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This article comments on a study by Patrick O'Brien related to the economic development in Europe. O'Brien states in his paper that commerce between core and periphery for three centuries after 1450 proceeded on a small scale, was not a uniquely profitable field of enterprise and while it generated some externalities, they could in no way be classified as decisive for the economic growth of Western Europe. According to the author, the concept of supernormal profits implies the concept of a normal rate of profit. However, the normal rate of profit in capitalism is the maximum one can get away with. There may enter into the picture a political pressure which defines for given times and places a conventional profit rate, although such pressures have seldom been efficacious for very long. But the whole point of capitalism is the endless accumulation of capital. Though, at any given time profits may be higher from one investment than from another, always within the continuing underlying pressure towards the equalization of profit rates through the market.

The article focuses on business practices and commerce during medieval period in Europe. From the seventh century A.D. onwards, the Arabs not only extended their military conquests but also succeeded in developing long-distance trade and international commerce on a scale which surpassed anything known before. A host of new institutions and instruments of commerce therefore confronted the merchants of Venice, Gaeta, Amalfi, and Bari when, in the eighth century, they once more ventured across the sea in search of trade. Conditions in the Islamic world of that time were extraordinarily favourable to the rapid and unhindered growth of commerce. Among the Muslims, international trade was particularly stimulated by the pilgrimage to the holy places in Arabia, on which a great body of men converged each year from all over the world. The greatest contribution of the Muslim world to medieval economic life was the development of commercial methods based on writing and recording. From the eighth century on, the suftaja as a draft, which was sometimes also a true bill of exchange, came to play an ever more important part in economic life. Business no longer had to be transacted only in cash, nor was there further need for the risky and expensive transportation of large amounts of cash from place to place.

Rhine transport was not an absolute condition for German industrialization. Railways proved to be efficient, and in the 1840-1870 period were essential for the industrialization of the Ruhr area. The key questions addressed in this article are: why did inland navigation not disappear from the Rhine region (as it did elsewhere), even recovering after the 1870s? And why did it have an unassailable competitive advantage from the 1890s onwards? Political developments leading to the liberalization of Rhine shipping and the canalization of the river created the opportunity to increase the scale of shipping. This gave it competitive advantages when it came to bulk transport. This article uses new data on freight rates in the Rhine delta to demonstrate the course of Rhine competitiveness. Furthermore, it identifies the institutional conditions, and the technological and organizational improvements, that were the basis of this growing competitiveness. The conclusion is that the element of German international trade that went by the Rhine correlated with the cost of Rhine shipping when compared to that of railway transport. As a consequence of the recovery of Rhine shipping, the port of Rotterdam became stronger than its Belgian neighbour, Antwerp. [ABSTRACT FROM AUTHOR]

This article explores the impact of the ‘Voyages of Discovery’ on European spice markets, asking whether the exploits of Vasco da Gama and others brought European and Asian spice markets closer together. To this end we compare trends in pepper and fine spice prices before and after 1503, the year when da Gama returned from his financially successful second voyage. Other authors have examined trends in nominal spice prices, but this article uses relative spice prices, that is, accounting for inflation. We find that the Voyages of Discovery had a major impact on European spice markets, and provide a simple model of monopoly and oligopoly to decompose the sources of the Cape route's impact on European markets. Finally, we offer some speculations regarding the impact of the Cape route on intra-European market integration. [ABSTRACT FROM AUTHOR]

This article uses club theory to explain why two major medieval commercial centres declined in the early modern period. Lübeck and Danzig illuminate the difficulties experienced by old-style European towns where early modern guilds (and other privileged ‘corporations’) had a lot of political influence in making the transition to the new style of north-west European cities such as Amsterdam and Hamburg. The article refutes theories proposing that the special privileges awarded to a merchant elite enhanced economic growth; instead, it is argued that those privileges gave rise to ‘club goods’ that were beneficial only to a small number of merchants and were provided at the expense of society at large, resulting in economic decline. [ABSTRACT FROM AUTHOR]