Although we still live in the shadow of the years between the First and the Second World Wars, already it seems quite clear that future historians of economic thought will regard John Maynard Keynes as the outstanding economist of this turbulent period. As one writer has recently said, “The rapid and widespread adoption of the Keynesian theory by contemporary economists, particularly by those who at first were highly critical, will probably be recorded in the future history of economic thought as an extraordinary happening.” Book after book by leading economists acknowledges a heavy debt to the stimulating thought of Lord Keynes. The younger generation of economists, especially those whose thinking matured during the great depression of the thirties, have been particularly influenced by him.

The first formal meeting of the Economic History Association after This death should not close without appropriate tribute to our initial president and the first real American economic historian, Edwin F. Gay. More than most members of the Association, I feel his loss, since in one capacity or another I had the good fortune to be associated with him for almost thirty-five years. And I am the more appropriate agent to render our common tribute, since, more than others, I am indebted to him. I realize that, without his instruction, encouragement, and stimulation, I should not be standing here as a successor to him in office.

At thirty-seven John Luccock was looking forward with quiet assurance to a gentle transition into the comfortable middle age of a sedentary merchant. Napoleon and Jefferson spoiled his view, and before he was thirty-eight he had gone rolling down to Rio. There for ten years he imported and exported; watched a sleepy colonial outpost transform itself painfully into an imperial capital city; rambled, notebook in hand, around the almost trackless interior of Brazil, studying the remnants of an aboriginal culture and the way of life of those who had come to conquer. At forty-eight he returned home, leaving his health and middle age behind him. At fifty-six he died.

To study the role of the entrepreneur is to study the personal factor in economic history, to introduce the problem of what today is called the businessman. Unfortunately, or fortunately as the case may be, the expression “businessmap” was apparently not used in late colonial times, although “going into business” or “going into merchandising” was. The distinction is important; the colonial economy was far too general, and its participants too many-sided, to permit the assumption that there was a colonial man of business in the modern business sense.

According to the articles of association forming the Medici partnerships, the purpose of the banco in Florence and of the branches abroad was “to deal in exchange and in merchandise with the help of God and good fortune.” When we ask just what is meant by dealings in exchange and in merchandise, we are led to examine how the Medici raised the funds with which they operated, to study their role as fiscal agents of the papacy and lessees of the Tolfa alum mines, to consider the technique they used in international banking, and to look into the reasons for their failure. The Medici did not innovate in international banking, they followed existing business practice; but their records are an extremely valuable source of information, if only for the sake of comparison. Let us begin by finding out what is meant by dealings in exchange and then tackle the other problems.

The organization of a commercial firm or a corporation is usually J. determined by the nature of its business. We must, therefore, know the meaning of the word “bank” which appears in the title of this study. Today this word has a variety of meanings. There are all sorts of banks: central banks, commercial banks, member banks, and so forth. In the fifteenth century, there were not so many kinds of credit institutions. But still the word “bank” had more than one meaning. What kind of a bank was the Medici bank?

The spring-wheat region, stretching from central Minnesota across the X Dakotas and into Montana, has been the seat of much unrest owing to its unbalanced development from 1870 to 1920. It was colonized by seekers of the proverbial “free home” and fabulous profits to be had by raising wheat. As a result many farmers assumed burdensome economic ties and fell victims to over-optimism. Their difficulties were due to a variety of complex factors, some within and others outside their control; yet, one trend stood out noticeably: the grain growers persisted in a ruinous, anarchistic form competition, whereas among the merchants and their powerful allies competition was closely regulated.

In spite of a vast critical literature of increasing agreement, Shaw is stillregarded by many as an irresponsible clown and by many more as a negligible thinker on serious subjects. No one can read about him without realizing that he is anything but negligible. Mr. T. A. Knowlton has thought his economics worthy of lengthy and respectful treatment, and many authorities have attested to his importance in the history of socialism. In her recent work Mrs. Helen M. Lynd says that the Fabian Society developed under the inspiration of Shaw; he “set its early tone.”

This paper is concerned with the semipiratical entrepreneurs who roamed the United States virtually unchecked before 1903, save for who the opposition of a few publicists and some short-lived vigilante committees. Contemporaries, following Henry Demarest Lloyd and Carl Schurz, likened businessmen of this type to the nobles who infested the Medieval Rhine. The term “robber barons” has stuck to them through the years despite occasional attempts at rehabilitating one or another who stood out above the throng by virtue of his accumulations or philanthropy. Only recently, for example, Howard Mumford Jones distinguished between the “cruelty” and the “culture” of these magnates whose behavior in the commercial-political and the artistic-literary fields he prefers to liken to the “commercial tyrants” of the Renaissance. No one to date, so far as I know, has attempted to distinguish from their strictly buccaneering activities the permanent contributions made by these businessmen as a group to American business practices. Such is the purpose of this paper.

This is frankly a paper with a purpose. It is a plea for the abandonment of that academic isolationism that marks our teaching of the economic history of the United States, and for at least an occasional glance at those other new countries to which Europeans flocked between the sixteenth century and the drying up of intercontinental migration less than two decades ago. The plea might be made on the high ground of promoting international understanding and of making our leadership in world affairs better informed. I am content to present it on the lower plane of improving our teaching of this country's economic and social development. If we examine the story of those areas that have had basically the same experience as ours, we begin to notice the significance of some things here that we have always taken for granted. Some of our problems lose their terror when we discover that other countries are also plagued with them; some of our ideas or methods may look better, or worse, when we contrast them with those of other regions; and some of our achievements may appear greater, or less, when we place them alongside the accomplishments of Australians, Canadians, New Zealanders, South Africans, Latin Americans, or Russians in Siberia. It used to be said that the study of the varied forms of government in the eastern Mediterranean made the Greeks good political scientists. Some comparative study of the quantity and character of material development among the peoples just listed might make us better American economic historians.

That the later Roman empire was a period of stagnation, not to say X of decline and total collapse, in the economic as in other spheres has long been recognized. But it has been the contribution of such modern scholars as Frank, Rostovtzeff, and Heichelheim to show that the symptoms and causes of this stagnation are not to be sought solely in the anarchy of the third century A.D. They may be detected earlier, behind the facade of peace and prosperity in the second century, and have roots which reach back into the very beginnings of the Roman domination over the Mediterranean world. In order to avoid too great extension in time, as well as in space, the present discussion will be limited to the symptoms and causes of economic stagnation that may be detected throughout the Mediterranean world during the early Roman empire, the two hundred and fifty odd years that elapsed from the Battle of Actium in 31 B.C., which left Augustus master of the Mediterranean world, to the assassination of Severus Alexander in 235 A.D., which ushered in a half century of anarchy and eventually the totalitarian state of Diocletian and Constantine.

All scientific research requires at its initial stage as precise a formulation of the problem under investigation as is possible to the human mind. In a study of retardative factors in French economic development in the nineteenth and twentieth centuries, the need for clarifying the implications of the subject and of removing possible ambiguities is particularly urgent. By economic development is meant here an increasing amount of goods and services which are customarily exchanged for money. I am eliminating from consideration many of the intangibles of life, which are important and which the French may have in abundance, like joie de vivre.