Private Capital Management: a Case of Vilnius in the 17-18Th Centuries
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VILNIUS UNIVERSITY LITHUANIAN INSTITUTE OF HISTORY Darius SAKALAUSKAS Private Capital Management: a Case of Vilnius in the 17-18th Centuries DOCTORAL DISSERTATION Humanities, History and Archaeology H 005 VILNIUS 2019 This dissertation was written between 2014 and 2018 at Vilnius University. The research was supported by Research Council of Lithuania, GEOP research fellowship in POLIN, Warsaw (Poland), Herder Institute in Marburg (Germany). Academic supervisor – Prof. Dr. Jurgita Verbickienė (Vilnius University, Humanities, History and Archaeology – H 005) TABLE OF CONTENT INTRODUCTION .......................................................................................... 5 1. CAPITAL IN THE 17-18TH C. GRAND DUCHY OF LITHUANIA: ANALYSIS OF THE CONCEPT AND THEORETICAL APPROACH .... 24 2. ECONOMIC STATE OF VILNIUS FROM THE MIDDLE OF THE 17TH C. TO THE END OF THE 18TH C.: A GENERAL OUTLOOK, LEGAL FRAMEWORK AND KEY IMPLICATIONS TO THE CAPITAL MARKET ............................................................................................................ 36 2.1. Urban development and key events in the 17-18th c. ................ 36 2.2. Demographic trends in Vilnius in the 17-18th c. ....................... 38 2.3. Jurisdictions of the city ............................................................. 41 2.4. Legal framework for the capital market in Vilnius .................. 46 2.5. Trade, crafts and manufactories ............................................... 57 2.6. Key capital holders in the city .................................................. 62 3. ECONOMIC CAPACITY OF THE SELECTED SOCIO-ECONOMIC GROUPS IN VILNIUS ................................................................................ 68 3.1. Vilnius citizens as the capital holders ...................................... 68 3.1.1. Capital in the possession: the analysis of the inventories . 68 3.1.1.1. Elite ............................................................................. 74 3.1.1.2. Merchants .................................................................... 80 3.1.1.3. Artisans ....................................................................... 82 3.1.2. Capital management by Vilnius citizens .......................... 85 3.1.2.1. Ownership of the immovable property and its management ..................................................................................... 85 3.1.2.2. Investment in credit ..................................................... 96 3.1.2.3. Wealth distribution to the Church institutions........... 101 3.2. Case of the ecclesiastic institution: the Franciscans as the capital holders ................................................................................................ 104 3.2.1. Economic capacity of the Conventual Franciscans and their revenue model .................................................................................... 105 3.2.2. Franciscans as the financial institution ........................... 110 3.2.3. Property management ..................................................... 112 3 3.3. Jewish economic capacity in Vilnius: a growing community with the debt burden ....................................................................................... 117 3.3.1. Jews in the 17-18th c. Vilnius: a demographical trend and their economic structure .................................................................... 117 3.3.2. Vilnius kahal as an economic entity in the city .............. 122 3.3.3. Economic strength of the individual Jews ...................... 130 3.4. Economic capacity and the Radziwiłł family’s policy towards their Vilnius jurydyka ............................................................................ 137 3.4.1. Development of the Radziwiłł jurydyka in Vilnius ........ 138 3.4.2. Economic scope of the jurydyka ..................................... 142 3.4.3. Radziwiłł policy of capital management in Vilnius ....... 148 4. CAPITAL MOVEMENT AND DISTRIBUTION .......................... 153 5. REGIONAL PERSPECTIVE ON THE CAPITAL MANAGEMENT PRACTISES IN VILNIUS ......................................................................... 164 5.1. Warsaw ‒ a growing metropolis ............................................. 165 5.2. Konigsberg – a getaway to the Baltic Sea .............................. 169 5.3. Lvov ‒ a regional economic and political centre .................... 175 5.4. Comparative conclusions: Vilnius in the context of the analysed cities and beyond .................................................................................... 180 CONCLUSIONS ........................................................................................ 184 LIST OF FIGURES AND TABLES .......................................................... 189 List of figures .................................................................................... 189 List of tables...................................................................................... 189 SOURCES .................................................................................................. 191 Unpublished ...................................................................................... 191 Published ........................................................................................... 193 BIBLIOGRAPHY ...................................................................................... 196 ANNEX ...................................................................................................... 218 Annex No. 1 ‒ List of the used Vilnius citizens’ inventories ........... 218 NOTES ....................................................................................................... 224 4 INTRODUCTION Let us now go back to the time after the introduction of money. The ease with which it can be accumulated made it the most sought after form of moveable wealth, and furnished the means of accumulation unceasingly by the simple means of thrift. Whoever, either from the revenue of his land, or from the wages of his labor or industry, receives each year more value than he needs to spend, may set aside this surplus and accumulate it: these accumulated values are what is called a capital. The timid miser who accumulates money with the objective of preventing worries about lacking the necessaries of life in an uncertain future, keeps his money in a hoard. If the dangers which he foresaw should eventuate, and he in his poverty should be reduced to live each year upon his treasure, or if a prodigal heir should spend it by degrees, this treasure would soon be exhausted, and the capital entirely lost to the owner. The latter can draw a far greater advantage from it. Since a landed estate of a certain revenue is only the equivalent of a sum of value equal to this revenue multiplied a certain of times, it follows that any sum whatsoever of value is equivalent to a landed estate producing a revenue equal to a definite fraction of this sum: it is perfectly the same whether this sum of value, or this capital consists of a mass of metal, or of any other matter, since money represents every kind of value, just as every kind of value represents money. In the first place, therefore, the owner of a capital can use it to purchase lands, but he has other possibilities as well1. Relevance. Perhaps this quote from Anne Robert Jacques Turgot (1727- 1781), a renowned French economic theorist and statesman in the 18th c., reflects best the main idea of this work: a discourse about the accumulation of wealth and its management. Analysis of accumulation of wealth in the early- modern Polish-Lithuanian Commonwealth (further PLC) is most often linked with the macroeconomic analyses on where the PLC economy stood in the grand schemes the overall development of the European and for that matter, global economy. The examples of such approach are the works by Immanuel 1 A quote from his main work “Reflections on the Formation and Distribution of Wealth“, text No. 58 titled „Every money capital, or every sum of value, whatever it may be, is the equivalent of a piece of land producing a revenue equal to some definite fraction of this sum. First employment of capitals. Purchase of landed estate“, in: The Turgot Collection, 2011, p. 34-35 5 Wallerstein2, Marian Małowist3, Witold Kula4, Jerzy Topolski5, and many others. Not neglecting the importance of these works where the focus was based on finding the key reasons for the economic divergence, majority of them concentrate on the issues on the macroeconomic level. That enables us to understand more on the overall country’s production outputs, production centres, main trading partners, trading balances and other components in the macroeconomic field. However, these economic history studies often lack analysis that would help to understand how the day-to-day economics functioned. The accumulation of surplus wealth, i.e. capital in the way it is going to be used in this work6, can be very useful in understanding how the daily economic activities were organized. It can help to comprehend better how the money was accumulated by the different groups of people, the way it was saved and used, how it was transferred and what substitutes were in place, how rational was its management, were there any rationality differences between the different groups of people. All these practises in turn can also tell us more about the institutional framework of the Grand Duchy of Lithuania (further GDL). Until now we know very little about these issues as perhaps with the general economic history of GDL.