The Risks of Business
There is rarely profit without risk. It is this same risk, damnum emergens or compensation for damages, that theologians eager to unlock the mechanisms of investment recognized as early as the thirteenth century as one of the few justifications for monetary remuneration. Just as farmers, say, are threatened by cold and disease, it was also inherent in commerce, which was threatened by both loss and slump and yet always ready to seize the quick profit at the price of risky operations. From the moment they started to expand, medieval businessmen took a speculative risk. Shipwreck was not the only peril of business.
The first risk connected with large-scale trading was, nevertheless, that of loss at sea. There were storms that threatened, delayed, or diverted ships. There was the enemy fleet in time of war and pirates at any time. In fact, land routes were no more secure: wagons were broken by rutted roads, horses gave up in midstream, the woods were riddled with bandits, while a veritable horde of brigands was wont to attack any merchant foolhardy enough to risk crossing the Tuscan Apennines. But the risk of the chosen route is in proportion to the capital expended on it. More is lost if a ship is captured by Barbary pirates than if a packhorse falls into a ravine. Even if the sea routes attracted only heavy goods of little value while luxury items were more often transported by land, the volume of investment in shipping continued to grow with the great fleets from Genoa and the Hanseatic League, with their convoys of wine, salt, or alum, sailing in convoy for mutual protection, but as a result laying themselves open to natural risks