Hostname: page-component-78c5997874-fbnjt Total loading time: 0 Render date: 2024-11-17T16:38:48.208Z Has data issue: false hasContentIssue false
  • English
  • Français

Social capital and economic performance: trust and distrust in eighteenth-century gold shipments from Brazil

Published online by Cambridge University Press:  13 December 2010

LEONOR FREIRE COSTA ,
MARIA MANUELA ROCHA  and
TANYA ARAÚJO
LEONOR FREIRE COSTA
Affiliation:
Technical University of Lisbon, School of Economics and Management (UTL-ISEG), Department of Social Sciences, (GHES), leonorc@iseg.utl.pt
MARIA MANUELA ROCHA
Affiliation:
Technical University of Lisbon, School of Economics and Management (UTL-ISEG), Department of Social Sciences, (GHES), manuelar@iseg.utl.pt
TANYA ARAÚJO
Affiliation:
Technical University of Lisbon, School of Economics and Management (UTL-ISEG), Department of Economics (UECE), tanya@iseg.utl.pt
Get access

Abstract

This article discusses agency problems in a period of market boom. It takes Portuguese trade with Brazil as a case study to discuss the impact of colonial market expansion on social capital. The hypothesis is that social capital depletion prompted an uneven distribution of information and a limited access to honest individuals, who might afford a premium to certain forms of agency. Given the states' inability to provide legal sanctioning in colonial regions, this article focuses on private-order mechanisms which were effective for selecting reputable individuals. The exploration of network analysis identifies the mechanism that responds to such an adverse environment and supports the argument that business organizations which counted on the geographical mobility of agents had comparative advantages. The approach followed in this article brings new insights on informal institutional arrangements and on itinerancy in contexts of low levels of social capital.

Type
Research Article
Information
European Review of Economic History , Volume 15 , Issue 1 , April 2011 , pp. 1 - 27
Copyright
Copyright © European Historical Economics Society 2010

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Acemoglu, D. et al. (2001). The colonial origins of comparative development: an empirical investigation. American Economic Review 91, pp. 1369–1401.CrossRefGoogle Scholar
Alden, D. (1968). Royal Government in Colonial Brazil, with Special Reference to the Administration of the Marquis of Lavradio, Viceroy, 1769–1779. Berkeley and Los Angeles: University of California Press.Google Scholar
Bacci, M. L. (2002). 500 anos de demografia brasileira: uma resenha. Revista Brasileira de Estudos da População 1, pp. 141–59.Google Scholar
Bowie, N. E. and Freeman, R. E. (eds.) (1992). Ethics and Agency Theory. Oxford: Oxford University Press.Google Scholar
Boxer, C. (1962). The Golden Age of Brazil, 1695–1750. Berkeley and Los Angeles: California University Press.CrossRefGoogle Scholar
Boxer, C. (1969). Brazilian gold and British traders in the first half of the eighteenth century. Hispanic American Historical Review 49, pp. 454–72.CrossRefGoogle Scholar
Burt, R. (2000). The network structure of social capital. Available online: http://gsbwww.uchicago.edu/fac/ronald.burt/research/NSSC.pdf.Google Scholar
Canabrava, A. P. (1944). O comércio português no rio da Prata (1580–1640). São Paulo: Universidade de São Paulo.Google Scholar
Carnaxide, V. (1940). O Brasil na administração pombalina: economia e política externa. São Paulo: Comp. Editora Nacional.Google Scholar
Carrara, A. (2007). Minas e currais: produção rural e mercado interno de Minas Gerais, 1647–1807. Juiz de Fora: Universidade Federal de Juiz de Fora.Google Scholar
Chaves, C. M. (1999). Perfeitos negociantes: mercadores das minas setecentistas. São Paulo: Annablume.Google Scholar
Coleman, J. S. (1990). Rational action, social networks and the emergence of norms. In Calhoun, C., Meyer, M. W. and Scott, W. R. (eds.), Structures of Power and Constraints. Cambridge: Cambridge University Press, pp. 91–112.Google Scholar
Coleman, J. S. (1991). Constructed organization: first principles. Journal of Law, Economics & Organization 7, special issue, pp. 7–23.CrossRefGoogle Scholar
Coleman, J. S. (1994). Foundations of Social Theory. Cambridge, MA, and London: The Belknap Press of Harvard University Press.Google Scholar
Cook, K. S. (1990). Linking actors and structures: an exchange network perspective. In Calhoun, C., Meyer, M. W. and Scott, W. R. (eds.), Structures of Power and Constraints. Cambridge: Cambridge University Press, pp. 113–28.Google Scholar
Costa, L. F. et al. (2005). O ouro cruza o Atlântico. Revista do Arquivo Público Mineiro, 2nd ser. 1, July–December, pp. 70–86.Google Scholar
Costa, L. F. and Rocha, M. M. (2009). Nas margens do contrabando: estrangeiros e comissários volantes no século XVIII em Portugal. In Macedo, J. B. et al. (eds.), Nove ensaios na tradição de Jorge Borges de Macedo. Lisbon: Tribuna da História, pp. 55–82.Google Scholar
Donovan, W. M. (1990). Commercial enterprise and Luso-Brazilian society during the Brazilian Gold Rush: the mercantile house of Francisco Pinheiro and the Lisbon to Brazil trade, 1695–1750. PhD thesis, University of Maryland.Google Scholar
Ensminger, J. (2003). Reputations, trust, and the principal–agent problem. In Cook, K. S. (ed.), Trust in Society. New York: Russell Sage Foundation, pp. 185–201.Google Scholar
Fisher, H. E. S. (1984). De Methuen a Pombal: o comércio Anglo-Português de 1700 a 1770. Lisbon: Gradiva.Google Scholar
Flory, R. (1978). Bahian society in the mid-colonial period: the sugar planters, tobacco growers, merchants and artisans of Salvador and Recôncavo, 1680–1725. PhD thesis, University of Texas at Austin.Google Scholar
Fragoso, J. L. (1998). Homens de grossa aventura: acumulação e hierarquia na praça mercantil do Rio de Janeiro, 1790–1830. Rio de Janeiro: Civilização Brasileira.Google Scholar
Furtado, J. F. (1999). Homens de negócio: a interiorização da metrópole e do comércio nas minas setecentistas. São Paulo: HUCITEC.Google Scholar
Furtado, J. F. (2008). O livro da Capa Verde: o regimento diamantino de 1771 e a vida no distrito diamantino no período da real extração. São Paulo: Annablume.Google Scholar
Garavaglia, J. C. and Marchena, J. (2005). America Latina de los origenes a la indipendencia: la sociedad colonial ibérica en el siglo XVIII, vol. 2. Barcelona: Critica.Google Scholar
Garcia-Baquero González, A. (1988). Cadiz y el Atlántico (1717–1778). Seville: Publicaciones de la Escuela de Estudios Hispano-Americanos de la Universidad de Sevilla.Google Scholar
Godinho, V. M. (1968). Portugal, as frotas do açúcar e as frotas do ouro. 1670–1770. In Ensaios II. Sobre história de Portugal. Lisbon: Sá da Costa, pp. 423–48.Google Scholar
