Abstract
AbstractTrade in the early modern Atlantic grew a great deal. While acknowledging that this growth had important economic, social and cultural consequences, scholars have yet to fully explain its causes. This paper argues that formal religious institutions were key. Based on records from colonial Philadelphia, it shows how the Quaker meeting created a legal forum to resolve commercial disputes. The meeting enforced its verdicts by gathering and disseminating information about disputes locally and across the Atlantic world through the Society of Friends’ formal organisation of meetings. Thereby, it re-enforced reputation mechanisms, facilitating the expansion of Philadelphia's trade.
Highlights
In pre-modern societies, long-distance trade constituted a key motor for economic growth
How was this possible? This paper argues that Philadelphia Monthly Meeting played an important role in this development
Research on Atlantic trade expansion has been strongly influenced by the New Institutional Economists
Summary
The key element inhibiting trade expansion is risk. Long-distance trade is marked by a time lag between delivery of goods and payment. It enabled the central government to consolidate control and complete the centralisation of the judicial system This was important, as North and Thomas argue, because it allowed public courts to enforce contracts throughout the state’s territory.[5] Similar developments took place, albeit to a less complete degree, throughout Europe. Legal historians agree that whenever possible, traders resorted to arbitration instead.[11] This was true for American merchants, who were faced with unreliable public courts Their preference for arbitration continued until the mid-eighteenth century, when courts improved and litigation became prevalent.[12] For arbitration to be able to solve disputes and enforce contracts, arbitration awards need to be enforced. As part of the institutional landscape of colonial Pennsylvania, they enforced contracts and thereby facilitated trade expansion
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