A Brief History Of Human Society

1.4m BC To 2015

III. Collective Institutions Preceded The Nation State

Durkheim traces the course of 'corporations', meaning professional associations, which under the Romans imposed considerable moral structures on their members, until the State sapped their life under the later Republic; they rose again in mediaeval times as the Guilds, which provided moral frameworks for their members for more than 500 years until in the 18th century they gave way in the face of the Industrial Revolution and the encroaching nation state.

The city-states of Europe provided a settled environment in which trade could flourish, and they were certainly not the expression of feudal power; on the contrary, they were created on the basis of the guilds, associations of traders of various types, and commercial law was developed by the guilds in the form of codes of conduct. This was even more true internationally (so far as that term had a meaning before nation states existed). The Hansa is the supreme expression in Europe of the pre-eminence of private commercial law; it is nowadays hardly remembered, but in its day the Hanseatic League, uniting the traders of modern Germany and the Baltic States was the strongest and longest-lived institution in Northern Europe. For hundreds of years it provided a legal and social framework within which commercial activity could take place.

Matt Ridley10 points out that the groupish virtue of reputation lay at the heart of successful international trade in the 12th century in Europe: 'Merchants travelling abroad had substantial protection in disputes with local merchants under the merchants law. The only and final sanction against a transgressor was ostracism, but . . . ostracism can be a powerful force.' The Hansa and the European city-states were straightforward expressions of groupish behaviour among traders and craftsmen, confronting the State (still quite weak) rather than within it.

Kropotkin11 emphasizes that while the mediaeval city-state had the trappings and the sovereign powers of a State, its essential 'folkish' and democratic workings were not affected by its political form. 'The secret of this seeming anomaly lies in the fact that a mediaeval city was not a centralized state. During the first centuries of its existence, the city could hardly be named a State as regards its interior organization.' Kropotkin gives examples of the (fragmented, and often craft-based) administrative apparatus of German, Italian and Russian city-states in mediaeval times, which effectively protected the citizens against the growth of any centralized power.

The pattern of 'the flag follows trade' applied also in early Aztec civilizations. In the Aztec Empire (AD 1200 - 1500), the state had perhaps more power than was the case in Europe, but international or long-distance trade was still organized around a structure of merchant guilds which seems to have been remarkably similar to the European model, operating with a quasi-independent legal structure, and making much use of privately sponsored marketplaces.

Frances F Berdan12 describes guild-like Aztec artisanal and trading structures, which tended to cluster in their own city districts, and remained within particular families. There were strong systems of quality control as well as social differentiation within each 'guild'.

Aztec merchants who conducted long distance foreign trade were similarly organized into guilds, residing in separate districts, controlling membership, operating an apprenticeship system and collectively worshipping a patron deity. Merchants who travelled long distances were safeguarded in foreign markets by the organisers of those markets. This structure is extremely similar to that of the European Hansa.

Says Berdan: 'These professional merchants acted both as state agents and as private entrepreneurs. They travelled . . . to trading enclaves in areas beyond direct Aztec control. On these expeditions they carried expensive goods belonging to the Mexican ruler.'

Berdan supposes that Hansa-like organisations may have existed from as early as the 3rd millennium BC in the Near East and were designed to protect merchants and their interests in both domestic and foreign commercial arenas. Trading centres with a large degree of economic and even political independence are well-documented from quite early on, and may have existed as long ago as 3,500 BC.


10 Ridley, M (1996) The Origins of Virtue, Viking, New York, referencing B Benson, The spontaneous evolution of commercial law, Southern Economic Journal, 55, pp644-61

11 Kropotkin, P (1902) Mutual Aid, Heinemann, London

12 Berdan, F F (1989) Trade and Markets in Precapitalist States, in Economic Anthropology, ed Stuart Plattner, Stanford University Press, California