González de Lara, Y. (2008). The secret of Venetian success: a public-order, reputation-based institution. European Review of Economic History 12, pp. 247–85.CrossRefGoogle Scholar
Granovetter, M. (1973). The strength of weak ties. American Journal of Sociology 78, pp. 1360–80.CrossRefGoogle Scholar
Greif, A. (1998). Cultural beliefs and the organization of society: a historical and theoretical reflection on collectivist and individualist societies. In Brinton, M. C. and Nee, V. (eds.), The New Institutionalism in Sociology. New York: Russell Sage Foundation, pp. 77–104.Google Scholar
Grootaert, C. (2004). Measuring Social Capital: An Integrated Questionnaire. Washington, DC: World Bank.CrossRefGoogle Scholar
Hancock, D. (1997). Citizens of the World: London Merchants and the Integration of the British Atlantic Community. New York: Cambridge University Press.Google Scholar
Hancock, D. (2000a). ‘A world of business to do’: William Freeman and the foundations of England's commercial empire, 1645–1707. William and Mary Quarterly 57, pp. 3–34.CrossRefGoogle Scholar
Hancock, D. (2000b). ‘A revolution in the trade’: wine distribution and the development of the infrastructure of the Atlantic market economy, 1703–1807. In McCusker, J. J. and Morgan, K. (eds.), The Early Modern Atlantic Economy. Cambridge: Cambridge University Press, pp. 105–53.Google Scholar
Hancock, D. (2005). The trouble with networks: managing the Scots’ early modern Madeira trade. Business History Review, 79, pp. 467–91.CrossRefGoogle Scholar
Jancsó, I. (2005). Independência; independências. In Jancsó, Istvan (ed.), Independência: historia e historiografia. São Paulo: HUCITEC, pp. 17–48.Google Scholar
Jensen, M. C. and Meckling, W. H. (1976). Theory of the firms: managerial behaviour, agency costs and ownership structure. Journal of Financial Economy 3, pp. 305–60.CrossRefGoogle Scholar
Jutting, J. (2003). Institutions and development: a critical review. OECD Development Centre. Working paper 20, July.Google Scholar
Knack, S. and Keefer, P. (1997). Does social capital have an economic pay-off? A cross-country investigation. The Quarterly Journal of Economics, November, pp. 1251–88.CrossRefGoogle Scholar
Labourdette, J.-F. (1988). La nation française à Lisbonne de 1669 a 1790: entre Colbertisme et liberalisme. Paris: Fondation Calouste Gulbenkian.Google Scholar
Lisanti, L. (ed.) (1974). Negócios coloniais: uma correspondência comercial do século XVIII. 5 vols. São Paulo: Visão Editorial.Google Scholar
Macedo, J. B. de (1982). A situação económica no tempo de Pombal. Lisboa: Morais Editores.Google Scholar
Magalhães, J. R. (2004). Império. In Lains, P. and Silva, A. F. (eds.), História económica de Portugal, vol. I. Lisbon: ICS, pp. 299–321.Google Scholar
Marzagalli, S. (2005). Establishing transatlantic trade networks in time of war: Bordeaux and the United States, 1793–1815. Business History Review 79, pp. 811–44.CrossRefGoogle Scholar
Mathias, P. (2000). Risk, credit and kinship in early modern enterprise. In McCusker, J. J. and Morgan, K. (eds.), The Early Modern Atlantic Economy. Cambridge: Cambridge University Press, pp. 15–35.Google Scholar
Maxwell, K. (1973). Conflicts and Conspiracies: Brazil and Portugal 1750–1808. Cambridge: Cambridge University Press.Google Scholar
McFarlane, A. (1993). Colombia before Independence. Economy, Society and Politics under Bourbon Rule. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Mendonça, M. C. (1960). O Marquês de Pombal e o Brasil. São Paulo: Universidade de São Paulo.Google Scholar
Moody, J. and White, D. R. (2003). Structural cohesion and embeddedness: a hierarchical concept of social groups. American Sociological Review 1, pp. 103–27.CrossRefGoogle Scholar
Moreno, J. (1934). Who Shall Survive? A New Approach to the Problem of Human Interrelations. New York: Nervous and Mental Disease Publishing Co.CrossRefGoogle Scholar
Morgan, K. (2000). Business networks in the British export trade to North America, 1750–1800. In McCusker, J. J. and Morgan, K. (eds.), The Early Modern Atlantic Economy. Cambridge: Cambridge University Press, pp. 36–62.Google Scholar
Morineau, M. (1985). Incroyable gazettes et fabuleux métaux (XVI-XVIII siècles). Paris: Editions de la Maison des Sciences de l'Homme; Cambridge: Cambridge University Press.Google Scholar
Moutokias, Z. (1988). Contrabando y control colonial en el siglo XVII. Buenos Aires: Centro Editor de America Latina.Google Scholar
Moutokias, Z. (1999). Contrabando y sector externo en Hispanoamérica colonial. In Carmagnani, M. C. and Romano, A. H. R. (eds.), Para una historia de América. Mexico: El Colegio de México, II, pp. 172–97.Google Scholar
North, D. (1990). Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
