinen,
University Lecturer,
University of Turku,
Finland

In the last couple of years, national issues have increasingly taken precedence over the benefits of free trade and globalization. However, free trade is a relatively recent creation. In the early Middle Ages, a very different form of trade policy dominated. Traditionally, regulation and monopolistic tendencies have been seen as an integral part of the medieval economy. In Northern Europe, the Hanseatic League was the supreme power that successfully introduced a protective and even monopolistic trade policy. From the thirteenth century onwards, the Hansa was able to control the commercial axis connecting the East and the West, from Novgorod to Bruges and London by employing highly protective trade practices.

Overseas trade was hardly free in the Baltic Sea region in the Middle Ages, even though customs (Pfundzoll) were levied only in times of war when ships and cargoes left or entered Hanseatic ports. In the whole of Northern Europe, as a rule, the right to participate in the trade of the local markets and in the staple branches of foreign trade was being defined and circumscribed. Monopoly was indeed the prime object and the prerequisite condition of urban regulations and became the guiding object of town policy. Commercial transactions were subject to diverse town laws and regulations that constituted a compromise between the domestic merchants’ dependence on external trade, on the one hand, and their profit seeking interest, on the other hand. This group interest of the merchants often led to a systematic discrimination of foreign traders. In fact, the domestic merchants’ desire to take advantage of their ability to impose various privileges related to commerce seems to have been a prime motive for their interest in regulating trade.

In the case of the Hansa, facing the increasing competition of the rivals such as Hollanders and South Germans, regulation became the most important way to fight back. Although never systematized, regulations became increasingly strict in the fifteenth century, dealing especially with three points: the exclusion of all non-Hanseatics from sharing the Hanseatic privileges, the limitation of the activity of non-Hanseatics in Germany by various measures that together were labeled as the “guest law” (Gästerecht), and the strengthening of the Hanseatic Kontor in Bruges in order to hinder the Dutch trade. Several measures to defend Hanseatic interests were intended to clarify the distinction between the Hanseatics and the non-Hanseatics. In 1434, for example, the enjoyment of the privileges was restricted to citizens by birth only. These prohibitions show clearly that the aim of the legal measures was to prevent foreigners and foreign capital from reaping the benefit of the Hanseatic privileges, fundamentally that of the monopoly of trade between the Russian markets and Western Europe.

Different attempts were made to create a more homogeneous commercial setting for Hanseatic merchants. It was a rational strategy to standardize and harmonize urban laws as well as weights and measures in order to reduce the degree of heterogeneity and complexities of trade inside the Hansa. First, a big step in the standardization of various urban laws was taken as the laws of Magdeburg and Lübeck became the dominant urban laws in the Baltic. The Lübeck law, for instance, was adopted as far away as Tallinn. Although originating from many different towns, most Hanseatic merchants acted, therefore, on the grounds of a commonly known and practiced law. The Hansa also standardized weights and measures for many of the commodities its merchants were dealing with. However, it would be a false interpretation to see Hansa as a solid organization. The communal ethos that bound individual merchants together within a town community implied that between communities, the forces were more separating than uniting. Among the Hanseatic towns, the interests of the eastern towns were largely opposed to those of Lübeck and the so-called Wendish towns, and even between the eastern towns from Danzig to Tallinn there were occasional conflicts.

It is questionable as to whether the organization of the Hansa based on town communities fostered competition as well as private initiative and innovation. In Hanseatic trade, there prevailed a conservative spirit that aimed at preserving the existing privileges rather than finding new opportunities for profitable transactions. The communal, egalitarian ethos was not ideal for encouraging merchants to increase their individual efforts. Therefore, it is possible that in the long run it was critical for economic development that the communal organization gradually lost ground once centralized states had started to evolve. The breakdown of the communal system and the increasing competition between states opened new paths for private initiatives that were impossible within stagnant town communities of the Hansa.

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