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Home | Wire | The Hanseatic League: An "Empire" of Commerce

The Hanseatic League: An "Empire" of Commerce

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Tags Decentralization and SecessionProtectionism and Free TradeWorld History

Once upon a time there was a northern, medieval phenomenon as much the subject of universal myth and curiosity as that of the enchantress city-republics flourishing down south: the Hanseatic League of the mid-13th to 16th centuries. “The Hansa“ (old German for “associations“) or “The League,“ as it was known, began as a treaty between Lübeck and Hamburg “to clear the road of pirates and robbers between the Elbe and the Trave“ [a river in northern Germany with its delta at the Baltic sea]. It gradually increased to add Cologne and Bremen, later expanding to Gdansk, Riga and Novgorod, finally incorporating Bruges, Brunswick, and many satellite-cities throughout Scandinavia. The main goal of this expansion was to keep the herring fisheries of the Baltic in the hands of the merchant-princes of Lübeck and decidedly out of the hands of Frederick II Hohenstaufen, stupor mundi extraordinaire, who, in 1226, decreed that lovely, gothic-gabled town an Imperial City. Then, too, routes to capture the salt trade to Cyprus were critical. Soon, The League was dominating commercial relations with the Levant, Venice, Spain, France and England in timber, fur, grain, honey, Scandinavian copper and iron, in return for spices, medicine, fruit and wine and cotton. Such is how this loose coalition of Flying Dutchman--capitalists emerged as an empire without a State.

Navigare necesse est, viviere non est necesse is inscribed over the door to the old shipping house in Bremen: “It is necessary to carry on navigation, it is not necessary to live.” This old Hanseatic wisdom truly captured the spirit of this great port-civilization. Ruled by a code of honor as a de-centralized alliance, trade was everything and “The State” was looked upon as a land-locked, bureaucratic annoyance. The League came together and stayed together to share the risks of trading, seafaring and—where necessary—to deal with pestering overlords who knew nothing of commerce on the high seas but could smell a fresh source of taxation from a thousand Baltic tributaries away. They were “men who would not fight or steal; who would not live by plunder for pay,” as a 19th century British magazine, The Illustrated Magazine of Art, once swooned in nostalgia. “As those who wished to sell honestly, they were compelled to unite together for their own protection in order that they not be deprived of the rich goods they brought back with them from Italy for the north of Europe. They formed an association—one which ultimately became the proud and powerful rival of Kings and Emperors.”

In no time those kings and emperors “begged their loans and pawned their crowns” to do business with the Hansa and their fleet of 248 merchant ships — the pride and power of the seas. Lübeck, at one point the richest city in Europe and referred to as the “Carthage of the North”, became the unofficial capital of the League, one that maintained its own mercenary-army of 50,000. But that was about it. The League had no coherent political organization. To join or to leave was determined by trading interests of the merchants—there was never a clearly defined administrative center or even a system for raising taxes. Admission was strict: no cities would be allowed in unless situated on the sea or some navigable river adjoining. Cities “which did not keep the key to their own gates” were not even considered. They had no parliament, no president; no consistent civil jurisdiction outside formal oaths and pledges. As a protector they chose the Grand Master of the Teutonic Knights—and even he had to take an oath to preserve the mercantile freedom of this merry posse of salty dogs. The League’s on-again, off-again Diet met whenever and wherever it was convenient to discuss things; there was no army or navy, and in the event of some outside threat, the cities most at stake would come together to decide a common plan of action such as higher tariffs, and only rarely the waging of war. As The League’s founding charter proclaimed: “If the conflict is against a prince who is lord of one of the cities, this city shall not furnish men but only give money.”

The condition of affairs in Germany at this time was favorable to the development of these feisty free towns, for Emperor Frederick was always engaged in vain wars in Italy, while leaving imperial matters at home to take their own course.

Thus, the Hansa, one might say, was the medieval, northern, sea-faring equivalent of the exalted mode of the great poles — Athens, Corinth, Thebes—themselves centers of industry, generating economic-civic relationships and an explosion in inter-regional trade between other city-states. The League remained as such only a few decades after that fateful day in 1598 when Elizabeth I closed a key Hansa trading association on the Thames in London, primed as she was to create an imperial power of England.

When The League first started to take shape, it spread with astonishing rapidity, reaching the extreme eastern point of the Baltic a few decades after the founding of Lübeck. The establishment of so many successful colonies stimulated a heady commercial spirit, and the race to search out the remotest markets became a kind of sport of wayfarers.  That the League originated along the Baltic was due to the fact that the entire region was far behind the other great commercial districts of Europe in terms of civilized development, and presented greater risks and dangers to traders than did the Mediterranean or the North Sea. The Italian cities, for instance, never combined into an organized system for commercial ends. The Dutch towns would never have been under the necessity of uniting, as far as their trade with England and Norway was concerned; they were drawn into the Hanseatic League because of their interests in the Baltic.

As one historian, Ellen Semple of the American Geographical Society of New York, wrote of The League: “For the towns scattered along the German and Russian coast from the Trave to the Neva, union was a matter of life and death. Moreover, they were full of the spirit of enterprise and self-reliance engendered by their mode of life. Their inhabitants, lured as colonists to these inhospitable shores by partial exemption from taxation and by certain unusual rights and privileges as citizens, had tasted of the sweets of independence.”

These commercial cities were located between the advanced industrial centers of Flanders, the Netherlands, and western Germany on the one hand, and the undeveloped lands to the southeast, east and north on the other. To the south of them was a great passage from the Mediterranean, and also from the Black and Caspian Seas. They formed the northern termini of the trading routes “and they thrived or declined according to the commercial activity along these great continental highways”. They entered into close relations with the inland cities which grew up along these routes to complement the work of the coast towns, and formed with them their own city-systems, in which each sustained a defined relation to the others.  For this reason, the Hanseatic League, mysterious as its origin is, was formed first by a federation of maritime cities “simply for the purposes of protection to their common trade”.

The Hansa was also one of two great powers that used gold-as-money systems that worked in their day — some would say all of history — the other being Venice. This gold as money was in constant circulation; there was no credit-as-money in The League.

It was Socrates who spoke of the concept of a “city-soul.” The natural justice, as he called it, of city life was that men made products for the men who need them, with each individual endowed with some mental talent or physical capacity to equip the community. It is a justice, as one scholar of the philosopher has written, drawn from nature and “applied to the man-made organization of his order and rule.” For the Hansa, the City was an expression of civic greatness — and not “The State”.  The Hanseatic League remains a wonderful, romantic, practical tale of the power of pure commerce to organize and civilize human relationships, and its unfailing genius in advancing the progress of human society.

Marcia Christoff-Kurapovna contributed feature pieces and op-eds on Swiss and Liechtenstein banking issues for The Wall Street Journal Europe while based in Vienna, Austria; she also authored a column, ‘Swiss Watch.’ She currently lives in Washington, DC where she is a speech and op-ed writer to foreign dignitaries.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
Image source: Hanseatic-era shops in League town of Bergen, Norway (via iStock)
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