The Origin and Development of Markets: A Business History Perspective

A substantial documentary evidence survived from the eleventh century onward, when chartered markets and new towns were established across Western Europe. The expansion of the market system is important for business history, but there has been no systematic literature review on market evolution since Henri Pirenne’s Medieval Cities (1925) and Raymond de Roover’s The Rise and Decline of the Medici Bank (1963) — argue Mark Casson and John S. Lee. Their articleThe Origin and Development of Markets: A Business History Perspective(free access) is a comprehensive attempt to fill the gap.
Medieval marketplaceDemonstrating that the market has played a critical role in many of the economic “revolutions”, from the credit revolution of the 14th century down to the Industrial Revolution and beyond, Casson and Lee highlight several main themes in the history of European markets: the slow rate of market development, the impact of institutional arrangements, the prominent role of large-scale consumers, the impact of competition between market centers, and the prominent role of informal markets in trade.
The survey also shows that successful markets were regulated – often by civic authorities, officials, and courts – to maintain a reputation for reasonable prices and quality control. Markets were located at both transport hubs and centers of consumption, even when the latter were quite remote. However, as transport and communication costs declined, shakeouts occurred and only the larger markets survived.

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