Conclusions

The picture that emerges from these sources is therefore not the linear institutional progression outlined by North and his followers. The importance of combining techniques is evident, with the extensive use of the sea loan being particularly revelatory. The mindset of the early modern businessperson was not that of the mathematician, arriving at elegant and accurate solutions, but that of the medieval stonemason, drawing on experience and intuition and distributing the weight with plenty of arches. The story of risk management may, in the long run, be one of progress, but it is not a story of stadial evolution.

Premium insurance did circumscribe GA in the end, but not straight away, and not because premium insurance represented a more sophisticated approach to risk that obviated earlier methods except in a few, well-defined situations. Here the chronology is key. Let us consider a question that has been hanging over the arguments of this book for some time now: why, if GA was so master-friendly – open to wide use and even abuse – did it go unchallenged for so long? Why did vociferous criticism and reform attempts emerge only in the 1780s? The answer lies not in any challenge posed by institution of insurance itself, but in the changes taking place in the way underwriting was organised. By the second half of eighteenth century, ever-increasing demand was incentivising the creation of profit-seeking, joint-stock insurance companies who could draw upon large reserves of capital.1 Addobbati, ‘Italy 1500–1800’, pp. 67–8. Such a transition was not nearly complete by the 1780s, but was by this point affecting even those traditional markets like Livorno that favoured time-honoured practices.2 Addobbati, ‘Italy 1500–1800’, p. 71. The emergence of underwriters as a sectoral interest that did not overlap with merchants – for whom insurance was their main occupation rather than one of a number of maritime-business activities – accelerated the eventual ‘disciplining’ of GA, already presented for these purposes as ‘anachronistic’ in the way it operated if not yet in principle: a troublesome instrument that followed different rules everywhere and periodically upset the company’s balance sheets. These dynamics will be considered further in the conclusion to this book.

This study examined normative and juridical sources from across Europe and the Mediterranean and compared these to GA records preserved in the Tuscan archives, finding significant differences between the two. This serves as another reminder to historians of the dangers of relying too heavily on normative juridical sources as evidence for how institutions worked on the ground. It even cautions against using these works as our departure points, allowing them to condition our thinking and our categories of analysis. The Llibre del Consolat de Mar was a very real source of normative authority throughout our period, but its provisions were in many ways an inadequate practical means of regulating GA, because the practices evidenced by the Llibre only distantly resembled the procedure that now existed on the ground. The Llibre and the Lex Rhodia de Iactu had a clear impact on the shape of the sea protests, as the continued importance of the consultation suggests, but their influence on the essence of the procedure was limited. By the very end of our period, jurists like Giuseppe Casaregi and Carlo Targa were wrestling with the tension between written norms and merchant usages, but resolution was a long way off: some civil law maxims, meanwhile, were indeed ‘subtleties’ that had little to do with operational practice.5 See Rossi, ‘Civilians and insurance’.

The fact that GA was subject to significant procedural variations across space and time has been amply demonstrated, confirming what Jolien Kruit has already proved with reference to the normative material.6 See Kruit, ‘General average’. But this study has also gone further, showing that ideas about how and when common contribution should work varied much more than has previously been claimed. Different situations involving common contribution would be crystalised under the rubric of GA only in the early modern period. In the Netherlands this was probably accomplished through a mixture of bottom-up change in operational practice and top-down interventions by jurists and states; in Tuscany, it seems that practice was in some ways ahead of the jurists.7 De ruysscher, ‘Maxims, principles and legal change’, pp. 261–2; Dreijer, The Power and Pains, pp. 89–133. Furthermore, there was not even the same agreement on GA in principle. Some merchants positioned GA closer to a strictly reciprocal form of mutual indemnity rather than as an equitable obligation arising on account of a sacrifice being made for the common benefit.8 p. 185. The idea that GA testifies to the existence of a lex mercatoria or lex maritima, or even can be used to stand for a common mercantile culture, simply does not stand up. The fundamental point with regard to the lex mercatoria is, as Emily Kadens and Albrecht Cordes point out, that merchants could get by very well without it.9 Kadens, ‘The myth’, p. 1181; Cordes, ‘Lex maritima?’, p. 82. As has been shown here, the stamp of approval from the court was often needed in order to ‘export’ the judgement to other centres, but these exported judgements were usually respected, if sometimes begrudgingly.10 Dyble, ‘Lex mercatoria’, pp. 686–7.

GA’s operation was not shaped by legal and economic considerations alone: it also clearly bore the imprint of political economy.11 See Dyble, ‘Divide and rule’. One of the most evident and consistent variations in Tuscan procedure was the practice of regularly allowing Northern masters to use a form of self-assessment for damages to the ship. The Tuscan authorities were willing to countenance procedural irregularities, and to allow Northerners to arrange proceedings in whatever way they saw fit, a thing which is consistent with the culture of the free port and Tuscany’s broader maritime strategy. The importance of private agreement, cooperation, and even collusion in reaching outcomes is clear, even when resolution was ostensibly sought through an official channel.

