In his last manuscript, Charles Tilly developed the concept of trust networks as organizations mediating in the long-term transformation from urban to state domination in world history. Trust networks can be defined as specific patterns of human relationships in which shared interests, values and norms facilitate communication and collaboration and thus reduce transaction costs. Trust networks are based on commitment, coordination, and recognition which often, but not always, are mutual. Membership of a trust network entails a “relation in which at least one party places a valued enterprise at risk in the hands of the other.… Prudent members of trust networks have generally tried to insulate them from predation or incorporation by cities and states (Tilly 2010).” In this article, I show how trust networks emerged and became established in the cities of Europe between about 1000 and 1600 CE. In my view, community building in the first stage of urban growth rested essentially on personal ties, formalized by oaths of loyalty. These were at the origin of the sense of belonging expressed in the first communes, the groupings that fought for their independence vis-à-vis the established feudal and ecclesiastical powers. As the European cities grew, these networks needed to organize themselves as public institutions, which allegedly changed their character fundamentally. This transition process from personal ties to institution building deserves special attention as this was the time when new unprecedented forms of social organization came into being. They determined the rise of urban ways of life, capitalism, and Western concepts of human rights.

Instead of taking a traditional approach that focuses on concepts such as juridical categories, social class, and market structures, I put forward the idea that trust networks can provide a better understanding of the emergence and further development of these European urban communities. At the same time, I examine where the limits lie of the efficiency of personal trust networks, with regard to the scale of the organizations they were supposed to run, and the internal conflicts of interest that arose within the cities, between cities, and between cities and states. The most general and effective form of a trust network is kinship which typically bound members of aristocracies, and which surely also played a major role in the formation of urban elites. Property rights on ground parcels were at the basis of their domination, and these rights were transferred through inheritance and marriage. Within the Catholic Church, networks based on belief, lifestyle, and education evidently functioned in a relatively wealthy elite on a very wide geographical scale. These were partly urban (the bishops’ seats, the parishes and, from the thirteenth century onwards, the mendicants’ orders) and largely rural in the traditional monastic orders. Trust networks were also present within the aristocracies in the form of kinship groups sharing a common chivalric life style and by feudal bonds organizing groups of loyal armed followers. I argue that the emerging cities of Europe were home to several new forms of trust networks that strengthened the social cohesion within as well as between these urban communities. However, when in the thirteenth century the cities reached their medieval peak in population (Clark 2009), their sheer size and internal conflicts required institutions in which trust was no longer the self-evident basis of operation.

Six types

I now discuss the successive types of trust networks that came into being within and between urban communities. In the current literature, they have been described as distinct features having various names in different cities, without the link being made with regard to the similarity of their internal structure and their functional basis. A first type that comes to mind is that of traveling merchants seeking protection within horizontal associations such as guilds and hanses. From the eleventh century onwards, when the cities were in their phase of rapid growth, these associations offered many opportunities to people from all sorts of social backgrounds. Inclusion and social mobility were vital factors that promoted urban expansion. The administration of the cities was firmly in the hands of the local merchants’ family clans and associations, which I will consider as the second type of trust network. A third type emerged when artisans began to organize themselves in confraternities and craft guilds and challenged the merchants’ monopoly on economic, juridical and political power. In Italy, extensive trust networks of a fourth type were created as capital was accumulated on an ever growing scale in joint-stock companies that had agents in nodal cities from Palestine, Egypt and the Black Sea to the North Sea. In regions where the landed aristocracy held residence in the cities, they introduced their organizational pattern based on kinship and clienteles, which in the urban setting created a fifth type of trust network, that of the parties or even gangs struggling for local power. At the same time, a different process led to the formation of consolidated states. Their traditional elites belonging to the Church and the aristocracy merged into the new officialdom. In their midst emerged a sixth type of trust network that overarched the older ones and grew steadily. By this time, the older networks were already largely exclusive. All these networks were primarily located in cities, but the networks of servants of the state no longer primarily served the urban interests, although they may have mediated between cities and states. I focus on the most urbanized regions in Europe from the eleventh to the sixteenth century. For the first sections of my article, most data will be produced for the Southern Low Countries, one of the earliest and most urbanized regions, for which the available information is not easily accessible.

I clarify the ways in which the incipient urban communities succeeded in creating, almost from scratch, entirely new forms of social attitudes and relations. I think this issue has not been adequately dealt with even though its relevance is clearly apparent. Indeed, it is too easily taken for granted that emerging urban communities displayed a spirit of solidarity and held common values from the very outset. Not only does this seem highly unlikely in view of the rapid migrations that occurred and the frequent use of violence reported in the early cities. We have a number of sources that clearly demonstrate awareness of the need to impose new norms. These generally aimed at the internal pacification of the urban community and the external protection of its members. The norms changed incrementally as they gradually emerged over the centuries under the influence of measures taken to address urgent practical problems. There were no historical models or theoretical blueprints to fall back on in dealing with the challenges these growing urban communities had to face in Western Europe from the eleventh century onwards. Therefore, the outcomes of this incremental process varied greatly from one place to another. This was largely a new phenomenon in world history. The levels of urban autonomy and self-governance, combined with the protection of the rights of individual citizens and their property, are generally seen as the key elements that drove economic growth and particularly the development of commercial capitalism (Mielants 2007). This is what distinguishes the urbanization process in medieval Europe from all its precedents and sets it apart from the earlier developing cities of Asia.

The search for liberty

What did it mean in the first stage of urban growth for a landless laborer or serf to run away, try to escape the limitations to his personal freedom, but at the same time giving up the protection his lord had provided him within a domain structure? The earliest urban charters of liberty dealt with this matter. The oldest in the Low Countries is that of the town of Huy on the river Meuse, dating from 1066. Several articles deal with the position of serfs who fled their domain to go and work in the towns. If the lord of the domain came to claim his return and was able to prove his case, he could require the serf to continue performing his traditional duties for him (Joris 1959). This situation may have prevailed for some time in predominantly rural areas, but larger urban communities soon bought off the rights by which the landlords still limited their personal freedom. This was already the case before 1100 in places where the local lord was a bishop or an abbot, as in Cambrai, Utrecht, Tournai, and Nivelles. In the 1110s, the larger cities of Arras (1111), Ypres and Douai followed suit. In 1067, the count of Flanders, wanted to attract inhabitants to his newly-founded town of Geraardsbergen, strategically located on a hill on the border with the duchy of Brabant. He did this by promising independent jurisdiction by the aldermen. Freedom from judicial interference by the landlords meant a solid guarantee for the inhabitants of new towns, which would probably have been preferable to protection from their landlord. A further step was to ensure the legislative authority of these aldermen. The oldest documented right to create new urban law was granted to the small town of Aire-sur-la-Lys between 1093 and 1111. In 1127, the larger cities of Bruges and Saint Omer made clear that their support for a candidate-count would depend on his recognizing their right to modify their local customary laws in accordance to their needs. However, all this did not yet imply that all inhabitants of these cities would be considered as free men. King of France Louis VI (1098–1137) first orally granted personal freedom to citizens if they had been residents for at least one year and one day, a right that was acknowledged by his successors. In England, the oldest mention of these rights was in 1155, and in the Low Countries it first appeared in the foundation charter of the harbor town Nieuwpoort, dating from 1163. As in Geraardsbergen, a century earlier, rulers granted new privileges in the hope to see their own foundations grow (van Caenegem 1994; IDEM 1968).

Merchants’ associations

The unity of jurisdiction, legislation, and later also of equality in personal freedom, must have created some degree of homogeneity, social cohesion, and law and order within the cities, where masses of disgruntled migrants came together. Moreover, the urban liberties created relatively small isolated areas within an overall rural world still firmly dominated by feudal powers. Looking at the content of the oldest urban charters, the most general concern was that of the preservation of peace by sound jurisdiction, if necessary against everybody, including the count himself. As such, the citizens saw themselves as being united in defense against a world where violence was omnipresent. In the charter for Saint Omer, dated 1127, the newly-inaugurated count even recognized the sworn commune of the city, which had formed the core of the solidarity movement against all kinds of feudal restrictions. Citizenship was thus acquired on the condition of swearing an oath of loyalty to the community, which implied the observance of rules. The aldermen strove to limit violence within the city walls by ruling against fighting and feuding and by imposing restrictions on foreigners. They had to leave their arms at the city gate. Criminal justice grew increasingly detailed and aimed at controlling private violence through the prescription of peace-making procedures. Breaking a sworn peace was heavily fined.

