F. J. Fisher’s succinct definition that ‘Enclosure–i.e. the suppression of common grazing rights–by agreement was a feature of the age,” but he also acknowledges the huge sweep of time enclosure persisted, adding his next sentence “But as pressure on land mounted, the question of its use became increasingly a political one.“ [99] F. J. Fisher, Tawney’s Century”, in Essays in the Economic and Social History of Tudor and Stuart England (Cambridge at the University Press, 1961), p. 5. The devastating Black Plague followed in the fourteenth century but that didn’t stop the enclosure movement. Between the two the traditional English manor was being radically altered: the manor’s economy’s traditonal class configuration of aristocrats, church and their estates, and serfs was profoundly ruptured and a new proto class configuration would emerge.
Previously, manor land had been available to serfs for common use such as firewood, grazing livestock, and hunting. With enclosure by the manor lord, these acres were demarcated by enclosing them with hedges or fence after harvest. Once enclosed the lords used the enclosed area for their sheep herding, which they either used for meat or set their manor serfs to make raw wool/cloth. The net result of early inclosure was more often than not, the removal of land from serfs and the increased use of sheepherding for wool and meat. The former provided the raw material for wool and cloth manufacturers who in rather short order formed companies and grew into England’s first export manufacturing cluster.
You Can’t Keep them Down on the Manor: Cloth/Wool Manufacturing/Merchant Clusters Develop: Overtime the enclosure movement created several groupings from serfs that were dispossessed from the confiscated land: The first group, and the most fortunate, were those serfs that were able to purchase or acquire land from the lord thus becaming free holders, i.e. former serfs. A second group spun off from the manor were proto artisans and trading merchants who usually moved off the manor and gravitated to more urban settlements. From these urbanized areas they formed a nucleus for further growth of population and wealth that developed into an urban center.
The third group, those serfs that abandoned their manor and headed for wherever they could find a living to sustain themselves and their households. The simple act of enclosing part of their land reshaped over time manor agricultural economics and facilitated urbanization, class mobility, and population mobility. Each driver interacted with the others and, without intention or planning, England was infused with sustained drivers of change that led away from a strict medieval economy. With increased population mobility less tied to agricultural manors a new population drove a new urbanization movement that continued for five hundred years.
Enclosure Movement Creates Clusters in Sheepherding, Raw Cloth and Wool Mfg, Population Mobility that Results in English Urbanization with London Evolving Into Homebase of Wool&Coth Mfg Oligarchy Company of Merchant Adventurers and a One Export No Import Overseas Commerce—
As to the manor, England’s medieval unit of its agricultural economic base, the effect of those changes were to remove land from use by serfs and encourage them to move on for better or worse. That resulted in a new group of free holders (i.e. non-serf landowners), some of which evolved into gentry resulting from some entrepreneurial venture. After the black plague when local agricultural labor became expensive and forced manor lords to respond, created a new round of tensions and outcomes.
In the later years of this transition, the Tudor’s tended toward preservation of arable land, but its priority was low and attention to it was inconsistent, leaving its implementation to those with “a dog in the fight”. In several ways by the 1550’s enclosure had settled into a position similar to our present day eminent domain: messy, loud, oozing moral platitudes, and decided upon by local justices-jurisdictions. [99] See also Maurice Beresford, “Habitation versus Improvement: the Debate on the Enclosure Agreement” in F. J. Fisher, Essays in the Economic and Social History of Tudor and Stuart England (Cambridge at the University Press, 1961).[999] Development of proto-classes, artisans, free holder agricultural householders broke away from serfdom and created opportunities for future generations, while a more mobile English population moved about to find and take advantage of opportunities that fostered densely packed geographies with more complex economic, and social, communities that spawned both disruption and innovation potential; these forces of change moved off from our history’s front page into the back pages almost automatically and imperceptibly. Manor depopulation followed, anomic uprisings occurred, and incremental urbanization began.. The manor lords, despite the economic change created within their manors, still enclosed more pasture land, raising yet more sheep for use in wool manufacture and foodstuffs–until sheep outnumbered the English by three-to-one. This raised the question as to what to do with all this sheep wool and raw cloth made from it? Home (manor)-based manufacturing followed, and then powered by water, manufacturing on a larger scale by companies commenced, and, lo and behold, wool and cloth manufacturing clusters sprinkled throughout the kingdom.
Since agricultural manor-based labor proved expensive during and after the plague, manor lords were under pressure as well as they too had to find places to settle their sons and daughters in the English primogeniture-obsessed society. The kingdom’s social hierarchy became more complex as its aristocracy and its daughters-widows and gentlemen found their place in a elite hierarchy in some flux. The rise of the Tudors added to this as they clashed with the installed base of the aristocracy in their effort to centralize power in London’s court. The rise of the wool and cloth merchants only added to the mix, as a gentry elite took shape.
Some wool was homespun and lords sold it to merchants for more revenues. Manor lords also sold meat to domestic merchants. Increasingly, the end products typically fell into the hands of small manufacturers or companies of sheep-herders who either grew their business or sold it off to larger manufacturers, meat processers, and domestic merchants who distributed both as well as the wool and cloth products. Since lighter blends were likely to be exported to Iberia and Antwerp, export of such cloth became an opportunity to supplement the predominant sale of cloth domestically. Accordingly, manufacturers often concentrated near port cities, the most successful of which was the London metro area. By 1500 the English exported more finished cloth than raw wool to Antwerp principally. There was little import to England involved in this trade.
Over the centuries that followed one could see an English medievalism slowing evolving, but still profoundly medieval in character, values, and configuration. English medievalism was not motionless, static, or stagnant, but more in transition to an unknown future at some unknown later date. As long as enclosure continued to feed a revival of population from the Black Plague, the two drivers of change worked behind the scenes creating pressures and tensions that fostered new changes and drivers, of which the formation of a wool and cloth manufacturing cluster was, for me at least, the most important influence on the the design (joint stock corporation) which when combined with London’s mega city urbanization profoundly shaped the Company’s organizational politics and the process by which a royal public-private partnership came into being in 1605-6.
Wool manufacture was widespread. At least twenty-five counties developed flourishing, if small, wool/cloth production clusters. Scattered about England, wool and cloth manufacturers were accordingly able to easily source wool and attract workers from their regional manors. Those with an entrepreneurial bent were able to form companies thus jump-starting a serious manufacturing wool and cloth cluster that added to the local-regional elite whose wealth usually was plowed back to the company thereby in good times expanding production and employment. Wool/cloth manufacturing startups also led to a more mobile population who either moved from serf agriculture into cities to became a proletariat, or creating former serfs into land owning yeomen/artisans in regional economies.
In short, England increased its population mobility and during these centuries a measured urbanization followed. The exception to this as we shall later describe is London. Those serfs who were unable to successfully cope with displacement were transformed into economic refugees who eventually resettled in the budding urban areas or London where the opportunities seemed apparent. From this we will hear assertions of “surplus population”, and from others, usually more followers of a radical Protestant sect, who promoted a need for “Christian charity”. Success of this first wave English underclass was very uneven, with the result that more unsuccessful piled into neighborhoods or entry level wool cloth factories as proletariat.
Guilds, Towns and Cities Emerge from Enclosure and Develop–Cloth-making existed before the enclosure movement, and so it gained early access into the English guild system as it took form following the Conquest. Among the very first to achieve a guild charter, not only in London, but also in many regional centers as well, Unwin observes “… the weavers secured at an early date by the open grant of charter. Like the bakers they gained the privilege of farming their own taxes. But they secured it much earlier (before 1130) and continued to hold tit till Tudor times. The position of the weavers amongst London trades was in this respect unique, but in the 12th century there were gilds of weavers enjoying similar privileges at Lincoln, Oxford, York, Winchester, Huntington and Nottingham … [and] Winchester. While the inclusion of guilds added to the wool and cloth industry expansion and professionalization, it injected specialization in England’s emerging craft industries and that invited competition in recruitment, and encouraged companyies to around London or a port.