GA’s antiquity and supposed staticity are implicit assumptions baked into ‘evolutionary’ accounts of institutional development.12 North, Institutions, p. 127; Harris, ‘General average and all the rest’. Rather than simply an archaic forefunner of ‘modern’ premium insurance, however, GA continued to be used in concert with other risk-management techniques, including premium insurance and sea loan. The GA that emerges from the archive of the Consoli del Mare was a capacious instrument and remained a useful part of the risk-sharing system, as one in a series of load-bearing arches which progressively distributed the weight of disasters through increasingly large communities of risk.13 p. 183. In this sense, the benefits of different risk-management instruments – GA, sea loan, premium insurance – were cumulative; one instrument did not replace the other. At the same time, these older risk instruments also responded individually to some particular demands of the seventeenth-century marketplace. A sea loan gave masters cash up front, preventing delays which the master might otherwise have incurred whilst seeking enforcement of insurance pay-outs via the courts.14 p. 178. On a more profound level, the historical and geographical variety within a single ‘institution’ offers an ontological challenge to those accounts of institutional development that tend to see institutions as discrete, well-defined entities existing largely independent of one another.15 Harris, Going the Distance.

Above all, GA remained an important cost- and risk-management instrument for the transport sector – an element sometimes overlooked in business history, which more readily takes the merchant as its protagonist. In Chapter 5, it was demonstrated in quantitative terms how GA could defray carriers’ operating costs. The case of the Cavallo Marino is one of many concrete examples of Ascanio Baldasseroni’s assertion that GA was the secret of the Galley of Salamis, whose parts were surreptitiously replaced over time.16 Baldasseroni, Delle assicurazioni marittime, vol. 3, p. 15; ASP, CM, AC, 319-20 (18 March 1669). This was a particular boon to a master who owned his vessel, or a share in it – the unsung foot soldier of maritime commerce who regularly endured the ‘desperate perils, hard slogging, dogged grubbing for cargoes in ports from Livorno to Alexandria, ongoing disputes … and small profit’ which were the quotidian reality of trade in the Mediterranean.17 Heywood, ‘The English in the Mediterranean, 1600–1630’, p. 34. More generally, it helped to keep costs low for the ship-owners. In this respect, a structural inevitability built into GA was exacerbated by the master’s control over the evidence on which decisions were based. The advantage was then compounded by the court’s willingness to aid them in making their accounts legally watertight, and in the readiness of the Consoli to give the master the benefit of the doubt in their judgements, even if the Pisan Consoli do not appear to have been particularly unusual in this respect. Unless one had chanced upon specific local information, it was very difficult to challenge a GA claim.

It is likely that this state of affairs was acceptable and perhaps even desirable at the beginning of our period. It cannot be that merchants were simply uninterested, as Pierallini suggested in the eighteenth century: the evidence examined here has shown a surprising level of merchant involvement in cases.18 ASL, Governo civile e militare, 977, f. 29r. After all, unforeseen costs were part and parcel of seventeenth-century trade; allowing these to be borne by the carrier was simply unrealistic. Furthermore, despite the imbalance between ship and cargo interests – and in many ways because of it – seventeenth-century GA did in fact facilitate commerce, above and beyond its role as a risk-management tool: first of all, because of the benefits it provided to the ship, particularly the ability to partition some ordinary wear and tear, it helped to keep freight costs low. Had it not been possible to defray some of these expenses, shipmasters and ship-owners would have had to charge higher prices in order to make a profit on their voyages. This could have disincentivised investment by providing upfront costs. Secondly, by reducing upfront costs for ship-owners, GA helped out a sector of tight margins that quite literally kept the entire maritime economy afloat. Merchants were, at any rate, often shareholders in vessels in this period and were thus not repeatedly on the same side of the GA equation.19 Davis, English Shipping Industry, pp. 81–7.

The gradual disciplining of maritime violence was probably responsible in some measure for changes in attitude towards the end of the eighteenth century. The Mediterranean practice of corsairing was gradually halted, and violence between states became more restricted and better regulated whilst navigational technology improved.20 Addobbati, Commercio, rischio, guerra, pp. 115–17. In such circumstances, it may have seemed less obvious to merchants that the transport sector was worthy of such latitude in GA procedures. What is perhaps more important in this respect, however, were changes to the nature of the insurance market which saw insurance become an increasingly specialised sector in its own right. In particular, the final quarter of the eighteenth century saw a huge increase in demand for insurance with the onset of the American and French wars, and institutional change followed accordingly.21 Doe and Pearson, ‘Organizational choice in UK marine insurance’, p. 53. Underwriter was no longer one of many hats worn by the merchant; GA was a now a time-consuming and irritating expense item on the balance sheet of a specialised underwriter. Here we might once again repeat the words of Ascanio Baldasseroni, staunch opponent of spurious GA claims, and author of a treatise on insurance law published in 1786: