Murray on Bell, Brooks and Dryburgh, _The English Wool Market, c. 1230 -1327_

[eh.net-review at eh.net]

Published by EH.NET (June 2008)

Adrian R. Bell, Chris Brooks and Paul R. Dryburgh, _The English Wool 
Market, c. 1230-1327_. Cambridge: Cambridge University Press, 2007. 
viii + 205 pp. $99 (cloth), ISBN: 978-0-521-85941-7.

Reviewed for EH.NET by James M. Murray, Department of History, 
Western Michigan University.


English wool was a medieval commodity whose production, acquisition, 
exchange, and manufacture launched countless ships, occupied many 
merchants, and kept the looms of Flanders, England, and Italy 
humming. Some (but by no means all) of this wool was simply the 
world's finest raw material for the production of high quality cloth, 
one of medieval Europe's most successful exports. And it was in 
chronically short supply in the period covered by this study, really 
the reigns of the three Edwards, kings whose efforts to tax wool 
exports are also part of the story.

The cooperative research project by scholars from two UK institutions 
(University of Reading and King's College, London) that led to this 
book and three related publications is a model of efficiency and 
usefulness, although the articulation among its various parts is 
unclear. The first product was an edition and translation of 203 wool 
contracts published in 2006 by the National Archives, Kew (formerly 
Public Record Office), summaries of which are also available in an 
online version at www.data-archive.ac.uk, study number 5325.[1] The 
series from The National Archives used were: Close Rolls (C54); 
Exchequer Miscellanea (E101); Memoranda Rolls (E159 and E368); Plea 
Rolls (E13); Ancient Deeds (E210, E236, E237); and Special 
Correspondence (SC1). Appendix 3 of the book gives a spreadsheet 
overview of each contract including its chronological order, 
reference, list of buyer(s) and seller(s), and summary of contract 
contents. This database alone puts an enormous quantity of new 
primary source material within easy reach of scholars.

On this evidentiary basis, the coauthors have published two journal 
articles besides the present monograph, the first, in the _Journal of 
Medieval History_ the second in _Journal of Banking and Finance_. The 
former is a more or less straightforward version of the monograph's 
chapter 3, and the latter is a significantly different version of the 
book's chapter 4. The salient difference between the journal and book 
versions is the inclusion of a more extensive apparatus mathematicus 
in the _JBF_ article including formulae and an additional table 
showing "regression results of tests for market efficiency."[2] The 
intent here was obviously to tailor the presentation of the data 
analysis to the more or less numerate among interested scholars, but 
what is curious is that the book contains no reference to the article 
nor any mention that chapter 4 contains the same text but a 
pared-down presentation of the mathematics.[3]

The subject of the English wool trade could hardly be more important 
in the economic history of medieval England in particular and 
medieval Europe in general. As previous research has shown, from the 
eleventh to mid-fifteenth century wool was England's dominant export 
-- at its height amounting to some ninety percent of revenues, and 
even in the subsequent period of decline from c. 1450 to 1650, wool 
in the form of English cloth was an equally dominant export in terms 
of trade value.[4] Yet the authors point out that the bifurcation of 
research into the subject by economic historians on the one hand and 
historians of the local and monastic economy on the other has 
obscured "important details" due to the neglect of "any concerted 
attempt to explore the fuller extent of the source base." In other 
words, this is an innovative study of these particular contracts 
using the methodology of modern finance theory, not a general history 
or even a replacement of the seminal works by Eileen Power, T. H. 
Lloyd, and John H. Munro.

Nonetheless, the authors succeed in presenting conclusions that if 
not revelatory do make a solid contribution to the literature and 
make a persuasive claim for the financial acumen of late medieval 
merchants and woolgrowers. Their conclusion that "not only options, 
but instruments akin to forward contracts were in widespread use 
throughout the thirteenth and fourteenth centuries," adds to the list 
of innovations whose origins must be pushed back to the late Middle 
Ages rather than more modern periods. Future historians will also be 
in the authors' debt for the richly nuanced picture of a market under 
stress, where competing parties engaged in "cutthroat" competition 
for position as buyers in the market, while producers pitted 
potential customers against each other in an attempt to repair and 
restore shaky internal finances.

Chapter 3 gives a micro-study of these market dynamics by presenting 
the case of Pipewell, a Cistercian abbey of middling importance in 
Northamptonshire, whose history is richly illustrative of the storm 
and stress in the wool market from c. 1270 to 1325, the period of the 
greatest number of forward contracts. The majority of these contracts 
were made between Italian merchants and monastic institutions, most, 
like Pipewell, were Cistercian houses. Pipewell, however, occupied a 
particular niche as a small, super high quality producer whose 
product commanded top market prices. The decades-long travails and 
virtual bankruptcy of the abbey provide both a cautionary tale and 
window into the economic forces that shaped the wool market.