Economist B. E. Supple concluded these exports injected lifeblood into local economies, but London was the chief beneficiary. … perhaps as much as 90 per cent, and certainly over 75 per cent of England’s exports were of articles made from wool. No wonder to contemporaries it appeared ‘the cloth trade is … the axis of the commonwealth, whereon all the other trades … do seem to turn and have their revolution’, or that it could be called ‘the flower of the king’s crown’ …the milk and honey of our Canaan, the Indies of England. [p.6]. Naturally, the incremental increase in private land ownership meant a disruption of the medieval manor based class system, and the development of an landed (free holder) agricultural yeoman, along with increases in artisans, and merchants, also moving to more urban locations where they were more likely to prosper.
Over the years many of these prospered and infused development of a gentry proto-class that, by the time of the Virginia Company participated in East India and Virginia Company affairs as investors, advocates, shipowners and sea captains, merchants and staff and leadership for the guilds that developed. Manor lords and the regional aristocracy in turn took advantage of their opportunities, some drawn into overseas adventures, others into the military, and others to the court and Crown. Also, some along with gentry were attracted to English mining, and the extraction of materials such as ores, coal and copper.
Sparing the reader as to how guilds took form and expanded, a complicated and unfamilar set of institutions and processes that are not necesary for our task, we can more simply offer that municipal corporations (city governments), guilds, cloth and craft companies, manufacturers were a creature that arose from or along with the urbanization of England and its venture away from a rural agricultural economy. Proto-classes took form as time and the enclosure movement conducted the agrarian revolution previous, during and after the Black Plague onslaught. Artisans, yeomen, landowning gentry, merchants, an a wealthier “middling sort” evolved in good times and hard into the sixteenth cedntury. From craft companies evolved professional guilds which created a series of institutions for training/education, apprentice, manufacturing, shop-keeping, distribution and logistics. Spreading across the country, taking hold in the regional centers, and larger cities, especially London, guilds were a central unit of English manufacturing and trading that worked closely and overlapped with the development of local institutions of governance and economy.
Over the course of these centuries that predated the Norman Conquest until the ascent of the Tudors–a solidly medieval era if there ever were one, England also forged its urban and local governance (municipal corporations, counties); indeed, these institutions. i.e. guilds and urban corporations became inseparable, if tension prone, a trend which strengthened the economic autonomy of local areas and their governance from the Crown, and fostered the development of craft, manufacturing, and domestic commerce (merchants, distributers). This trend assumed increased importance with the Tudor dynasty sovereigns who pursued a policy of cooperation with local institutions and their gentry leadership, leading to a working alliance of the king and the local institutions in limiting the power of the large-landed aristocrats that previously had checked the sovereign and had played a considerable role in the War of Roses.
The cloth cluster prospered joining in the formation of its occupational guilds, a workforce entity that developed skillsets, limited competition, set pricing and labor costs for the larger denser communities that crossed the red line into urban areas. In so doing, the sectors blended into England’s larger guild movement by organized themselves into regional/occupational guilds. Overseas merchants, among others, routinely organized themselves into guilds and companies to maintain and control access to the special techniques and knowledge, or ‘mysteries’ of their trades. Many only later sought out royal grants to allow them further immunities of self-government, relief from certain taxes, and most importantly, unimpeded rights to travel from and reside beyond the realm … [99] Phillip J. Stern, Empire Incorporated, p. 10.
Since the one export wool and cloth economy that developed during this period is central to this module’s task and purposes it is necessary to understand how those guilds and companies performed and conducted themselves during the time of the post-1550 overseas commerce and colonization pivot. By 1500 many professional guilds faced pressures which limited their powers and influence over their local members and their local governments, and also inhibited any ability to effectively check the growing power and strength of the London guilds, and the City of London whose government was dominated by guild membership. During the late fifteenth century into the sixteenth a core of twelve London livery guilds evolved from from craft companies, their professional guilds, and merchants” associations.
Oligarchical in their organizational strucuture and leadership, these livery guilds were effectively closed to outsiders, and were profoundly focused to achieve greater profits for themselves. Since these livery groups were built around the existing one export wool and cloth craft companies and their guilds, it followed they were deeply invovled in the export of cloth and wool to Antwerp, and closely associated with the interests of the great merchant trading company, the Company of Merchant Adventurers. These cloth merchants of wealth, status and power used their access to court policy-making to seize royal advantages that strengthen their monopoly over the industry, its livery guilds and membership relevant to cloth and and wool export that was largely confined to export between two locations, London and Antwerp Holland from whence it flowed chiefly to Holland and northern continental Europe. More simply put, that one export economy fell under the influence and near-control of a London-based nexus that possessed a royal monopoly through the Company of Merchant Adventurers charter at the expense of those adventurers that wanted to develop and export products of other industries and sectors, and other cities and ports outside London also desiring the same. Thus by the time of the post 1550 overseas commerce pivot, wool and cloth companies, its London livery company, and the Company of Merchant Adventurers. indifferent to other exports and trade than wool and cloth through Antwerp and Holland, were of little help to those desiring to extend the scope of products and the geographies to be traded; while not oppositional to the expanded overseas commerce pivot, they left the former to their own devices, and forced them to find and employ their own sources of wealth and leadership to their desired ends.
So livery guilds led to more cohesive and skilled regional clusters. As the cluster matured, it tended to centralized into and around larger cloth/wool companies, which tended to grow best on the peripheries of newly densely populated or urban areas–a process that inherently favored London and its suburbs, and a few regional centers, particularly those with ports whose residents demanded wool and cloth products for their use and benefit. “At home, as trade flourished, so industry expanded. Protestant refugees from the Continent itroduced lace-making, silk weaving, engraving,needle-and-thread-making and other skills into England whilst the wool and cloth industry continued to thrive and bring prosperity to an ever-widening area”. The development of guilds in this time also created a supplemental-alternative path to individual prosperity through skills training.
The Statute of Apprentices of 1563, by making long indentures mandatory, helped to bring stability to industry and farming. Yet commercial success had its debit side. The pursuit of wealth and the frantic race to acquire land and power meant that most people cared only for their own interests, and not for the public good, or the needs of those weaker than themselves. It was a greedy and avaricious age, corrupt in many ways. The court was seen as a magnet for grasping scavangers and there were many who managed to suborn the laws with bribery … The rich lived well. …Although Sir Walter Raleigh is widely credited with introducing tobac co into England from America, it was probably John Hawkins who first imported the weed in 1566. By the 1590’s pipe-smoking was a common, if costly habit–tobacco cost three shillings an ounce. Everybody, it seemed, was using it–princes, courtiers, noble ladies, soldiers and sailors. [99] Alison Weir, the Life of Elizabeth I (Ballantine Books, 1998), p. 9
Occurring in two expansionary bursts, between the 1480’s and 1510, and the 1530’s to 1550, cloth export by the first decade of the seventeenth century (1600-1610) had evolved into three quarters of England’s total exports, of which three quarters went to the Low Countries and Baltic GermanyBy the time it incorporated, Brenner estimated, the guild-like joint stock Company of Merchant Adventurers controlled one half of London’s total export trade, and asserted “constituted England’s outstanding commercial group by any test of wealth or power, and that its leading members enjoyed a disproportionate share of London’s highest political positions” [99] Brenner, p. 3.
Propensity to concentrate cloth manufacturing and export on the eastern side, along the English channel, around London was pronounced, and it transformed the Company of Adventurers into a London-based industry nexus, Accordingly Outer Port ‘Merchant adventurers’ who risked themselves and their money to find new commercial markets in Europe … emerged in the fifteenth and sixteenth centuries in commercial cities across England. Exeter had one, as did Newcastle, Hull, Chester and York. Bristol’s Merchant Ventures which dated back centuries, had recently received its first charter of in corporation from King Edward VII in 1552 [99] Phillip J. Stern, Empire Incorporated, p. 10 Effectively shut out out of cloth export they looked in other directions for opportunity.
With the royal charter they secured a royal grant of monopoly to a specified geography (Antwerp) that limited competition, reduced risk, and provided legitimacy to the traders in their relationships abroad. Being the first of guilds-exporters, the pattern was set for all that followed. The all-important take away was that a guild monopoly over a trade was then infused with a second monopoly to trade that product in a defined geography. This model became preconditions for future overseas trading ventures. Thus these devolved from the Company of Merchant Adventurers before the sixteenth century.
