"By their nature cities along coasts and rivers developed so they could be open to trade with each other. From the middle of the 13th century, and for some 300 years after, many settlements dotted along this route formed the prosperous Hanseatic League, a European trading confederation of market towns, before the rise of the nation state led to its dissolution.
The Hanseatic League is not well known, and today it lives on most prominently in the name of the German national airline Lufthansa, literally the 'Hansa of the skies', whose planes you can look out of – and down towards the Hanseatic cities – on the short journeys between mainland Europe and Britain. The letters HH on the number plates of cars in Hamburg stand for Hansestadt Hamburg: another proud little memory of this hidden history.
The League is most easily understood as a loose federation of cities that acted together in self-interest to promote trade. The Hanseatic cities developed their own legal system, and their armies came to one another's aid. Merchants who wanted to buy and sell and travel were taking the lead at a time when nation states were not fit for purpose: in the case of England or Denmark, leadership was too centralised and authoritarian, while in German-speaking lands a nation had yet to be formed.
We think of nations today as elemental almost, immovable. Yet look at any city of Mitteleuropa and you'll see the many different names it has had as borders and regimes have shifted with the sands of time. Nations come and go. Cities endure.
"It is often said that great cities survived great empires," says Cristina Ampatzidou, editor-in-chief of the Rotterdam-based online publishing platform Amateur Cities. "So it is not unrealistic to think of cities as discrete entities that compete and collaborate with each other, independently from the states to which they belong."
The cities involved in the Hanseatic League are found along the Baltic and North Sea coasts, and slightly inland too. The League stretched from Novgorod in the east – in what is now Russia – to London in the west. Tallinn, Riga, Gdańsk, Visby, Berlin, Cologne, Antwerp, Stockholm, Bergen, Kiel, Rostock, Dinant, Bruges, Turku, Groningen, Hanover, Wroclaw, Kaliningrad: all were involved at different stages in the Hanse's history, which ran on into the 1500s.
The League covered lands that today find themselves a part of the modern nations of Finland, Sweden, Poland, the Netherlands, Belgium, France, Norway, Lithuania, Estonia and Latvia. It was a huge – and hugely ambitious – undertaking in the days when communications consisted of ink and paper and the only viable method of travel was by ship. Wood, fur, wool, silver, herring, cod and salt were the main items traded. But what was also exchanged was knowledge. In some ways it was an exercise in what we today call 'soft diplomacy'. There was no maniacal ruler overseeing things – merchants met and talked. They raised armies and waged war against kings who threatened their businesses and their freedoms and their peace.
There was a kind of proto-democracy at work. Professor Rainer Postel, of the Bundeswehr Universität (Germany's equivalent of Sandhurst military academy), has described the Hanse as "a community of interests without power politics". As David Abulafia, Professor of Mediterranean History at Cambridge points out, "The lack of an elaborate superstructure was one of the things that made the Hanse work. Having said that, one should recognise that Lübeck in particular dominated the League for long periods."
Lübeck was where the merchants most often met; and where renewed recent interest in the Hanse eventually led to Angela Merkel cutting the ribbon at the brand new European Hansemuseum in the city last year."
Excerpted from Mark Frazier:
Origins and Growth of the Hanseatic League
Threats abounded in the Baltic and the North Sea during the twelfth century. Merchants attempting to travel on sea or land regularly came under threat from robbers, pirates, feudal lords, and tribal monarchs. Local rulers across Northern Europe often were bent on confiscating goods or exacting tributes. Merchants who tried to travel alone were fair game.
In response, they began to organize convoys or troops—“Hanse” in Middle Low German—on trade routes across the region. As losses to robbers and pirates fell, merchants grew more prosperous. Negotiated agreements with local rulers also conferred a measure of security for storage and movements of goods. One local lord in Northern Germany, Henry the Lion, exempted the merchants in Lübeck—a recently-established town with excellent access to the Baltic—from paying taxes throughout his realm.4 Another boost came in 1181, when the Holy Roman Emperor, Barbarossa, designated the new town as a free and Imperial City. This interim legal standing was reaffirmed by Emperor Frederick II in 1226, giving Lübeck an enduring shield to ward off the attentions of revenue-seeking nobles, and to effectively become a self-governing community. Merchants of Lübeck used the municipality’s status as a free city to negotiate trade agreements with the autonomous counterpart cities of Hamburg and Bremen, whose policies were also largely shaped by merchant guilds. Their agreements to remove barriers to trade and to standardize weights and measures, including precious metal content in coinage, gave a boost to profits and helped spread Hanseatic trade across the Baltic and beyond.