Pipewell was atypical in that its chief creditors were a firm of 
Cahorsin merchants instead of the more common Lucchese and Florentine 
firms, but it was all too typical of many English Cistercian houses 
in selling for ready money promises of wool delivered at a set price 
in the future. This seemed a good bargain for both parties, as 
Pipewell Abbey needed to complete building programs and the Cahorsins 
were eagerly seeking wool supply ahead of their Italian competitors. 
Innocent in the 1270s, such debt for wool swaps proved disastrous for 
monasteries across England by 1300, as animal disease decimated sheep 
herds reducing the wool clip and thereby the abbeys' ability to meet 
their contracts. This kindled "those fires of indebtedness which 
gutted English Cistercian houses late in that [thirteenth] century." 
Exacerbating problems of supply were new taxes levied by the English 
crown, disruptions in the market caused by war, and numerous 
protracted law cases. Pipewell was forced to refinance contracts, 
accept sheep from its creditors in order to build herds, and appeal 
for royal protection. Even these efforts at retrenchment could not 
withstand the terrible famine and murrain of 1315-1322, which even 
contemporaries called the "magna caristia," and the abbey was 
temporarily dispersed. Thus ended a struggle to stay afloat extending 
over some forty years.

Chapter 4, "Modern Finance in the Middle Ages? Financial Aspects of 
the Advance Contracts for the Sale of Wool" is the most innovative in 
its use of "valuation techniques from 'modern' finance theory to 
analyze the large number of advance contracts" in order to ascertain 
the implied interest rate of the transactions and to assess the 
efficiency of the wool market. As stated above, a mathematically more 
complete version of this chapter was published in a specialized 
journal, but most historians will find enough of the quantitative 
underpinnings to assess the argument. After a disclaimer clause about 
the difficulties of applying financial analysis to such a small 
evidence base, the authors conclude that the forward agreements with 
money accepted for delivery of future wool sacks include an implicit 
interest rate of 20 to 27 percent given the discount over the spot 
price of wool promised in the contracts. Variations between the 
extremes can be accounted for by the creditworthiness of the abbey 
and strength of demand by the merchants. This rate accords well with 
interest rates of other loans across a wide variety of church and 
urban economies.

Market efficiency is judged by how closely the forward price predicts 
the subsequent spot price of wool. The authors seek to test this for 
the medieval wool market by isolating data from the first year of a 
forward contract leaving sixty-three observations. The influence of 
additional variables -- such as the length of the contract, the size 
of the contract, and even which monastic order was involved -- on the 
discount rate is also taken into account. Given these, and a 
comparison with modern wool trading in formal exchanges, the authors 
conclude that "the medieval wool forward market was remarkably well 
functioning and orderly" (p. 144).

In chapter 5, the conclusion, the authors recapitulate their findings 
and seek to answer some nagging questions. The finding that "modern 
finance is perhaps not so modern after all" reminds us of the 
remarkable ability of merchants of all times and places to solve 
practical problems in order to do business. The fact that the forward 
contract disappeared in the face of changing market conditions 
shortly after 1325 shows us as well the anachronism in measuring the 
medieval past by the standards of modern finance. The genius of 
medieval merchants was in adapting and adopting tools to cope with 
and circumvent the very difficult conditions of late medieval Europe, 
not in inventing modern finance. The search for modernity has been a 
besetting sin of past economic history, though using the tools of 
modern mathematical economics, as is done in this study, can lead to 
useful insights about the economies of past times.

Notes:
1. The book does not make clear that the full text of these contracts 
will only be available online by Autumn 2009 at the earliest due to 
copyright considerations. A. Bell, C. Brooks and P. Dryburgh, 
_Advance Contracts for the Sale of Wool, c. 1200-1330_ [computer 
file], Colchester, Essex: UK Data Archive [distributor], March 2006. 
SN: 5325 and eidem, _Advance Contracts for the Sale of Wool c. 
1200-1327_ (List and Index Society, 315 London, 2006.

2. "Interest Rates and Efficiency in Medieval Wool Forward 
Contracts," _Journal of Banking and Finance_ 31 (2007) 361-80.

3. "Leger est aprendre mes fort est arendre: Wool, Debt, and the 
Dispersal of Pipewell Abbey (1280-1330)," _Journal of Medieval 
History_ 32 (2006) 187-211. The _JMH_ article mentions in footnote 7 
the existence of the _JBF_ article. There is a third not readily 
available article mentioned in footnote 7 as well.

4. See on this John H. Munro's review of the edition of the contracts 
in _Agricultural History Review_ 55 (2007) 311-12.


James M. Murray is director of the Medieval Institute at Western 
Michigan University in Kalamazoo, Michigan. He has published on the 
history of medieval business and the urban economy of Bruges in the 
late Middle Ages. He can be reached at james.murray at wmich.edu.

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