Reputations and Coalitions in Medieval Trade: Evidence on the Maghribi Traders

Today we got the chance to visit the beautiful Amalfi Coast. We started off the day by visiting the Paestum ruins, famous for their well-preserved Greek temples. After a brief lunch we journeyed to an old paper mill (now a museum), made our own paper, and of course, purchased from their gift shop. The Amalfi region is famous for their paper making, which they learned from the Arabs. They gained this knowledge through trade. The article Connor and I presented looks at trade, specifically why a specific group called the Maghribi traders, were so successful in trade in the 11^th century through the use of a coalition.

Alessio making paper

Our article discusses this economic institution of coalitions. Medieval merchant-agent relationships were characterized by a lack of contract structure that the courts were unable to attend to, leaving the respective parties unsatisfied. Agents are those hired to actually travel and execute the trade for merchant.The Maghribi traders were Jewish traders who lived in Baghdad who had a distinct identity within the Jewish community. These traders emigrated from that area and proceeded to only trade with other Maghribi traders. The coalition’s power stems from their effective use of information transmission. Because they would only trade amongst themselves, they would have all the information regarding the honesty of the agents involved. Nonmembers of the coalition (non-Malgribi traders) would not hire members as agents because they did not have access to the information about who they were hiring.

The coalition worked not because the traders necessarily trusted each other, but because their reputations were on the line. If the agent was found to have cheated a merchant (by running off with the capital for example), the merchant would make it known to all other Malgribi traders that the agent was dishonest, and that agent would never be hired by someone in the coalition again.

Paestrum, the ancient city we visited early in the day, was situated on the Sele River and may very well be a river city that a Malgribi trader immigrated to and set up shop, although it seems the city was more of a defensive outpost. Standing on one end of the city, three grand Grecian temples rose clearly in the distance, surrounded by the foundations of what used to be homes. It was interesting that the organized pile of rocks we were looking at was of such great importance in the past. Although that aspect was a little sad to be honest, I had a great time being able to walk through history.

Temple of Athena, Paestrum