MECHANISMS AND CRITERIA OF COOPERATION IN TRADING NETWORKS OF THE FIRST GLOBAL AGE The case study of Simon Ruiz network, 1557-1597 by Ana Sofia Vieira Ribeiro A thesis submitted in fulfillment of the requirements for the degree of Doctor in History Supervisor: Professor Doctor Amélia Polónia Co-supervisor: Professor Doctor Margrit Schulte Beerbhül Faculty of Arts, University of Porto 2011 2 Abstract Mechanisms and criteria of cooperation in trading networks of the first Global Age. The case study of Simon Ruiz network, 1557-1606. by Ana Sofia Vieira Ribeiro Cooperation is an essential behavior in human society. It presumes that people gather efforts to obtain a benefit at a minimum cost, even with different goals and with different motivations. This kind of behavior acquires a specific frame in connection with trade and financial markets and networks, in the present or in the past. This dissertation focuses in the study of the mechanisms and criteria of cooperation in those trade networks, in a wide sense, in the sixteenth century, through the case study of the New Christian Castilian merchant Simon Ruiz. His business affairs were extended throughout all Europe and some Portuguese and Spanish colonial spaces. For this purpose, letters of exchange and commercial correspondence, kept in the archive of his company are the main primary sources to check four different hypothesis: 1)The dynamics of cooperation in a certain historical network, besides conditioned by issues of economic and political conjucture, are related with intangible factors, as trust, reputation, gossip or risk. 2) Trading networks had a dynamic lifecycle, they arise, change and finish according to their own dynamics and pressured by contextual circumstances. 3) Partners in trade have the tendency to be more punitive regarding the breakdown of norms created by the functioning of the network. 4) The endogamy and kinship of an economic and financial network in the 16th century was limitative, since merchants and bankers were obliged to find partners outside the initial, familiar and ethnic network of cooperative contacts for them social and economic survival. Key words: cooperation, trading networks, trust, reputation A cooperação é um comportamento essencial na sociedade humana, de acordo com o qual as pessoas unem esforços para obter um benefício a um custo mínimo, mesmo tendo objetivos e motivações diferentes. Esse tipo de comportamento ganha formas específicas em redes de comércio e em mercados financeiros, no presente ou no passado. Esta dissertação pretende focalizar a atenção no estudo dos mecanismos e critérios de cooperação neste tipo de redes, no século XVI, através de um estudo de caso: o do cristão- novo castelhano Simon Ruiz, cuja actividade se estendeu por toda a Europa e nalguns espaços 3 coloniais de Portugal e Espanha. Para este propósito, letras de câmbio e correspondência comercial de sua empresa são as principais fontes primárias para testar quatro hipóteses diferentes: 1) A dinâmica da cooperação numa determinada rede histórica, além de condicionada por questões de conjuntura económica e política, estava relacionados com factores intangíveis, como a confiança, a reputação, o boato, ou o risco. 2) As redes de negócio tinham um ciclo de vida dinâmico: elas surgem, alteram-se e terminam de acordo com a sua própria dinâmica e pressionados por circunstâncias contextuais. 3) Os parceiros comerciais têm a tendência a ser mais punitivos em relação à quebra das normas criadas pelo funcionamento da rede. 4) A endogamia familiar e étnica de uma rede económica e financeira no século XVI era limitativa. Palavras-chave: cooperação, redes comerciais, confiança, reputação 4 ACKNOWLEDGMENTS Writing a dissertation is supposed to be a lonely task. However, the participation in DyncoopNet’s research team has taught me, since the beginning of this process, four years ago, that I would need lots of help, learning and discussion with other people. To all of those I would like to thank (and I am sure I will forget someone): First of all, to those who tried to provide my demands in bibliography, especially librarians from the Faculty of Arts library (University of Porto), from the University Library of Santiago de Compostela and from various Faculty Libraries from the University of Lisbon. To Professor Inês Amorim and Helena Osswald for hearing my doubts, advising about bibliography and research opportunities, but mostly for considering this work. To History’s PhD colleagues in the Faculty of Arts, University of Porto with whom I exchanged doubts, problems, questions and insights so often. In those I have underline the unconditional friendship of Patrícia, Sara and Rosa who always had a caring word in times of dismay. To Professor Jack Owens, to whom I have to thank for creating a common broad research project as DyncoopNet, which opened so many new research questions and different methodologic