Before cities had written charters, the core of cohesion among citizens was laid down at the level of the social elite, which consisted mainly of merchants. Their wheeling-and-dealing required various forms of organization to protect their vital interests in a world that was still dominated by feudal powers. The oldest documents informing us about the self-organization of traveling merchants designate their associations using terms such as amicitia, friendship, guild and hanse. The merchants of Valenciennes on the river Scheldt established a caritet: a charity or confraternity. In their statute, dated between 1050 and 1070, love of God, the observance of common religious services and solidarity among all brethren formed the basis of this group. The confraternity arranged funeral and memorial ceremonies for deceased brethren. The membership fee was used in charitable works for mutual support as well as for other inhabitants. Banquets and drinking parties, libationes were held to foster a sense of community. All these niceties were inspired by the material need for this solidarity group: members had to travel safely to markets and being armed and in a group was an effective way to protect and support each other. Conflicts between members had to be mediated by the other members.

Similar statutes have been preserved of the merchants’ guilds of Saint Omer and Arras, both situated in the county of Flanders, dating from 1072/1083. They are more explicit about the settlement of conflicts arising after too much drink. The deans of these associations not only mediated for guaranty for the members; they were even granted jurisdiction over the citizens. The gradual transition from private associations into public authorities is apparent in the charter for the amicitia of Aire-sur-la-Lys, dated before 1111. Twelve judges from their midst ruled over the town, applying laws they were entitled to amend themselves. The 1127 charter for the city of Saint Omer extended certain privileges exclusively to the members of the merchants’ guild. It granted its members the freedom not to pay tolls and the revenue from the local mint was assigned to the maintenance of the guild (Blockmans 1999).

One can thus conclude that in the eleventh century civilized behavior needed to be rigorously imposed upon the merchants’ elite through compulsory adherence to the association. That performed charitable works, religious ceremonies, convivial meetings, and the peaceful mediation of conflicts between members. This socialization process formed the condition required for the solidarity needed to protect trade beyond the city walls. In the course of the twelfth century, the merchants took the lead in forming what would become the public authority in the cities, and restricted certain material and judicial privileges to themselves. Their associations clearly functioned as trust networks, essential for the organization of the urban communities and for the trade between cities.

Merchants’ guilds as urban governments

Which new juridical regulations needed to be developed to enable the economic activities which would bring about the ongoing and self-sustained urban growth? Apart from a concern about peace and justice, urban charters abounded with advantages granted to the citizens of a particular city, such as freedom from paying tolls or taxes. Litigation concerning commercial affairs was only possible before the local aldermen, who were the experienced specialists in these matters. Their jurisdiction needed to be fast and efficient. Therefore, they introduced evidence on the only basis of sound testimony by trustworthy fellow citizens. In the 1127 charter for Saint Omer, we come across the concept of trust among some citizens who needed a quick settlement of disputes in relation to their trade, especially in cases of debt. The sworn commune thus formed the basis of a trust network, whose members were exclusively eligible for public office in the city. Their relations facilitated commercial transactions, and gradually their network extended to the government of the cities. The sometimes ferocious resistance by the feudal powers against the emerging communes helped to foster their cohesion, based on oaths of allegiance and reliability; the external threats strengthened the internal solidarity.

As soon as urban magistrates had seen their autonomy and legislative powers recognized, including their exclusive judicial competence over their burgesses, they firmly strove at supporting the economic interests of their own core group, that of the associated merchants and entrepreneurs. Personal freedom, the guarantee of property rights and secular jurisdiction by one’s peers were at the basis of this endeavor. A case in point is the abolishing of trials by ordeal, as first documented in the charter for Ypres in 1116. Further steps were the restrictions on the use of private violence and the protection of private property against confiscation. Mediation by experts came to replace the reliance on irrational factors for the settlement of conflicts. Urban charters steadily contain exemptions, extended to entire territories, from tributes, tolls, and other taxes charged on trade. Standardization of the quality of products, measures, weights, and currency was equally a major concern.

