Hermes, the Leviathan, and the grand narrative of New Institutional Economics:the quest for efficient institutions in Brandenburg-Prussia and Naples (17th-18th centuries)
Referat im Panel A symbiotic relationship? State power and early modern capitalism
In the last decades, the scholarly tradition known as New Institutional Economics (NIE) has emerged as one of the most influential grand narratives of economic history, providing productive impulses for a multitude of historical studies on the relation between the state and entrepreneurs during the early modern age. Challenging the Braudelian view according to which ‘capitalism only triumphs when it becomes identified with the state, when it is the state’, NIE tends to explain the ‘rise of the West’ and global inequalities through dichotomous models opposing ‘virtuous’ institutional paths, which grant property rights and the enforcement of contracts and in which bourgeois entrepreneurs exert a strong political influence, to ‘vicious’ ones, of which absolutist monarchies from the Mediterranean or East-Central Europe are considered to be paradigmatic examples.
We aim to dispute this (rather Anglo-centric) vision from the margins, i.e. by adopting a de-centred perspective focussing on the relation between long-distance trade (Hermes) and the monarchy (the Leviathan) in two economically subaltern countries: Brandenburg-Prussia and the Kingdom of Naples. To this purpose, we will analyse some of those institutional innovations promoted by the Hohenzollern and Bourbon governments in order to catalyse domestic economic development: the creation of the Brandenburg African Company, a joint-stock company trading mainly in slaves, as well as the attempts to reform the customs and judicial system of the Kingdom of Naples. Aiming at emulating ‘virtuous’ models from North-Western Europe – that is from the thriving core-countries of early modern European capitalism –, these mercantilist policies produced results quite different from those that had been expected, proving largely unable to attain their initial goals.
The relations between absolutist monarchies and early modern capitalism, such as they are exemplified by the Brandenburg and Neapolitan case studies, can neither be described in terms of a symbiosis nor as antagonistic opposition between suffocating state bureaucracies and freedom-seeking entrepreneurs. In a context in which the interests of institutional powers and social actors were deeply entangled and at the same time often diverging, consolidated patterns of negotiation characterized the daily interactions between them. Thus, rather than comparing different national models and trying to figure out ‘one best way’ of institutional development, we need to examine how institutional mechanisms were appropriated by commercial entrepreneurs in the inherently transnational space of long-distance trade and how economic and political power asymmetries between different states affected processes of social and institutional change within these states.