Cloth industry became more concentrated as it matured, raising the cost of entry so over a few generations only a few merchant owners dominated overseas wool export, and the Company of Merchant Associates-Adventurers (see below) that held the royal export monopoly developed into an oligopoly of its own. There was little trickle down from the cloth export and the exclusionary membership policy by the Company meant a very large percentage of English merchants were shut out from cloth and export, and left to their own devices.
During the sixteenth century that followed after its incorporation, Company of Merchant Adventurers took steps to limit access of “mere merchants” into its membership, casting out retailers, wholesalers, finance and other merchant groups. Keeping these elements from being able to export, at least easily, profitably and at a scale, the were able with their geographic and industry monopolies marginalized other rivals, frustrated opportunities not to their benefit, while further accumulating the wealth derived from export of England’s sole export industry–thus limited export only to cloth/wool/textiles. Simultaneously, the Company of Merchant Adventurers turned their own corporate leadership into small, narrow near-perpetual oligarchy that founded member family dynasties that effectively closed the door for the rising gentry class that could not achieve membership in the Company.
the salience of the Company of Merchant Adventurers joint stock corporation How did the London London wool and cloth/sheepherder merchants gain a head start and were able to restrict their membership to the advantage of the few members? The answer lies in the particular business structure of the Company of Merchant Adventurers: England’s first major joint stock corporation. Blending a guild-like cloth industry membership with a royal monopoly into a structure with exclusive export across the English Channel to the continent, the new corporation was, almost by definition, the first English proto-type joint stock corporation relevant to English overseas trade. The Company received its first charter in 1407; obtained its breakthrough charter from Henry VII in 1496 and 1505, and Elizabeth’s 1564 charter transformed Company’s membership into a patriarchy of families that created a lock on the Company’s “board of directors” and committee leadership that could be passed on to their successor-first born.
With restricted membership allowed to the Company by Elizabeth, the Company’s governance, now self-perpetuating, meant the leadership held control over the non Board Company shareholders. The upper levels of the Corporation held virtually a monopoly not just in continental wool export, but also the Company itself. Inheritance of this membership became the entry for future leaders, and rendered the Company structure a closed oligarchy dedicated to continental trade of English cloth. From that point on the London-based leadership of the Corporation incrementally placed restriction on cloth merchant in the outer ports and cities, as well as factors in he continental ports of trade which effectively shut them out of .the cloth overseas trade. While Elizabeth moderated this in the course of her reign, it did not alter a core resistance of the Company governance to entry by non-London merchants.
In alliance with the Crown in policies concerning commercial trade, and aligned with English Crown vs. Parliamentary politics, the Merchant Adventurers proceeded to dominate the political governance institutions of the City of London, placing the latter within the King’s orbit, by securing the election of its members to important positions of power during much of the pre-English Civil War period. That meant great power and influence of London merchant adventurers associated with the corporation amassed great influence over the governance of the City of London, and the investment and finance activities of the capital city of England during the century in alliance with Elizabeth.
Headquartered in London and Antwerp, the Company of Merchant Adventurers elites were in a potentially influential and strategic position from which they could assume a commanding role in England’s overseas trade and commerce. They chose to do so, but for the most part limited their activity to protecting and enhancing their Company access to northern Europe through Antwerp and to confine themselves to cloth-wool apparel related products for export. They were not interested in imports, save to commodities of use to cloth and wool industry/guilds. In that cloth and wool constituted three quarters of all English exports in this period, their use of London as their principal English port secured for them status and a level of protection as they set up foreign contacts, relations, and trade abroad–which over time evolved into becoming the “establishment” of English foreign trade. [99] Robert Ashton, the City and the Court, pp. 23-4 The Company of Merchant Adventurers also left those interested in other commercial trading to their own devices and lobbying. While they did not oppose such ventures head on, the Company’s dominance over overseas policy felt the pressure of their deadweight on the policy process.
The net effect, intended or not, was that a small, powerful oligarchy of London merchant adventurer families, for all practical purposes, marginalized overseas trade by non-member merchant adventurers. The exclusive monopoly of the wool-cloth Merchant Adventurers Company on wool export to the Continent meant it constrained access of others to London’s access to Europe’s wealth and blocked English entrepreneurs access to the Orient and East Indies. The simple take away is London was where the action was. The Company marginalized entrepreneurs and aspiring gentry from areas other than London who were stymied by London’s size and concentration of power and institutions. Unwilling to abandon their place of origin they pursued their adventures from their homelands and dealt with London’s power as their needs required. This, of course, intensified their frustration and it also fragmented the focus of their trade and render their business plans and overseas missions more complex and multifaceted. Perhaps most of all it allowed the entrepreneurs more leeway to take advantage of the more profitable, if risky, war-raiding and privateering.
The narrowness of interests within the Company followed from its lack of inclusiveness within the wool and cloth sector and the closed organizational structure of the Company secured by royal charter continued into the 1560’s. The latter is due, as Brenner’s asserts, that these wool-export minded London merchants “more tightly controlled conditions under which the cloth export commerce was pursued–and specifically the Merchant Adventurers success precisely from the 1550’s and 1560’s in getting the government to increase their privileges considerably. Indeed, in view of the relatively favorable conditions that actually prevailed for London denizen merchants in the traditional cloth trade with northern Europe from the late1550’s to the early 1600’s it is not easy to see why they would have felt the need to seek alternatives farther afield. [99] Robert Brenner, Merchants and Revolution, pp. 10-11.
By the early, 1500’s. these cloth/wool companies had located around England’s key port cities, most of all London whose cloth/wool cluster dominated not only the metro economic base, but extended its organizational tentacles into the country’s wool-cloth cluster as well. The cluster’s ebbs and flows injected volatility in prosperity/recession and disrupted the kingdom’s workforce that triggered relocation of the workforce not to ignore disturbing anomic riots such as “Evil May Day of1517” when thousands of City residents rose up against foreign workers and residents, pillaging the homes of the foreigners, and hanging a number who they felt were stealing bread crusts from their mouths and jobs from their families. Lack of a social safety net meant the unequal distribution of wealth produced horrible living conditions, horrific housing, and and desperation in the underclass.
The realization by many elites that badly distributed prosperity and an economy that could not produce sufficient number of jobs, because it rested on one industrial sector called attention to the lack of products other than cloth and wool which importation could introduce into the English economy increasingly called into question the previously dominant economic strategy of import substitution suggesting strongly it was counter productive. It was also increasingly clear the traditional English economy could not meet demands from a competitive mercantilist Europe, prone to war and colonial empires.
By the 1550’s, actually earlier, the Company essentially ran the one-horse export economy that England enjoyed. As such it developed into a bastion of wealth for its members, this wealth was put to use in a number of investments and opportunities. The take away from these observations is the English cloth export evolved into an foreign trade dead end. It stopped with cloth and wool export only, with little to no import. What import to England existed was on the initiative of other nations for the most part. The wealth generated from this one-export no import commercial trade brought about by the first great trading company, the Company of Adventurers, held by a small group of family dynasties who dominated the Company of Adventurers and its transactions, and who passed on their position through primogeniture inheritance.
Cloth export, primarily a one way export only concentrated in ports such as Antwerp, the primary entrance point, and over time a European agent-factor nexus developed that allowed London and eastern-sited cloth merchants to develop and sustain an advantage in cloth trade that other English regions could not penetrate. English cloths came to be shipped almost exclusively to Antwerp, and from there to their ultimate destinations in various parts of Europe” [99] Robert Brenner, Merchants and Revolution: Commercial Change, Political Conflict and London’s Overseas Traders, 1550-1653 (Verso, 2003), p. 6.
