General Average and Risk Management in Medieval and Early Modern Maritime Business

Abstract

This open access book explores the history of risk management in medieval and early modern European maritime business, focusing particularly on 'General Average' – a mechanism by which extraordinary expenses regarding ship or cargo, incurred during a voyage to save the venture, are shared between all participants to protect equity. This volume traces the history of this risk management tool from its origins in the pre-Roman Mediterranean through to its use in the shipping sector today. Contributions range from the Islamic Mediterranean to the Low Countries, and taken together, provide a wide-ranging analysis of social, cultural, and political aspects of pre-modern maritime commerce in Europe. The volume is divided into five parts. The first one—Why and How Risk is Shared—starts with Maria Fusaro’s introduction and analytical description of the concept of General Average [GA] at large, highlighting some of its peculiarities and importance regarding both its historical development and future policy. This is followed by essays by Ron Harris and Giovanni Ceccarelli that, from two different perspectives, contextualise GA’s importance within the development of medieval and early modern risk management tools and business strategies. The second part—Origins and Variants of Mutual Protection—traces the development of GA from Byzantium to Early Modern Italy. It starts with Daphne Penna detailing the complex transition of GA from Roman law to the Digest, the Byzantine collection known as the Rhodian SeaLaw and their transmission in the Basilica. The focus then shifts to Hassan Khalilieh’s discussion of how GA rules and practices evolved in the Islamic Mediterranean. This section ends with Andrea Addobbati’s analysis of how this complex genealogy was received in early modern Italy. The third part—The Iberian Experience—is dedicated to the multifaceted articulation of Averages within the Hispanic world. Ana María Rivera Medina argues for the medieval roots of maritime risk mutualisation in northern Spain, and the second essay—by Gijs Dreijer—analyses the transplantation of these usages in the Spanish Low Countries in the fifteenth and sixteenth centuries. The section concludes with Marta García Garralón discussing the peculiarities of GA as practiced within the Carrera de Indias. The next part—The Genoese Experience—focuses on the extremely rich documentary evidence regarding GA in Genoa. It starts with Antonio Iodice’s discussion of local early modern normative developments. Then—in the essay by Luisa Piccinno—the focus shifts to the importance of GA data for the analysis of maritime trade passing through the port of Genoa. Andrea Zanini completes this section discussing the intersection between financing the maritime sector and risk-sharing strategies in the eighteenth century. The fifth and last part—Mature Systems—presents three cases in which GA was used as a tool of political economy by states with a strong maritime sector. Jake Dyble analyses the free port of Livorno, Sabine Go discusses developments in Amsterdam, and Lewis Wade the effects of the Ordonnance de la Marine in the French case.