Powers and Thrones: A New History of the Middle Ages

by Dan Jones

able to do business in many others. It was a great leap forward. There were many more devices that facilitated the financial strides of the thirteenth and fourteenth centuries—and that directly affected commercial networks such as the Florentine-English wool trade. It was an unfortunate fact of shipping that ships sometimes sank, usually with the loss of their valuable cargo as well as their crews. So from the 1340s at the latest, merchants in Genoa began to draw up insurance contracts, which would pay out if stocks were lost in transit. At roughly the same time, merchants began to formalize ways in which they could work together to invest capital jointly in commercial ventures, thereby sharing both the risks and the profits between themselves. This was a vital part in the development of the “company” itself: the practice of multiple partners and investors sharing in the fortunes of a single abstract commercial entity, with new investors being sought out when the company wished to expand, and records kept of how the company was performing, what its assets and liabilities were, and how its success (or failure) could be projected into the future. The notion of keeping business accounts was not original to the Middle Ages: it dated back at least to the Roman republic. But double-entry bookkeeping—in which assets and liabilities were systematically listed in opposing columns and balanced out to describe numerically the state of the company—became a western business norm only i...