The physical protection of the traveling merchants and their goods that had first been organized by their private associations was now taken over by the cities’ public authorities. They concluded treaties with foreign rulers in order to ensure the security and trading facilities of their own citizens abroad. This implied that urban magistrates could also undertake diplomatic action in cases of a violation of their citizens’ rights. If disputes could not be settled by negotiation, urban magistrates would decree retaliations against the subjects of the foreign authority, as a way to pressure them into being more lenient. The arrest of merchants and confiscation of their goods was ordered by municipalities. However, such measures often triggered an escalation of the conflict, which then lasted longer and caused further damage to economic relations. Because of this, individual cities sought alliances with cities that had similar trading interests in order to extend the level of protection and increase their capacity to counteract. Originally, these urban leagues were private organizations set up by the merchants themselves. Depending on the flow and extent of urban development, public authorities took over this role and the principalities were to become the framework of their organization. The latter happened in the county of Flanders in the course of the thirteenth century (Blockmans 1994). The most prominent late example of such a transition is the German Hanse, which emerged as an association of merchants and did not become a league of cities until 1356 and continued to operate beyond the territories of the relatively weakly developed monarchic states in Northern Germany.

Even if the merchants’ interest groups managed to organize themselves at a supra-local level, the diversity and fragmentation of urban judicial spheres severely limited their capacity to protect their citizens beyond their own walls. The most extraordinary system of regional protection that developed in Northern France and Flanders in the twelfth century was that of the fairs. These were initiated by local authorities trying to attract merchants from abroad by offering them protection, not only in the city where the fair was held, but also along their journey. It was the coordination of a calendar of fairs throughout the year in a region protected by a single powerful ruler that created huge economies of scale. Fairs held on set dates improved the capacity to plan transactions in the long term, increased the intensity and speed of information exchange, and thus considerably reduced transaction costs. The counts of Champagne were the undisputed champions of this new regional system of fairs that linked Northern and Central Italy through Northern France, including Paris, with the cycles of fairs held in Flanders and Southern England (Pohl and Pohle 1991). The Lille fair is the oldest documented event in Flanders, mentioned in 1127. Yearly cycles developed in the course of that century. It became possible for merchants to plan journeys traveling from one fair to another, and from one region to the next. Increased revenue from local duties, dispute settlement and coinage were profitable for the authorities. The merchants appreciated the stabilization of the conditions protecting and facilitating their trade, which thus became more calculable.

These regular and predictable meetings brought about the development of international trust networks. About 8,000 contracts drawn up at the fairs of Ypres during the second half of the thirteenth century have been preserved and reveal regular transactions between merchants from Italy, England, Flanders, and France. Flemish merchants made agreements in Ypres to finance future fairs in the Champagne cycle with partners from England and Italy. This trust network now extended to the whole of Western Europe, and commercial credit became the foundation of all transactions from Italy to England via Champagne and Flanders (Blockmans 2001). Trust flourished under the protection of the local and regional judicial authorities, but probably even more through the sanction of exclusion that could be imposed by the highly profitable trust networks.

Craft guilds

From the mid-thirteenth century onwards, artisans in the most industrialized regions in Italy and the Low Countries started to organize themselves, following the model of the merchants’ guilds. Cities then reached the peak in their demographic growth and became exclusive. Their confraternities similarly were embedded in religious ceremonies such as funeral and memorial services, the cult of a patron saint via an altar or a chapel and processions. Charitable care for the sick and elderly members as well as for their widows and orphans was equally imitated from the merchants’ guilds, as were the dinners in common. As the large industrial towns like Arras, Douai, Ypres, Ghent, and Bruges grew increasingly divided by class conflicts, the merchants and entrepreneurs who monopolized the city administration strongly opposed the evolution of artisans’ confraternities into professional corporations supporting the social and economic interests of a particular sector (Najemy 2006; Wyffels 1951; Keene 2006; Rosser 2006).