During the fifteenth century, the focus of the Company of Adventurers was abroad; that’s where its offices were and the continent and its ups and downs, conflicts and opportunities, captured the interest of these merchant adventurers. Despite impressive increases in iron and coal production, textiles remained both England’s leading industry and the only one that sent much output to foreign markts; as in the sixteenth century so in the 1640’s textiles comprise 80 per cent or more of exports. … Up to the 1550’s nearly all English cloth comprised traditional broadcloth and kersey, a lighter and cheaper versio, finished in Antwerp and re-exported to northern and east Elbian Europe. But this relationship was unsettled by commercial and political disputers, even before the Dutch Revolt, which essentially destroyed it … But the long-term trend of such old drapery exports was unmistakably downward, as fashions changed, the Thirty Years War disrupted traditional markets, and Dutch Prussian, and Silesian fabrics put up stiff competition. [99] Robert S. Duplessis, Transitions to Capitalism in Early Modern Europe: Economies in the Era of Early Globalization, c. 1450-c. 1820, 2nd Ed (Cambridge University Press, 2019(, p. 154
Innovation and entrepreneurship were suppressed and restricted to a very few elites that had successfully accessed their corporate oligarchy in guilds, which itself than seized ahold of City/town governance, and accessed national policy-making through their use of structures like the guilds, obtaining local or royal offices, acquiring concessions, and, in overseas trade, incorporating joint stock great merchant trading companies with monopolist trade charters from the Crown. The system that emerged exhibited an overpowering tendency to create a network of internal oligarchies within each corporate and public structure involved in both policy and in its implementation. Mired deep within the still traditional and aristocratic elite social structure saturated with inequality that dominated most every feature of the English Tudor policy system, England by 1550 needed and wanted to compete, produce and grow, but simply could not easily rise above its clogged policy system to achieve some sort of economic break out,.
Closed policy-elite stagnation ensued and the issue of the time was how to break into the policy process and access effectively the decision-makers that allowed for change. Taking advantage of this opportunity, the Crown was able to siphon off what it viewed as its share of the profits generated to support its priorities and lifestyle, Through its definition of partnership, its monopolistic charters regulated but also defined and legitimized the policy making and implementation of those it chose to support. Robert Ashton in some frustration is forced conceded that the process, lacking a strong Parliament in particular, “ an impecunious government can perhaps hardly be blamed if it also saw in the licensing system a means whereby it might kill the economic and fiscal birds with the same stone” [99] Robert Ashton, the City and the Court, 1603-1643 (Cambridge University Press, 1979), p. 18
Some merchants, however decided that opportunity lie in expanding overseas trade to the four corners of the globe, particularly the Far East and the East Indies. And so in the middle 1550’s England started its oversea commercial trade pivot. With the power emanating from their privileged monopolies London-based cloth merchants pleaded their case to the central royal government in residence at London. At the point when growth in the cloth trade stagnated during the decade of the 1550’s the impulse of those desiring to trade in untouched markets directly affected the course of overseas trade and foreign commerce. New Adventurers were drawn to action. While not abandoning their memberships or relations with the powerful Merchant Adventurers, they copied her structure and centralized, hierarchical leadership derived from the Company of Merchant Adventurers and incorporated the first of the major “regulated” joint stock trading companies to be formed during this the second half of the sixteenth century.
While the Company of Merchant Adventurers, which still included by far the greatest number of the City’s wealthiest merchants provided relatively little investment support “to the network of new, growing and dynamic overseas trading companies, “becoming even more obsessively focused on their short-route cloth trade with northern Europe” [99] Robert Brenner, Merchants and Revolution: Commercial Change, Political Conflict and London’s Overseas Traders, 1550-1653 (Verso, 2003), pp. 21-3. While the Merchant Adventurers trade was thus an increasingly unitary one [cloth export to northern Europe], and separated from the others [expanded goods and import into new markets] the southern and eastern trades [the latter] experienced an increasingly intertwined growth, motivated by the same interlocking group of merchants with common commercial goals” [99] Robert Brenner, Merchants and Revolution: Commercial Change, Political Conflict and London’s Overseas Traders, 1550-1653 (Verso, 2003), pp. 15-17.
In essence a new group of trading merchants had spun off from the Merchant Adventurers [the Muscovy or Russia Company], and the latter pushed into trading with the Spanish, Portugal, Italy, and Turkey–forming the Levant Company in 1592. Our soon to be friend, Sir Thomas Smythe was a major leader in the latter set of trading companies.
In many ways, especially social, the Company elites transformed London into a Company town, Company members and officeholders transformed their elites into an English elite quite different from the dominant landed agricultural-manor-based aristocracy; the Company was a merchant elite, an urban commercial one that concentrated in the mega city that London had become. Having said that, however, company elites often chose to involve themselves in London politics and to secure elective office, alderman, and the Lord Mayor. Their primary interest, aside from securing what benefit they could from London politics, was to access and cement an alliance with the Crown and the Sovereign. Their wealth made loans to the state possible, and their experience offered advice and middlemen for the sovereign to supplement his initiatives and priorities abroad.
As a prominent and affluent element in London’s governance of the capital city they could offer considerable resources and advantage to the cash-starved monarchy. In the Tudor period they gained access to court politics and acquired the sovereign’s favor at least to the extent the Queen saw them as a useful ally in domestic finance and foreign affairs, an ally that brought stability and critical resources. With London England’s mega city and the Crown as allies the Company’s members and core oligarchy became as close to the commercial established as England possessed at that time.
Their narrow view of such trade, however, was not encouraging or facilitative for a more expanded notion of overseas trade, and, as we shall see made London somewhat more vulnerable to political instability particularly when the cloth/wool trade was in some difficulty or in lean years when exports declined due to war or market issues. In such times when the gilds and cloth/wool companies reduced their workforce or were not hiring workers the economic refugees from the countryside looking for employment easily visible groupings of restive and sometimes volatile underclass raised anxiety of more affluent and secure Londoners, as their neighborhoods and substandard housing could not easily be ignored or bypassed.
While not reaching the point of opposition to the Company of Merchants of the establishment of this era, they saw potential in copying the Company of Merchant Adventurers methods and organizations. When an opportunity opened up in the 1550’s the more adventurous, under the leadership of John Cabot’s son, Samuel broke the ice by creating a new merchant trading company (Muscovy) around a new trading elite that sought opportunities, mostly in China and Japan, following the Portuguese and Spanish leads.
The 1550 pivot seemingly threatened to be a pivot in overseas trade away from the Company of Adventurers, but was not regarded so in that period. It was more a wave of interest in overseas trade that was perceived as an economic opportunity that should be seized. Led by a generational change in English entrepreneurs, and sons of the establishment that were willing to carpe diem. Since they did not threaten the interests of the establishment, but indeed offered them prospects that stabilized England’s tensions and offered prosperity to the rising population and growing urban centers.
As London became king of the wool export trade, it compelled England’s outer ports to devise their own path. England’s post 1550’s overseas pivot followed a bimodal development pattern: London and the Outer Ports. The rivalry and bitter competition played a notable role in England’s invasion of Ireland, and global discovery and exploration. London’s approach to overseas trade, the trading factory, and the great merchant trading companies differed radically from that used in the Outer Ports. We will discuss that in more detail below.
Equally, important, London’s organizational vehicle, the joint stock Company of Merchant Adventurers became the model, the corporate form that dominated England’s overseas trade and commerce, and colonization. In that the Tudor’s, for reasons to be soon discussed, delegated much of overseas commercial trade to private corporations the joint stock corporation’s strength, the ability to attract private investors in a manner that transcending individual companies and wealthy merchants it proved to most in that time period as the most promising corporate structure suitable to the task.
That form of business organization demonstrated an ability to achieve dominance over the domestic cloth industry. Its entry into partnership with the sovereign and the English state in its overseas export venture was made possible by a sovereign grant of monopoly to that corporation in the industry export to northern Europe. To the merchants on the inside, however, its attractiveness included a flexibility in its governance structures that centralized corporate authority into a few largest investors of the corporation–offering to them security in an investment most risky.
What made the joint stock merchant trading company seemingly effective in their view was it oligarchic and restricted membership created wealth that could be reinvested in more expeditions and trade. By the late 1500’s the joint stock corporation, not unlike a Russian doll, proved amenable to superimposing a hierarchy of internal oligarchies, that centralized its governance in a few, very few investor who were converted in to a corporate governance by family dynasties. Later on, we shall focus on this issue, but for now the change in joint stock governance over the last half century came at the increasingly noted expense of fostering jealously and frustration of those who wanted in on this opportunity.
The point of controversy was on their “monopoly” which closed their access and prevented others from participating and sharing in its wealth creation. Their perception was they lacked the political and policy making power to do so. The point of this is the dominant corporate structure of English overseas trade and commerce, had entered into the seventeenth century with what proved to be a fundamental flaw–a flaw so serious the structure would be unable to enter effectively into the new policy area du jour: colonization.
