Sixteenth-century Antwerp traders: rational investments and irrational exuberance.

The assumed dichotomy between supposedly rational finance and casino capitalism has become ever more blurred. This is anything but a new development. The history of commerce and banking in the Middle Ages and the early modern era supports the notion that pre-industrial entrepreneurs were not simply rational, modern economic agents who efficiently ran their enterprises in an uncertain preindustrial economic climate. Modern economic thinking cannot be employed seamlessly in a pre-modern context. It underestimates the haziness between rational economics and irrational gambling.

Enter Daniel de Bruyne who lived and worked as a merchant in Antwerp in the 1560s. His account book exposes the problems with applying patterns of rational economic thinking on late medieval and early modern entrepreneurs. De Bruyne registered all his investments in real estate and long-distance partnerships, his bonds and bill of exchange transactions in his account books. But he also wrote down the moneys won and lost while playing cards or betting on the birth date and sex of unborn children or on the duration of a voyage to the Indies (he even consulted a fortune-teller to know whether one of his bets would prove to be right). Moreover, de Bruyne often bought lottery cards and traded them with other merchants, not really a rational financial instrument. Hence, this is hardly the behavior one would expect from a rational merchant. By juxtaposing financial assets, which we today would include in a rationally set-up investment portfolio, with gambling, de Bruyne shows that he did not distinguish between them.

Based on the account books and personal notes of Antwerp trader Daniel de Bruyne, my paper and presentation will lay bare the investment patters and risk-behavior of De Bruyne and others of his kind. I will argue that the scale and opportunities of the market prompted them to diversify their portfolios and to include what seems to be irrational investment. Gambling behavior was definitely not limited to high-flying merchants. But in studying their cases, we gain a better understanding of the close ties between the development of capitalism, speculation and outright gambling.

Jeroen PUTTEVILS
is currently a lecturer and research member of the Centre for Urban History at Antwerp University. He specializes in the economic history of the Lower Countries of the 16th century, and particularly in the activities of international merchants.