North, D. (1991). Institutions, transaction costs, and the rise of merchant empires. In Tracy, J. (ed.), The Political Economy of Merchant Empires: State, Power and World Trade, 1350–1750. Cambridge: Cambridge University Press, pp. 22–40.CrossRefGoogle Scholar
North, D. and Thomas, R. P. (1973). The Rise of the Western World: A New Economic History. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Ogilvie, S. (2004). The use and abuse of trust: social capital and its deployment by early modern guilds. CESIFO Working Paper, 1302.CrossRefGoogle Scholar
Oliva Melgar, J. M. (2005). La metrópoli sin territorio: crisis del comercio de Indias en el siglo XVII o pérdida del control del monopolio? In Shaw, C. M. and Oliva, J. M. Melgar (eds.), El systema atlântico español (siglos XVII-XIX). Madrid: Marcial Pons.Google Scholar
Padgett, J. F. and Ansell, C. K. (1993). Robust action and the rise of the Medici, 1400–1434. American Journal of Sociology 6, pp. 1259–319.CrossRefGoogle Scholar
Pedreira, J. M. (1995). Os homens de negócio da praça de Lisboa de Pombal ao Vintismo (1755–1822): diferenciação, reprodução e identificação de um grupo social. PhD thesis, Universidade Nova de Lisboa.Google Scholar
Pedreira, J. M. (2001). Brasil, fronteira de Portugal: negócio, emigração e mobilidade social (séculos XVII e XVIII). In da Cunha, M. S. (ed.), Do Brasil à Metrópole: efeitos sociais (séculos XVII e XVIII). Évora: Universidade de Évora, pp. 47–72.Google Scholar
Pijning, E. (1997). Controlling contraband: mentality, economy and society in eighteenth-century Rio de Janeiro. PhD Thesis, University of Maryland.Google Scholar
Pinto, V. N. (1979). O ouro brasileiro e o comércio anglo-português. São Paulo: Nacional.Google Scholar
Possamai, P. (2006). A vida cuotidiana na colónia do Sacramento (1715–1735). Lisbon: Livros do Brasil.Google Scholar
Pratt, J. W. and Zeckhauser, R. (eds.) (1985). Principals and Agents: The Structure of Business. Boston: Harvard Business School Press.Google Scholar
Price, J. (1996). The Great Quaker business families of the eighteenth-century London: the rise and fall of a sectarian patriciate. In Price, J., Overseas Trade and Traders. Aldershot: Variorum.Google Scholar
Ross, S. A. (1973). The economic theory and agency: the principal's problem. American Economic Association, pp. 134–9.Google Scholar
Russell-Wood, A. J. (1983). As frotas do ouro do Brasil, 1710–1750. Estudos Económicos 13, pp. 701–17.Google Scholar
Russell-Wood, A. J. (2000). Holy and unholy alliances: clerical participation in the flow of bullion from Brazil to Portugal during the reign of Dom João V (1706–1750). Hispanic American Historical Review 4, pp. 815–37.CrossRefGoogle Scholar
Russell-Wood, A. J. (2004). O Brasil colonial: o ciclo do ouro, c. 1690–1750. In Bethell, L. (ed.), História da América Latina, vol. II América Latina colonial. São Paulo: Editora da Universidade de São Paulo, pp. 471–525.Google Scholar
Sampaio, A. C. JucÁ de (2003). Na encruzilhada do império: hierarquias sociais e conjunturas econômicas no Rio de Janeiro (c. 1650-c. 1750). Rio de Janeiro: Arquivo Nacional.Google Scholar
Schwartz, S. B. (1973). Sovereignty and Society in Colonial Brazil: The High Court of Bahia and Its Judges (1609–1751). Berkeley: University of California Press.Google Scholar
Schwartz, S. B. and Lockhart, J. (2002) (Portuguese edition). Early Latin America: A History of Colonial Spanish America and Brasil. Rio de Janeiro: Civilização Brasileira.Google Scholar
Scott, J. (1991). Social Network Analysis: A Handbook. London: Sage Publications.Google Scholar
Simonsen, R. (1937). História econômica do Brasil: 1500–1820. São Paulo: Companhia Editora Nacional.Google Scholar
Stiglitz, J. E. (2000). Formal and informal institutions. In Dasgupta, P. et al. (eds.), Social Capital: A multifaceted Perspective. Washington, DC: World Bank, pp. 59–70.Google Scholar
Swetschinski, D. (2000). Reluctant Cosmopolitans: The Portuguese Jews of Seventeenth-Century Amsterdam. London: The Littman Library of Jewish Civilization.CrossRefGoogle Scholar
Trivellato, F. (2003). Juifs de Livourne, Italiens de Lisbonne, Hindous de Goa. Réseaux marchands et échanges interculturels à l'époque moderne. Annales, Histoire, Sciences Sociales 53, pp. 581–603.CrossRefGoogle Scholar
Van Doosselaere, Q. (2009). Commercial Agreements and Social Dynamics in Medieval Genoa. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Wassermann, S. and Faust, K. (1994). Social Network Analysis: Methods and Applications. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Watts, D. J. and Strogatz, S. H. (1998). Collective dynamics of small-world networks. Nature 393, pp. 440–2.CrossRefGoogle ScholarPubMed