How the partnership with the state and sovereign was affected by the union of the joint stock corporation and the royal monopoly and grants or, the crown, privilege. Unable to form their own great merchant trading company, the Outer Ports turned to privateering, the development of Irish plantations, and after the 1580’s, leadership in the discovery and navigation of North America and the West Indies.
3. Unbalanced Urbanization: London as a Mega City, Marginalization of Outer Ports
London in 1500 had about 50,000 residents. Estimates of its 1400 population, the low point in the Plague era, were about 40,000-50,000, down from an estimated 1300 population between 80,000 and 100,000. By 1550 estimates indicated London grew dramatically after 1500 (a range of 60 to 120%): 80,000 to 120,000. In 1600 London’s population doubled to 200,000, and it doubled again to 400,000 by 1650. From 50,000 in 1500 to 200,000 by 1600 means a 400% increase over the century discussed in this module. London’s population growth did not stop; in 1700 it increased to about 500,000, and in 1750, 700,000. The 1801 census recorded over one million. Whether or not these are ballpark figures, this is a serious increase in population–which in its early years was as unsettling as comforting.
[999] Alan Taylor cites that “During the sixteenth and early seventeenth the rural people suffered increasing displacement and unemployment as their aristocratic landlords adopted a program known as enclosure …. Probably about half the rural peasantry lost their lands between 1530 and 1630. … The new poor gravitated from the rural villages to the market towns and seaport cities, especially London, which grew from 120,000 people in 1550 to 200,000 in 1600, and 375,000 in 1650. A sprawling and frightening metropolis, London became notorious for filth, poverty, plagues, fires, crime, and executions. A city of extremes, London also hosted in expanding commerce manifest on the riverside docks, as well as displays of aristocratic splendor and power at the royal court. The growing numbers of unemployed and underemployed reduced the wages of that employers had to pay. The growing population also bid up the costs of food and housing, depressing the already bleak living conditions of the poor (pp. 121-2 [999]
This explosion was not matched by any other English city. For all practical purposes population growth excluding London were minimal. In England it seemed all roads led to London. How did this compare to other European mercantile capital cities? Paris, Europe’s largest city of the time, had about 150,000 to 250,000 residents in 1500; it is estimated to have grown to 275 to 350,000 by 1600. France, however, was much larger than England: estimated to be 14 to 16 million in 1500, and18 to 20 million by 1660. England, on the other hand, estimated at 4 to 5 million in 1500, and 4 to 5 million in 1660. Despite Paris’s initial lead,\
London’s growth rate, probably tripled to quadrupled its population from 1500 to 1600, and England’s non-London population essentially stagnant. I am reluctant to push these AI estimates beyond the obvious; London clearly became England’s dominant population center. This incredible London growth, given England’s rather static growth, supports our belief that England’s initial population explosion translated into a London explosion that turned it into a rapid growing “mega city”.
There are several reasons London did so well relative to the other regional centers of the country; one important driver was the growth of its wool and cloth cluster, which by 1500 was already exporting to northern Europe. If one wanted a job in England, London’s only major national manufacturing cluster was all she had to offer. Unfortunately, the cluster was pockmarked by its ebbs and flows in sales and employment and simply was not able to handle population growth of this magnitude. Such consistent rapid growth had its fair share of negative consequences.
Excepting the export of English raw cloth and wool to northern Europe, English overseas trade and import was underdeveloped when the global overseas pivot commenced in the 1500’s. English elites recognized that overseas trade and commerce was the best and most effective strategy to grow the economy and provide prosperity and innovation that would create jobs for an increasing population. To understand the dynamics of change in play, I briefly describe several English demographic and policy-relevant factors that played observable roles in the Virginia Company advocacy and design. By no means comprehensive or inclusive of the period, my presentation stresses relevant aspects of each as they affected the design, incorporation, and implementation of the Virginia Company and its mission to colonize North America. With little to no thought given to the change in its mission, to establish North American colonies, the changes which today we might call “the democratization of capital for overseas investment”, a new investor base was deemed eligible to purchase ownership shares in the Company
London developed into England’s most visible example of her vastly unequal distribution of wealth, i.e. inequality. It seems that, sooner or later, England’s manor refugees wound up in London, creating large concentrations of poor and the underclass. Obviously, as England’s capital city, London and its suburbs were home base for English elites, London’s concentrated underclass was hard for them to ignore. The impression upper English elites took away was their understandable fear that underclass volatility that constituted a threat both to their safety and England’s stability; associated with that was the perceived link with crime. None of this was lost on English royalty of the period: from Henry VIII to Queen Elizabeth I and then the new Stuart King James I all it took to realize these threats was a ride through their capital city.
Periodic anomic events sprinkled through the sixteenth century serving as a consistent reminder that England was truly in a period of transition, and unless its economy could finance a path out for these distressed areas and their residents, with jobs for instance, and unless that economy could satisfy increasing consumption and housing needs, there was trouble ahead. More to the point, public safety meant job creation and quality of life. A quick review of London’s riots reveal that four major London-based mass anomic riots occurred during the sixteenth century: the Evil May Day of 1517 (which we will shortly use as an example), a series of smaller anti foreigner “they are stealing our jobs and taking bread from our mouths” riots and murders that constantly occurred from 1560 until the Apprentice riots of the 1590’s, and the 1592 Southwark riot. We could also mention the 1601 Essex coup which generated anomic London reaction that directly threaten Elizabeth. Job creation or the availability of jobs struck visible interest from London’s residents as well as from its elites.
London’s condition provided motivation for English elites that economic growth should receive high priority and that their interest in finding relief from England’s social disruption was therefore timely. From our policy-making perspective this visible day-to-day witnessing of the social change explains a great deal why Crown policy elites, and parliamentarians coming to London placed economic development high on their agenda, and magnified the inequities, inefficiency, and perceived corruption of the Tudor policy system. The East India and Virginia Companies were a prime beneficiary of this timely economic development background crisis.
As always, employment was the preferred solution. The ebbs and flows of England’s only major economic manufacturing cluster, wool and cloth, was the City’s chief employer. By 1550 it was obvious that it alone could not provided consistent and sufficient jobs and this meant economic development, job creation by developing new sectoral clusters led to the equally obvious need to make products to satisfy domestic consumption and employment, while exporting those which enjoyed overseas market success. Overseas trade and commerce as a job generator, and the best candidate to raise the poor’s standard of living, and also to satisfying consumer demand or a growing population. If Americans in particular are looking for core motivation for their colonization and for the Virginia Company, these are the key underlying needs hoped for–not simple profits for its investors.
Only London could be ranked with the great continental cities. Its growth had outstripped even the doubling of [England’s] population. By the beginning of the seventeenth century [1600] it contained more than a quarter of a million people, and by the end nearly a half million, most of them poor migrants who had flocked to the capital in search of work or charity. London was the center of government, overseas trade and finance, and of fashion, taste and culture. It was ruled by a merchant oligarchy whose wealth increased tremendously over the course of the century as international trade expanded ….
Outside of London, however, the story was quite different. English 1600’s non-London urban demography consisted of “About 800 small market towns of several hundred inhabitants … and in contrast to most of Western Europe, there were few large urban areas. Norwich and Bristol were the biggest provincial cities with populations around 15,000. Exeter, York, and Newcastle were important regional centers though they each had populations about 10,000 inhabitants. [England] … was predominantly rural, with as much as 85% of its people living on the lands [99] https://www.britannica.com/place/United-Kingdom/The-early-Stuarts-and-the-Commonwealth
The One Export: Cloth and Wool Cluster-Industry Clogs Up the English Overseas Policy Process, Narrows Scope and the Participants
Wool manufacture was widespread in early years of the enclosure movement. At least twenty-five counties developed flourishing, if small, wool/cloth production clusters. Scattered about England, wool and cloth manufacturers were accordingly able to easily source wool and attract workers from their regional manors. The early market was primarily domestic and regional. Those with an entrepreneurial bent formed companies thus jump-starting a serious manufacturing wool and cloth cluster that added to the local-regional elite whose wealth usually was plowed back to the company when possible. In good times production expanded, along with jobs; the reverse occurred in bad times.
