Investment and practices of refinance in times of crises: the analysis of the accounting of companies and capitalist rentiers in Florence and Augsburg during the 16th century

• Applicant: Privatdozent Dr. Heinrich Lang
• Subject Area: Economic and Social History
• Term: since 2018
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 411846816

This project is about diversifying practices of investment and refinancing which rose from familial assets in the Renaissance economy. The emblematic figure of the Capitalist Rentier is represented by the son of a papal banker, Alamanno Salviati (1510-1571), who was the only non ecclesiastic male heir of the family. He was due to manage the familial wealth in business partnerships, real estate, and money. He also inherited the possessions from his father-in-law Giovanni Serristori. The term of the Capitalist Rentier is a paradox, because it refers to the heirs of wealth deriving from commerce and banking, who invested their pecuniary riches in business partnerships on the one hand, in various bonds, and agricultural lands on the other, in order to maintain or to increase their fortunes. Alamanno Salviati invested in the trade in bills of exchange and business partnerships with his bankers. During the period from 1555 to 1558 his distant cousin Filippo Salviati, who run a company in Venice, was one of the latter. The perspective on these processes is the corporate and personal accounting which is seen as complex processing data. The account books and outgoing letters of Alamanno Salviati and Filippo Salviati & co in Venice are entirely preserved in the Salviati Archives in Pisa and Rome, and they have not been studied, yet. Hence, I am proposing an innovative and complex analyses of the practices of investment and refinancing and a new interpretation of the specific character of the culture of capitalism in the Renaissance. For comparison of the structure of accounting the fragments of account books from Augsburg will be considered, because – this is the hypothesis – the practices of investment and refinancing were rather similar in the north and the south of the Alpes. The praxeological approach to accounting brakes the path to the analyses of the entire material in a synoptic way and refers, thus, to economic practices and attitude. It combines quantitative and qualitative methods. The asset formation was due to the dynamics of secondary markets which offered significant profit. Secondary Markets were mainly markets which derived from government finance through the trade in bills of exchange. The separation of commerce and banking in bills of exchange made secondary markets expand during the first half of the sixteenth century and was dependent on the acceptance of book money. The key to the understanding of the culture of capitalism in the Renaissance is the analyses of how to cope with the crises of government finance in the middle of the century and its impact on investment and refinancing.

• DFG Programme: Research Grants