The Promise and Peril of Credit: What a Forgotten Legend about Jews and Finance Tells Us about the Making of European Commercial Society, by Francesca Trivellato

Abstract

The medieval bill of exchange and marine insurance are widely regarded by historians as financial instruments central to the long-distance trade that fuelled the commercial revolution of pre-modern Europe. Marine insurance was rooted in partnership contracts (commenda, societas maris), which, by splitting risk, mitigated loss due to storms, pirates and war. The bill of exchange, by which a merchant promised to repay a loan in another currency and place, combined the promissory note with currency exchange. Some early modern authors attributed the invention of these financial instruments to medieval Jews who, these authors supposed, used them to secrete wealth out of lands from which Jews had been expelled. Intrigued by the legend of Jewish origins, Francesca Trivellato (an Italian historian known for her work on Jews and cross-cultural trade in the early modern period) sets out to find when, where and why this ‘legend’ emerged. The book is the intellectual history of this legend. Trivellato traces the legend of Jewish origins back to the seventeenth-century genre of mercantile law books, in particular to Étienne Cleriac’s widely used Us et coustumes de la mer (1647), Jacques Savary’s ‘commercial manifesto’ Le parfait négociant (1675), and Savary’s sons’ bestselling Dictionnaire universel de commerce (1723–30). In the mid-eighteenth century, Montesquieu incorporated it into his De l’esprit des lois. With Montesquieu, the legend leapt from the backwaters of mercantile law to the mainstream of political theory. And as the reach of the legend expanded, the image of its Jewish inventors underwent significant change. Cleriac’s version of the legend was rooted in rank medieval stereotypes of Jewish usurers, while the Savarys stripped away these negative connotations. But in Montesquieu’s hands, the Jews became economic liberators—the obverse of usurers. The Jewish bill of exchange was not a species of nefarious usury, but a means of liberation from the economic stagnation of medieval Catholic doctrine. With this invention, ‘Jews introduced new dynamism into Europe’s economy and became harbringers of modernity’ (p. 134). However, Montesquieu’s positive vision of Jews as a modernising commercial force was reversed with the French Revolution.