Some wool was homespun, serf, freeman and lords sold their produce to merchants for more revenues for their purposes. Manor lords also sold meat to domestic merchants. Increasingly, the end products typically fell into the hands of small manufacturers (companies) of sheep-herders who either grew their business or sold it off to larger manufacturers. Meat processers, and domestic merchants distributed both as well as the wool and cloth products. Since lighter blends were likely to be exported to Iberia and Antwerp, export of such cloth became an opportunity to supplement their domestic sale of cloth/wool. Once export was possible, manufacturers concentrated near port cities, the most successful of which was the London metro area. By 1500 the English exported more finished cloth than raw wool to Antwerp principally. There was little import to England involved in this trade and that was true through the post 1550 pivot.
Wool/cloth manufacturing startups also led to a mobile population who either moved from serf agriculture into cities to became a manufacturing proletariat or whatever occupation they sought and could obtain. As England increased its population mobility a measured incremental urbanization followed, with the exception being London (metro area). London became the default end-of-the-line residence for those who were unable to find employment because in good times that’s where the jobs were—and in bad, former workers were added to those seeking jobs. Former serfs, unable to successfully cope with enclosure displacement, were transformed into economic refugees who eventually resettled in London where the wool and cloth export was increasingly concentrated and hope was also eternal.
This wool-cloth one-export economy was unstable, regularly depressed because of the never-ending series of wars and political conflict between the various European powers. The Dutch revolution against Spain, for example, continually undercut the English export to Antwerp and northern Europe. Given this chronic instability of the one export economy, London developed a more or less permanent grouping of unemployed and desperate “underclass” that grew which each passing year, and was dubbed by many contemporaries as the “surplus population”. Not a insignicant number more contemporary commentators have found use of this term unsettling; but in the days of the overseas pivot, the dynamics of settlement by economic refugees in an expanding English economy was not understood as most contemporary population studies lay in the future.
Of note, manor lords, typically profited by the enclosure economic change created within their manors, so more pasture land was desirable, to raising yet more sheep for use in wool manufacture and foodstuffs–until sheep outnumbered the English by three-to-one. This raised the question as to what to do with all this sheep wool and raw cloth made from it? Home (manor)-based manufacturing followed, and then powered by water, manufacturing on a larger scale by companies commenced, and, lo and behold, wool and cloth manufacturing clusters sprinkled throughout the kingdom. As Joan Thirst has proven, the innovations and the reforms made in its use net-net increased productivity, expanding both agricultural products and the wool and cloth manufacturer.
Every region proceeded at its own pace of change. That pace was determined by the natural agricultural attributes of each area, and the current possibilities of improvement. It depended n the existing allocation of land between the classes, and the size and structure of the labour force. Most of all, itresponded to the economic opportunities afforded by the markets, and by the transport facilities than available to reach those markets. The sum total of the varied regional improvements carried through after 1500, enabled farmers to feed about 3 million more people in 1700 than in 1540, and almost 20 million more in 1880 than in 1750. [99] Joan Thirsk, England’s Agricultural Regions and Agrarian History, 1500-1750 (the Economic History Society, Macmillan Education LTD, 1987), p. 61
generated prosperous and concentrated set of dynastic families engaged in cloth and wool manufacturing, a manufacturing that served the region’s domestic economy and was tied to export their wares to Antwerp and northern Europe.. But cloth and wool export, even if dominated by London metro, did allow The chief exception to this being those areas that retained their traditonal small cloth and wool companies, usually tied to service their surrounding countryside.
Guilds, Towns and Cities Emerge from Enclosure and Develop–Cloth-making existed ages and eons before the enclosure movement, and it gained early access into the English guild system as it took form following the Conquest. Among the very first to achieve a guild charter, not only in London, but also in many regional centers as well, Unwin observes “… the weavers secured at an early date by the open grant of charter. Like the bakers they gained the privilege of farming their own taxes. But they secured it much earlier (before 1130) and continued to hold tit till Tudor times. The position of the weavers amongst London trades was in this respect unique, but in the 12th century there were gilds of weavers enjoying similar privileges at Lincoln, Oxford, York, Winchester, Huntington and Nottingham … [and] Winchester. While the inclusion of guilds added to the wool and cloth industry expansion and professionalization, it also injected specialization in England’s emerging craft industries and that invited competition in recruitment, and supplemented the effects of the Company’s concentration.
Economist B. E. Supple concluded these exports injected lifeblood into local economies, but London was the chief beneficiary. … perhaps as much as 90 per cent, and certainly over 75 per cent of England’s exports were of articles made from wool. No wonder to contemporaries it appeared ‘the cloth trade is … the axis of the commonwealth, whereon all the other trades … do seem to turn and have their revolution’, or that it could be called ‘the flower of the king’s crown’ …the milk and honey of our Canaan, the Indies of England. [p.6]. Naturally, the incremental increase in private land ownership meant a disruption of the medieval manor based class system, and the development of an landed (free holder) agricultural yeoman, along with increases in artisans, and merchants, also moving to more urban locations where they were more likely to prosper.
Occurring in two expansionary bursts, the 1480’s and 1510, and the 1530’s to 1550, cloth export by the first decade of the seventeenth century (1600-1610) were three quarters of England’s total exports, of which three quarters went to Germany and the Low Countries. Brenner estimated the guild-like Company of Merchant Adventurers controlled one half of London’s total export trade, and asserted that the Company of Merchant Adventurers “constituted England’s outstanding commercial group by any test of wealth or power, and that its leading members enjoyed a disproportionate share of London’s highest political positions” [99] Brenner, p. 3.
Over the years many of these prospered and infused development of a gentry proto-class that, by the time of the Virginia Company participated in East India and Virginia Company affairs as investors, advocates, shipowners and sea captains, merchants and staff and leadership for the guilds that developed. Manor lords and the regional aristocracy in turn took advantage of their opportunities, some drawn into overseas adventures, others into the military, and others to the court and Crown. Also, some along with gentry were attracted to English mining, and the extraction of materials such as ores, coal and copper.
The cloth cluster prospered joining in the formation of its occupational guilds, a workforce entity that developed skillsets, limited competition, set pricing and labor costs for the larger denser communities that crossed the red line into urban areas. In so doing, the sectors blended into England’s larger guild movement by organized themselves into regional/occupational guilds. Overseas merchants, among others, routinely organized themselves into guilds and companies to maintain and control access to the special techniques and knowledge, or ‘mysteries’ of their trades. Many only later sought out royal grants to allow them further immunities of self-government, relief from certain taxes, and most importantly, unimpeded rights to travel from and reside beyond the realm … [99] Phillip J. Stern, Empire Incorporated, p. 10.
Guilds led to more cohesive and skilled regional clusters , that as the cluster matured, it tended to centralized into and around larger businesses, which tended to grow best on the peripheries of newly densely populated or urban areas–a process that inherently favored London and its suburbs, and a few regional centers, particularly those with ports whose residents demanded wool and cloth products for their use and benefit. The development of guilds in this time also created a supplemental-alternative path to individual prosperity through skills training. “The Statute of Apprentices of 1563, by making long indentures mandatory, helped to bring stability to industry and farming. Yet commercial success had its debit side. The pursuit of wealth and the frantic race to acquire land and power meant that most people cared only for their own interests, and not for the public good, or the needs of those weaker than themselves. It was a greedy and avaricious age, corrupt in many ways … The rich lived well [99] Alison Weir, the Life of Elizabeth I (Ballantine Books, 1998), p. 9
the salience of the Company of Merchant Adventurers joint stock corporation During the sixteenth century that followed after its incorporation, Company of Merchant Adventurers took steps to limit access of “mere merchants” into its membership, casting out retailers, wholesalers, finance and other merchant groups. Keeping these elements from being able to export, at least easily, profitably and at a scale, the were able with their geographic and industry monopolies marginalized other rivals, frustrated opportunities not to their benefit, while further accumulating the wealth derived from export of England’s sole export industry–thus limited export only to cloth/wool/textiles. Simultaneously, the Company of Merchant Adventurers turned their own corporate leadership into small, narrow near-perpetual oligarchy that founded member family dynasties that effectively closed the door for the rising gentry class that could not achieve membership in the Company.