fields. I also I have to thank for the support and for believing so much in my work and research abilities, which I hope to correspond. To Doctor Ana Crespo Solana, Professor David Alonso Garcia and Professor Cátia Antunes for the discussion on specific topics of this dissertation and for important bibliographic suggestions on Early Modern European history. To Flávio Pinheiro, Doctor Francisco Santos and Professor Jorge Pacheco from the Applications of Theoretical Physics Group, for important advices on the theory, bibliography and methodologies regarding cooperation studies. And also for being able to translate all the mathematics to my non-mathematical mind. To Professor Margrit Schulte-Beerbhül for accepting to be the co-supervisor of this dissertation and for successively clarifying my doubts with her expertise in Early Modern business networks, merchant correspondence analysis and important theoretical insights that has given to this dissertation. To João Carvalho for all the technical support on the constitution and improvements of the DyncoopNet’s-pt database and for being tireless in creating all the research SQL queries I needed for this research project. 5 To Professor Joaquim Carvalho for being my Master regarding historical network analysis. Almost all I know on that topic, I owe to him. Finally, to Professor Amélia Polónia. I have no words to express my gratitude for the opportunity she has given to me for participating in this research project. In this four-year journey I could count with her expertise advices, her friendly words, her companionship in all the things we have learned together. Mostly, I have to thank for the entire expertise and research rigor she has shared with me. I hope we will continue to work together for many years. 6 TABLE OF CONTENTS Table of contents, 7 List of Charts, 9 List of Figures, 9 List of Tables, 10 Network Analysis terms, 11 Acronyms and abbreviations, 11 0. Introduction, 13 I. Theoretical and methodological guidelines, 19 1. A multidisciplinary approach: the research on the issue of cooperation in merchant networks in the 16th and 17th centuries, 19 1.1. Cooperation – mechanisms and conditions for emergence, 19 1.2. Trust and reputation,23 1.3. Social network analysis,25 1.4. Early Modern merchant networks in historiographical approach, 31 2. Theoretical assumptions, 36 2.1. Problematic in analysis: research questions and hypothesis, 36 2.2. Cooperation: a concept under discussion, 40 2.3. Levels of cooperation, 44 3. Empirical work, 45 3.1. Space and time, 45 3.2. Sources, 49 3.2.1. Bills of exchange, 49 3.2.2. The commercial correspondence, 52 4. Methodological options, 55 7 II. Diachronic evolution of Simon Ruiz network and partner choice criteria (1553-1597), 59 1. The initial years, 60 2. The first expansion period: 1560-1564, 67 3. An unstable stability (1565-1568), 81 4. Difficult years (1569-1573), 91 5. The crisis opportunity (1574-1580), 97 6. Europe in conflict (1588-1590), 109 7. The end of a generation (1595-1597), 125 III. Mechanisms of cooperation, 139 1. Endogamic connections within Simon Ruiz network, 139 1.1. Kin endogamy: the case of Ruiz family, 139 1.2. Confessional endogamy, 148 1.3. National endogamy, 151 2. Levels and mechanisms of economic cooperation and competition between Simon Ruiz and agents in Portugal, 1557-1580, 153 2.1. Warning relations and the circulation of information, 154 2.2. Collaboration ties, 160 2.3. Non-cooperative behaviors, 167 3. Trust and distrust, 175 3.1. Trust relationships, 177 3.2. Reputation and rumor, 181 IV. Final remarks, 191 V. Sources and bibliography, 199 1. Manuscript data sources, 199 2. Bibliography, 199 8 LIST OF CHARTS 1. Nationality of Simon Ruiz partners in 1558-1559, 64 2. Nationality of Simon Ruiz partners, 1560-1564, 72 3. Geographical distribution of Simon Ruiz partners by nationality, 1560-1564, 75 4. Nationalities of Simon Ruiz network partners, 1565-1568, 88 5. Nationalities of Simon Ruiz's partners, 1574-1580, 103 6. Nationalities of Simon Ruiz's partners, 1588-1590, 115 7. Nationalities of Simon Ruiz's partners, 1595-1597, 129 8. Comparative evolution of the number of acts and the number of network nodes per year, 1558-1597, 135 9. Typology of collaboration ties in Simon Ruiz's Portuguese affairs, 1558-1580, 164 10. Trust relations contents in Simon Ruiz network, 1553-1597, 180 11. Quality of news (rumours) in Simon Ruiz’s Portuguese correspondence (1557-1580), 182 LIST OF FIGURES 1. The Philip II’s wars, 47 2. Simon Ruiz network in the years 1558-1559, 62 3. Simon Ruiz network in 1562, 69 4. Simon Ruiz network, 1560-1564, 70 5. Simon Ruiz Network, 1565-1568, 84 6. Simon Ruiz’s network betweenness distribution, 1565-1568, 86 7. Simon Ruiz network in 1569, 92 8. Simon Ruiz’s network betweenness distribution, 1569-1573, 95 9. Simon Ruiz Network, 1574-1580, 99 10a. 20 biggest total degrees in Simon Ruiz’s network, 1574-80, 101 10b.