What were the social and institutional factors that led to, and reinforced, the

precocious emergence of Florentine commercial capitalism,3 especially in the domain of

international merchant-banking? The dominant stream of answers, emphasized by

economic historians and by economists, focuses on the invention in late-medieval and

Renaissance Italy of a variety of innovative business techniques – bills of exchange,

double-entry bookkeeping, partnership contracts, commercial courts. If these impressive

organizational inventions are interpreted as facets of a broader rise of impersonal market

rationality, then a tension emerges in Florentine, and indeed in European, historiography

between economic historians and the work of social and political historians, who

emphasize the deeply personalistic – mainly familial and clientelist – character of social

relationships of the period. But were early-capitalist business techniques really the

leading edge of a breakthrough of the market from its traditional social shackles, as the

master narrative of modernization would have it? Or instead were economic relations in

the market embedded in, and hence reflective of, trends in the surrounding social and political networks of the time, as anthropologically and sociologically oriented economic

historians like Karl Polanyi4 have argued? Renaissance Florentine businessmen were not

only businessmen, after all, they were also fathers, neighbors, politicians, friends and

enemies, and patrons of the arts. But what implications, if any, did this overlap in roles

have for the organization and operation of economic markets?

In this article, we address these historical questions through both statistical and

textual analyses of Florentine commercial credit in the early Quattrocento. Our

conclusion will be that commercial credits among Florentine companies were indeed

highly correlated with a wide range of non-economic, social relationships among the

partners of these companies. Correlations between economic and social relations were

highest in the merchant-banking pinnacle of the Florentine economy – precisely in the

industries where reliance upon advanced capitalist business techniques was greatest. New capitalist business techniques thus did not displace the oligarchic social networks of the time, but rather built upon and formalized these relationships into markets. In particular,

family and neighborhood provided strong ‘traditionalist’ foundations to Renaissance

Florentine credit markets. But then republicanism, especially in the institutional form of its elected city council, provided the political scaffolding for personalistic social networks (and thus the economic credit networks built upon them) topologically to ‘open out’ toward expansive liquidity and growth, instead of to close inward into cliques and corruption. Three mechanisms for this institutional impact of republicanism on the

emergence of credit markets are discussed: public certification of reputation (onore)

through co-optative elections, and both performative and network incorporations of

carefully filtered newcomers into relatively open elites5 of merchant-politicians.