With the royal charter they secured a royal grant of monopoly to a specified geography (Antwerp) that limited competition, reduced risk, and provided legitimacy to the traders in their relationships abroad. Being the first of guilds-exporters, the pattern was set for all that followed. The all-important take away was that a guild monopoly over a trade was then infused with a second monopoly to trade that product in a defined geography. This model became preconditions for future overseas trading ventures. Thus these devolved from the Company of Merchant Adventurers before the sixteenth century.
Cloth industry became more concentrated as it matured, raising the cost of entry so over a few generations only a few merchant owners dominated overseas wool export, and the Company of Merchant Associates-Adventurers (see below) that held the royal export monopoly developed into an oligopoly of its own. There was little trickle down from the cloth export and the exclusionary membership policy by the Company meant a very large percentage of English merchants were shut out from cloth and export, and left to their own devices.
Propensity to concentrate cloth manufacturing and export on the eastern side, along the English channel, around London was pronounced, and it transformed the Company of Adventurers into a London-based industry nexus, Accordingly Outer Port ‘Merchant adventurers’ who risked themselves and their money to find new commercial markets in Europe … emerged in the fifteenth and sixteenth centuries in commercial cities across England. Exeter had one, as did Newcastle, Hull, Chester and York. Bristol’s Merchant Ventures which dated back centuries, had recently received its first charter of in corporation from King Edward VII in 1552 [99] Phillip J. Stern, Empire Incorporated, p. 10 Effectively shut out out of cloth export they looked in other directions for opportunity.
How did the London London wool and cloth/sheepherder merchants gain a head start and were able to restrict their membership to the advantage of the few members? The answer lies in the particular business structure of the Company of Merchant Adventurers: England’s first major joint stock corporation. Blending a guild-like cloth industry membership with a royal monopoly into a structure with exclusive export across the English Channel to the continent, the new corporation was, almost by definition, the first English proto-type joint stock corporation relevant to English overseas trade. The Company received its first charter in 1407; obtained its breakthrough charter from Henry VII in 1496 and 1505, and Elizabeth’s 1564 charter transformed Company’s membership into a patriarchy of families that created a lock on the Company’s “board of directors” and committee leadership that could be passed on to their successor-first born.
With restricted membership allowed to the Company by Elizabeth, the Company’s governance, now self-perpetuating, meant the leadership held control over the non Board Company shareholders. The upper levels of the Corporation held virtually a monopoly not just in continental wool export, but also the Company itself. Inheritance of this membership became the entry for future leaders, and rendered the Company structure a closed oligarchy dedicated to continental trade of English cloth. From that point on the London-based leadership of the Corporation incrementally placed restriction on cloth merchant in the outer ports and cities, as well as factors in he continental ports of trade which effectively shut them out of .the cloth overseas trade. While Elizabeth moderated this in the course of her reign, it did not alter a core resistance of the Company governance to entry by non-London merchants.
In alliance with the Crown in policies concerning commercial trade, and aligned with English Crown vs. Parliamentary politics, the Merchant Adventurers proceeded to dominate the political governance institutions of the City of London, placing the latter within the King’s orbit, by securing the election of its members to important positions of power during much of the pre-English Civil War period. That meant great power and influence of London merchant adventurers associated with the corporation amassed great influence over the governance of the City of London, and the investment and finance activities of the capital city of England during the century in alliance with Elizabeth.
Headquartered in London and Antwerp, the Company of Merchant Adventurers elites were in a potentially influential and strategic position from which they could assume a commanding role in England’s overseas trade and commerce. They chose to do so, but for the most part limited their activity to protecting and enhancing their Company access to northern Europe through Antwerp and to confine themselves to cloth-wool apparel related products for export. They were not interested in imports, save to commodities of use to cloth and wool industry/guilds. In that cloth and wool constituted three quarters of all English exports in this period, their use of London as their principal English port secured for them status and a level of protection as they set up foreign contacts, relations, and trade abroad–which over time evolved into becoming the “establishment” of English foreign trade. [99] Robert Ashton, the City and the Court, pp. 23-4 The Company of Merchant Adventurers also left those interested in other commercial trading to their own devices and lobbying. While they did not oppose such ventures head on, the Company’s dominance over overseas policy felt the pressure of their deadweight on the policy process.
The net effect, intended or not, was that a small, powerful oligarchy of London merchant adventurer families, for all practical purposes, marginalized overseas trade by non-member merchant adventurers. The exclusive monopoly of the wool-cloth Merchant Adventurers Company on wool export to the Continent meant it constrained access of others to London’s access to Europe’s wealth and blocked English entrepreneurs access to the Orient and East Indies. The simple take away is London was where the action was.
The Company marginalized entrepreneurs and aspiring gentry from areas other than London who were stymied by London’s size and concentration of power and institutions. Unwilling to abandon their place of origin they pursued their adventures from their homelands and dealt with London’s power as their needs required. This, of course, intensified their frustration and it also fragmented the focus of their trade and render their business plans and overseas missions more complex and multifaceted. Perhaps most of all it allowed the entrepreneurs more leeway to take advantage of the more profitable, if risky, war-raiding and privateering.
The narrowness of interests within the Company followed from its lack of inclusiveness within the wool and cloth sector and the closed organizational structure of the Company secured by royal charter continued into the 1560’s. The latter is due, as Brenner’s asserts, that these wool-export minded London merchants “more tightly controlled conditions under which the cloth export commerce was pursued–and specifically the Merchant Adventurers success precisely from the 1550’s and 1560’s in getting the government to increase their privileges considerably. Indeed, in view of the relatively favorable conditions that actually prevailed for London denizen merchants in the traditional cloth trade with northern Europe from the late1550’s to the early 1600’s it is not easy to see why they would have felt the need to seek alternatives farther afield. [99] Robert Brenner, Merchants and Revolution, pp. 10-11.
By the early, 1500’s. these cloth/wool companies had located around England’s key port cities, most of all London whose cloth/wool cluster dominated not only the metro economic base, but extended its organizational tentacles into the country’s wool-cloth cluster as well. The cluster’s ebbs and flows injected volatility in prosperity/recession and disrupted the kingdom’s workforce that triggered relocation of the workforce not to ignore disturbing anomic riots such as “Evil May Day of1517” when thousands of City residents rose up against foreign workers and residents, pillaging the homes of the foreigners, and hanging a number who they felt were stealing bread crusts from their mouths and jobs from their families. Lack of a social safety net meant the unequal distribution of wealth produced horrible living conditions, horrific housing, and and desperation in the underclass.
The realization by many elites that badly distributed prosperity and an economy that could not produce sufficient number of jobs, because it rested on one industrial sector called attention to the lack of products other than cloth and wool which importation could introduce into the English economy increasingly called into question the previously dominant economic strategy of import substitution suggesting strongly it was counter productive. It was also increasingly clear the traditional English economy could not meet demands from a competitive mercantilist Europe, prone to war and colonial empires.
By the 1550’s, actually earlier, the Company essentially ran the one-horse export economy that England enjoyed. As such it developed into a bastion of wealth for its members, this wealth was put to use in a number of investments and opportunities. The take away from these observations is the English cloth export evolved into an foreign trade dead end. It stopped with cloth and wool export only, with little to no import. What import to England existed was on the initiative of other nations for the most part. The wealth generated from this one-export no import commercial trade brought about by the first great trading company, the Company of Adventurers, held by a small group of family dynasties who dominated the Company of Adventurers and its transactions, and who passed on their position through primogeniture inheritance.
Cloth export, primarily a one way export only concentrated in ports such as Antwerp, the primary entrance point, and over time a European agent-factor nexus developed that allowed London and eastern-sited cloth merchants to develop and sustain an advantage in cloth trade that other English regions could not penetrate. English cloths came to be shipped almost exclusively to Antwerp, and from there to their ultimate destinations in various parts of Europe” [99] Robert Brenner, Merchants and Revolution: Commercial Change, Political Conflict and London’s Overseas Traders, 1550-1653 (Verso, 2003), p. 6. During the fifteenth century, the focus of the Company of Adventurers was abroad; that’s where its offices were and the continent and its ups and downs, conflicts and opportunities, captured the interest of these merchant adventurers.