The class conflicts, just as well as frictions with other, mutually-exclusive professional groups’ common interests and rituals, living in the same neighborhood, incorporated in the urban militias as a distinct entity behind their own standard: all these factors fostered the sense of community within the craft guilds. In the cases where they acquired a share in the city’s government, such as in Flanders after 1302, the relations between the members shifted from mutual trust and charitable support vis-à-vis common enemies towards the sheer defense of material interests. Some of the largest corporations in the textile sector counted several thousands members, which is a size to which the concept of trust network can no longer be applied (Prevenier 1983). Entrepreneurial patterns based on putting-out and subcontracting undermined the alleged equality and brotherhood among the guild members. Nevertheless, it has been suggested for Paris and other European cities from the late Middle Ages to the end of the Ancient Régime that “most trades were organized around complex networks of informally constituted co-operative arrangements involving varying combinations of partnership, patronage, and clientage (Sonenscher 1989, As cited by Lis and Soly 2008).” Evidently, the role of the corporative movement in the formation of the urban communities cannot be neglected. The growing complexity of the urban societies was stabilized by its corporative structure; each of its components found its origins in a trust network.

Merchants’ companies

The system of international fairs described above was one of the many scenes on which the fourth type of trust network operated, namely the companies of merchants from cities in Northern and Central Italy. In the mid-thirteenth century, they appeared in contracts under the name of a particular family based in a particular city, with their partners. These joint-stock companies had grown from a family association into a larger organization attracting other investors and agents. They sent their junior partners as their representatives in their various locations as well as to the major fairs. Given the large scale of the operations and the huge investments and risk involved, trust must have been the basis of these commercial companies, which extended their network from one Italian city to many others in the Peninsula, around the Mediterranean and in Western Europe. Family ties stood at the origin of these trust networks while other shareholders and agents were bound by the high professional standards of these companies. New accounting techniques such as double booking-keeping guaranteed permanent control of the transactions. Agents abroad had to keep close contact with the headquarters through intensive correspondence of letters and bills of exchange (Hunt 1994; Hunt and Murray 1999).

Party clans

Not all cities and towns were dominated by merchants, nor did craft guilds generally acquire political participation. These relations obviously depended on the local development as an export-oriented economy of a substantial size. And even in Northern and Central Italy, where this was clearly the case, the balance of power between the merchant class and the aristocracy living in the cities as well as in the countryside was more complicated. Venice may have been the clearest case of a merchants’ republic, but in most land-locked cities the rivalry between popes and emperors, from the twelfth to the fourteenth century, dragged the aristocracy into the formation of antagonistic clans (Crouzet-Pavan 1997; IDEM 2001, 2002, 2009). Their conflicts continued to dominate the political culture even beyond the original controversies, as the parties absorbed and re-oriented all controversies in the urban community towards their own goals. Mutual exclusion from power and banishment of the losers from the city perpetuated the tensions and exported them into the countryside. This pattern has been described for the Italian and Catalan cities as well as for the Northern Low Countries (Heers 1977; Najemy 2006; Curull 2009). At the origin, parties and clans were based on the loyalty of family bonds. Their appearance seems bound to the presence of the aristocracy in the cities, which introduced there the type of power struggles and the organization based on clienteles. Their extension brought the inclusion of friends and clients whose social status may have been much lower. Parties were rather vertical organizations, in which differences of social class were superseded by the sheer strife for power.

Officialdom

The sixth and last type of network, that of state officials, mainly recruited citizens as experts in the centralization of statecraft. An early case is that of Castile where urban oligarchies were dominated by the caballeros, the lower nobility living in the cities and living off their landed properties acquired during the Reconquista. Their military service for the king and counts yielded them spoils of war. From the twelfth century onwards, they represented the cities in the Cortes. By this accumulation of power, they could keep down the political weight of merchants and craftsmen (Asenjo-Gonzalez). While state personnel had traditionally been recruited from the clergy and the aristocracy, since the fourteenth century, the growth of central institutions attracted university-trained lawyers and financial specialists from urban origins. Socialization with the prevailing aristocratic values implied that burgesses devoted their skills less in favor of urban development than for the strengthening of state domination over the cities. On the other hand, states increasingly used their supremacy to appoint their officials in the cities and gradually extend their powers (Reinhard 1996; Asenjo-Gonzalez 2009, 35–45).

