Dynamic Networks? Credit and Trust in Late Renaissance Florence (1427-1430)

In recent years, a growing number of scholars challenged the general scepticism about pre-bank credit markets. They proved that financial markets flourished well before the introduction and development of banks. In particular, interpersonal networks had a crucial role in fostering and supporting credit transactions. Previous research shows that the interpersonal peer-to-peer lending market functioned in concentric circles. People in need of funds, either to assure the survival of their household or to invest, turned first to their family and their parentela – which included cognatic ties, mostly from women’s marriages –, then to their friends and neighbours and finally to the local elite and foreign lenders. Economic transactions were strongly embedded in the social fabric of local communities, prompting the preservation and reproduction of these ties. This social proximity in tight-knit networks featured strong social norms, which governed credit exchanges.
In Renaissance Florence, the majority of credit transactions took place through interpersonal networks. Scholars highlighted the strong personalistic character of social relationships and stressed the importance of credit networks as an indispensable vehicle of elite integration, which contributed to easing commercial trade and fostering economic development. This paper dialogues with this literature and adds a new variable to the study of credit networks: time. The analysis of networks usually provides us with a snapshot at a precise moment, which is then studied to describe an entire system, and explain the roles of nodes and the characteristics of the edges that link them. At the core of this paper lies the idea that networks are highly dynamic and change rather quickly over time. Studying the same network in different moments could be critical to better understanding how they formed and sustained themselves, and shed more light on the moral and economic implications of credit.
The main sources of this research are the catasti of 1427 and 1430. The catasto is an incomparable source for retracing the economic conditions of Florentine households at the beginning of the fifteenth century. This tax census listed the wealth, profession, age, and marital status of Florentines, and includes extensive lists of their credit relations. In particular, I compared the tax declarations of 20 households in 1427 with those of the same households in 1430. I included individuals belonging to different social strata, considering both their professions and the gross wealth they declared (1427).
This study aims to fill a gap in the current literature. First, it analyses how credit networks evolve focusing on the different actors that take part in them. This proves to be important in order to understand the framework in which credit relations were inserted. In a context in which a moral economy based on kin, friends and neighbours prevails, we should expect stability. The main idea is that the urban economy was based on repeated interactions, accumulation of debts and credits, and transactions that were usually closed by mutual compensations. Even though credit and debt were short-term, relations between individuals were not. Another issue concerns interest rates: was credit granted for free, or do we find traces of an interest rate in the declarations? And finally, how many borrowers defaulted and how did individuals deal with the negative impact of bad debts in their ledgers?
The paper starts with a general comparison of the catasto of 1427 and 1430. Once confirmed that there are no major differences between the two tax assessments and that they can be compared, the analysis focuses on the structure of the overall network. The results of this preliminary research seem to confirm th