Innovation and entrepreneurship were suppressed and restricted to a very few elites that had successfully accessed their corporate oligarchy in guilds, which itself than seized ahold of City/town governance, and accessed national policy-making through their use of structures like the guilds, obtaining local or royal offices, acquiring concessions, and, in overseas trade, incorporating joint stock great merchant trading companies with monopolist trade charters from the Crown. The system that emerged exhibited an overpowering tendency to create a network of internal oligarchies within each corporate and public structure involved in both policy and in its implementation. Mired deep within the still traditional and aristocratic elite social structure saturated with inequality that dominated most every feature of the English Tudor policy system, England by 1550 needed and wanted to compete, produce and grow, but simply could not easily rise above its clogged policy system to achieve some sort of economic break out,.
Closed policy-elite stagnation ensued and the issue of the time was how to break into the policy process and access effectively the decision-makers that allowed for change. Taking advantage of this opportunity, the Crown was able to siphon off what it viewed as its share of the profits generated to support its priorities and lifestyle, Through its definition of partnership, its monopolistic charters regulated but also defined and legitimized the policy making and implementation of those it chose to support. Robert Ashton in some frustration is forced conceded that the process, lacking a strong Parliament in particular, ” an impecunious government can perhaps hardly be blamed if it also saw in the licensing system a means whereby it might kill the economic and fiscal birds with the same stone” [99] Robert Ashton, the City and the Court, 1603-1643 (Cambridge University Press, 1979), p. 18
Some merchants, however decided that opportunity lie in expanding overseas trade to the four corners of the globe, particularly the Far East and the East Indies. And so in the middle 1550’s England started its oversea commercial trade pivot. With the power emanating from their privileged monopolies London-based cloth merchants pleaded their case to the central royal government in residence at London. At the point when growth in the cloth trade stagnated during the decade of the 1550’s the impulse of those desiring to trade in untouched markets directly affected the course of overseas trade and foreign commerce. New Adventurers were drawn to action. While not abandoning their memberships or relations with the powerful Merchant Adventurers, they copied her structure and centralized, hierarchical leadership derived from the Company of Merchant Adventurers and incorporated the first of the major “regulated” joint stock trading companies to be formed during this the second half of the sixteenth century.
While the Company of Merchant Adventurers, which still included by far the greatest number of the City’s wealthiest merchants provided relatively little investment support “to the network of new, growing and dynamic overseas trading companies, “becoming even more obsessively focused on their short-route cloth trade with northern Europe” [99] Robert Brenner, Merchants and Revolution: Commercial Change, Political Conflict and London’s Overseas Traders, 1550-1653 (Verso, 2003), pp. 21-3. While the Merchant Adventurers trade was thus an increasingly unitary one [cloth export to northern Europe], and separated from the others [expanded goods and import into new markets] the southern and eastern trades [the latter] experienced an increasingly intertwined growth, motivated by the same interlocking group of merchants with common commercial goals” [99] Robert Brenner, Merchants and Revolution: Commercial Change, Political Conflict and London’s Overseas Traders, 1550-1653 (Verso, 2003), pp. 15-17.
In essence a new group of trading merchants had spun off from the Merchant Adventurers [the Muscovy or Russia Company], and the latter pushed into trading with the Spanish, Portugal, Italy, and Turkey–forming the Levant Company in 1592. Our soon to be friend, Sir Thomas Smythe was a major leader in the latter set of trading companies.
In many ways, especially social, the Company elites transformed London into a Company town, Company members and officeholders transformed their elites into an English elite quite different from the dominant landed agricultural-manor-based aristocracy; the Company was a merchant elite, an urban commercial one that concentrated in the mega city that London had become. Having said that, however, company elites often chose to involve themselves in London politics and to secure elective office, alderman, and the Lord Mayor. Their primary interest, aside from securing what benefit they could from London politics, was to access and cement an alliance with the Crown and the Sovereign. Their wealth made loans to the state possible, and their experience offered advice and middlemen for the sovereign to supplement his initiatives and priorities abroad.
As a prominent and affluent element in London’s governance of the capital city they could offer considerable resources and advantage to the cash-starved monarchy. In the Tudor period they gained access to court politics and acquired the sovereign’s favor at least to the extent the Queen saw them as a useful ally in domestic finance and foreign affairs, an ally that brought stability and critical resources. With London England’s mega city and the Crown as allies the Company’s members and core oligarchy became as close to the commercial established as England possessed at that time.
Their narrow view of such trade, however, was not encouraging or facilitative for a more expanded notion of overseas trade, and, as we shall see made London somewhat more vulnerable to political instability particularly when the cloth/wool trade was in some difficulty or in lean years when exports declined due to war or market issues. In such times when the gilds and cloth/wool companies reduced their workforce or were not hiring workers the economic refugees from the countryside looking for employment easily visible groupings of restive and sometimes volatile underclass raised anxiety of more affluent and secure Londoners, as their neighborhoods and substandard housing could not easily be ignored or bypassed.
While not reaching the point of opposition to the Company of Merchants of the establishment of this era, they saw potential in copying the Company of Merchant Adventurers methods and organizations. When an opportunity opened up in the 1550’s the more adventurous, under the leadership of John Cabot’s son, Samuel broke the ice by creating a new merchant trading company (Muscovy) around a new trading elite that sought opportunities, mostly in China and Japan, following the Portuguese and Spanish leads.
The 1550 pivot seemingly threatened to be a pivot in overseas trade away from the Company of Adventurers, but was not regarded so in that period. It was more a wave of interest in overseas trade that was perceived as an economic opportunity that should be seized. Led by a generational change in English entrepreneurs, and sons of the establishment that were willing to carpe diem. Since they did not threaten the interests of the establishment, but indeed offered them prospects that stabilized England’s tensions and offered prosperity to the rising population and growing urban centers.
As London became king of the wool export trade, it compelled England’s outer ports to devise their own path. England’s post 1550’s overseas pivot followed a bimodal development pattern: London and the Outer Ports. The rivalry and bitter competition played a notable role in England’s invasion of Ireland, and global discovery and exploration. London’s approach to overseas trade, the trading factory, and the great merchant trading companies differed radically from that used in the Outer Ports. We will discuss that in more detail below.
Equally, important, London’s organizational vehicle, the joint stock Company of Merchant Adventurers became the model, the corporate form that dominated England’s overseas trade and commerce, and colonization. In that the Tudor’s, for reasons to be soon discussed, delegated much of overseas commercial trade to private corporations the joint stock corporation’s strength, the ability to attract private investors in a manner that transcending individual companies and wealthy merchants it proved to most in that time period as the most promising corporate structure suitable to the task.
That form of business organization demonstrated an ability to achieve dominance over the domestic cloth industry. Its entry into partnership with the sovereign and the English state in its overseas export venture was made possible by a sovereign grant of monopoly to that corporation in the industry export to northern Europe. To the merchants on the inside, however, its attractiveness included a flexibility in its governance structures that centralized corporate authority into a few largest investors of the corporation–offering to them security in an investment most risky.
What made the joint stock merchant trading company seemingly effective in their view was it oligarchic and restricted membership created wealth that could be reinvested in more expeditions and trade. By the late 1500’s the joint stock corporation, not unlike a Russian doll, proved amenable to superimposing a hierarchy of internal oligarchies, that centralized its governance in a few, very few investor who were converted in to a corporate governance by family dynasties. Later on, we shall focus on this issue, but for now the change in joint stock governance over the last half century came at the increasingly noted expense of fostering jealously and frustration of those who wanted in on this opportunity.
The point of controversy was on their “monopoly” which closed their access and prevented others from participating and sharing in its wealth creation. Their perception was they lacked the political and policy making power to do so. The point of this is the dominant corporate structure of English overseas trade and commerce, had entered into the seventeenth century with what proved to be a fundamental flaw–a flaw so serious the structure would be unable to enter effectively into the new policy area du jour: colonization.
How the partnership with the state and sovereign was affected by the union of the joint stock corporation and the royal monopoly and grants or, the crown, privilege. Unable to form their own great merchant trading company, the Outer Ports turned to privateering, the development of Irish plantations, and after the 1580’s, leadership in the discovery and navigation of North America and the West Indies.