This was the period, after 1300, which the late Larry Epstein characterized by the cities’ “institutional inefficiency” as a consequence of the “jurisdictional fragmentation” and the “parcellization of sovereignty (Epstein 2000).” In my opinion, his interpretation of “Freedom and Growth” is only correct from the viewpoint of public institutions. On that level, monarchic states indeed proved often more efficient than regional states under urban hegemony. They balanced countervailing powers within larger territories. However, one should not overlook the lasting cases of Venice, the United Provinces, and the Swiss Confederation. Nor should the efficiency of monarchies be overestimated. Until the end of the sixteenth century, the complex balances between cities and states left room for mutual bargaining and support, as well as for hostilities and increasing state domination. Urban elites, seated in the nodes controlling territories, often negotiated private privileges including control of the countryside in exchange for financial, military, and strategic services (Isaacs and Prak 1996; Hart 1994; Blickle 1997; Blockmans et al. 2009).

Functions and limits

In the preceding pages, a number of trust networks have been observed and classified into six types. Each of them fulfilled particular functions in a specific period of the development of cities. Proximity facilitating frequent personal contacts, situations of open competition or even of external threats over and again were the most favorable contexts to see trust networks actively engaged in social change. Some of them lost their functions over the course of time. Merchants’ associations were successfully able at some point in time to civilize their companions, to organize their collective self-defense, to have them protected during their journeys as well as privileged by consolidated states, and to negotiate with foreign authorities on trade regulations. From the fifteenth century onwards, the protection, jurisdiction, and negotiation about trade relations increasingly became concerns the territorial states claimed to fulfill. However, private corporations of merchants continued to take care of these primordial issues in regions where states were weak as well as on the maritime routes beyond the jurisdiction of any state. One may think of the chartered companies that organized most of the colonial trade until the early nineteenth century. Internal pacification and the generalization of the rule of law by the sixteenth century led in most European cities to the extinction of armed conflicts between private gangs or parties who took the law in their own hands. However, even nowadays the weakness of state power in Southern Italy and Eastern Europe still gives this phenomenon contemporary relevance.

In most cases, the local merchants’ guilds had to give up ruling their city exclusively. The arbitrariness and abuse of power by their monopolistic governments from the thirteenth century onwards led to revolts that triggered the intervention of the territorial rulers who imposed a division of power among contending factions (Blockmans 1989; Boone and Prak 1995; Boone 2007; Curull 2009, 10). From a structural viewpoint, one may also argue that cities had simply grown too large and had internally become too diversified to be ruled by a merchants’ trust network. Institutions and professionals took over and created a more formalistic type of government in which countervailing powers were kept in balance. Cities may still have been ruled by oligarchies, but these could no longer function on the basis of trust networks alone. A similar reasoning applies to the craft guilds that, by growing and getting involved in the participation of some forms of local government, became formal institutions applying rules rather than relying on the mutual trust between their prominent members. Roberto Michels’s iron law of oligarchization fully applied to guilds and crafts. The same can be said about the trust networks that in the early stage of state building, could act as mediators between cities and states. However, the growth and professionalization of state bureaucracies increasingly limited their impact. State officers gradually became recruited more on the basis of merit than that of friendship and trust. This mechanism equally applied to trading companies: the larger they became, the more they had to develop as formal institutions applying rules.

Obviously, these tendencies are far from absolute: even in the present day, trust networks play a role, also in large organizations. What we could observe was that various types of trust networks were essential in transitional stages, before the formation of new institutions: they fostered the sense of community among particular groups in the emerging cities; they helped to create systems to protect and regulate regional and international trade; they were at the basis of systems of social security and the defense of workers’ rights; they were at the core of joint stock companies operating on an intercontinental scale; they were intermediaries between aristocratic, municipal, and state power systems. In all these situations, trust networks were needed to create new activities and social relations. Once these communities became successful and grew, they required institutionalization and reduced the trust networks to possibly influential but no longer determining organizations, resisting “incorporation by cities and states,” as noted by Charles Tilly.

For my purpose here, however, it is essential that in the very long term the fourth trust network type—the international trading and entrepreneurial companies—continue to prove the extraordinary adaptive capacity of capitalism. These networks grew to a scale that outclassed that of most modern states—even if at this very moment states come to rescue some of them. But this exactly supports my point: the originality of the medieval commercial trust networks continued to create freedom as well as growth, at least for their privileged members.