Business History Review

Research Article

The Origin and Development of Markets: A Business History Perspective

Mark Casson and John S. Lee


The origins of the market are obscure, but substantial documentary evidence survives from the eleventh century onward, when chartered markets and new towns were established across Western Europe. The expansion of the market system is important for business history because it created new opportunities for business growth. There has been no systematic literature review on market evolution since Henri Pirenne and Raymond de Roover, and this article attempts to fill the gap. It shows that successful markets were regulated–often by civic authorities–to maintain a reputation for reasonable prices and quality control. Markets were located at both transport hubs and centers of consumption, even when the latter were quite remote. However, as transport and communication costs declined, shakeouts occurred and only the larger markets survived.

MARK CASSON is professor of economics and director of the Centre for Institutional Performance at the University of Reading. His recent books include The World's First Railway System (2009), Entrepreneurship: Theory, Networks, History (2010), and an edited collection of papers on Markets and Market Institutions: Their Origin and Evolution (2011).

JOHN S. LEE is a research associate at the Centre for Medieval Studies at the University of York. Among his publications are Cambridge and Its Economic Region, 1450–1560 (2005) and “The Functions and Fortunes of English Small Towns at the Close of the Middle Ages: Evidence from John Leland's Itinerary” in Urban History (2010).