In the largely Slavic-populated regions to the East, merchants from Hanseatic cities established new trade centers open to all guild members in good standing from their respective communities. These commercial outposts were often set up in the wake of conquests by Teutonic Knights determined to extend Christianity at swords’ point. Yet for the larger areas surrounding the Baltic, as well as for those with ports on the North Sea, Hanseatic merchants spread a network of low-tax or tax-free trade zones through negotiated agreements with local authorities, rather than through military means. The appeal of trade relationships, and the negotiating skills and gifts of Hanseatic merchants, convinced many local rulers to designate areas for Hanseatic guild members to do business without imposing onerous taxes or arbitrary regulations. From the thirteenth to fifteenth centuries, the network of Hanseatic trade outposts grew to as many as 170 communities, ranging from Novgorod in Russia, to London in England, and Bruges in Belgium.
These zones enabled Hanseatic merchants to readily import grains, wax, fish, metal ores, and other raw materials from areas around the Baltic, and exchange them for textiles, apparel, and manufactured items produced in the Western European cities affiliated with the League.8 Their success in long distance trade prompted new communities to join. It also inspired youths to enter into years of challenging apprenticeships to absorb Hanseatic skills and culture and earn their way into full-fledged membership in the guilds of their respective cities. Once accepted, they were free to independently do business with other members and become co-owners of cargos and vessels.
Town-based merchant guilds were at the center of Hanseatic economic and social activity. Historian Justyna Wubs-Mrozewicz has summarized them as “non-hierarchical, bottom-up organizations of traders . . . [where] membership was voluntary, based on equality among all members and sealed by an oath.”9 The basic rule for guild members was to “help each other in plight.”10 Members strove to stay in good standing with their peers by exchanging useful information, keeping promises and fostering relationships based on honest trade, and using informal systems to resolve internal tensions and conflicts.
Hanseatic scholar Margrit Schulte Beerbühl has described the Hanseatic League as a:
- [L]ate-medieval network of economically largely independent long- distance trade merchants which was based on trust, reputation and reciprocal relations. The informal cooperation among its members kept transactional, informational and organizational costs low, allowing the Hanse merchants to make good profits from the long-distance trade between the Baltic and the North Seas.
Another German economic historian, Alexander Fink, has argued that the Hanse, overall, can be understood as a confluence of functionally overlapping and competing jurisdictions, whose fluidity enabled members to interact and adapt to circumstances faster than hierarchical political structures.
Legal advances contributed to the growth of Hanseatic commerce. The town of Lübeck, whose governing council remained dominated by merchants, set new standards for procedural laws regarding trade, contracts, and dispute resolution. “Lübeck Law” grew to be widely admired and was adopted in whole or in part by other Hanseatic communities.13 Over time, merchant customs as practiced in Lübeck and other Hanseatic cities came to be codified as elements within the branch of private international law known as Lex Mercatoria, or merchant law.14 The impartiality of Lübeck’s arbitration services also contributed to the city’s enduring place as the de facto leader of the Hanseatic League.
To expand their markets, the Hanseatic League cities honed diplomatic skills over four centuries. Their tactics included making gifts and strategically timed loans to rulers in return for tax-free trading privileges. Loans from Hanseatic merchants were vital to the success of various English monarchs. In 1317, King Edward II reaffirmed that Hanseatic merchants would be free of taxes, trade regulations, and travel restrictions applied to other foreign traders. As historian T.H. Lloyd noted, “[n]ot only did Edward II confirm the grants of his predecessors and his own award of immunity from arrest but, for the first time, he conceded that neither he nor his heirs would place new impositions on the Hanse without its consent.” (English merchants, by contrast, had to pay certain taxes from which their Hanseatic competitors were exempt.) Trade monopolies negotiated by the League with many rulers in Scandinavia went even further by securing agreements that denied or severely limited their competitors’ access to key markets. In Norway, Sweden, and other areas, local rulers acceded to the League’s demand to ban or restrict other foreign merchants from doing business in highly profitable commodities.
Boycotts were the League’s means of choice for punishing countries and cities that moved to break agreements with Hanseatic merchants. When negotiated trade concessions came under threat or merchant cargos were confiscated without cause, the League called meetings of member cities to vote on imposing trade sanctions upon the offenders.19 Throughout much of the League’s history, such measures proved highly effective in reaffirming the trade privileges and securing restitution for damages. Participation in boycotts was voluntary on the part of Hanseatic communities. No political authority existed in the League to force member cities to abide by the majority decision.
However, the majority could and often did punish communities that took action contrary to the League’s decisions, through expulsion (or “unhansing”).20 In this case, merchants of the ostracized community lost access to the favorable commercial agreements and trade outposts negotiated by the League, to the benefit of the League’s protective services, and to any right to do business with Hanseatic merchants in good standing. In cases where individual members of Hanseatic guilds abrogated an agreement, hearings would be held by guild appointed arbitrators, or by local courts in the Hanseatic cities. Any members who were found in breach of the local guild’s code were expelled from the guild—and similarly unhansed across the League.
These measures were sustained despite the exceptionally ambiguous legal and political character of the Hanseatic League. England’s King Edward IV, under pressure from English merchants who chafed at the concessions given by his predecessors to the Hanseatic traders, imprisoned Hanseatic merchants and expropriated their goods in retaliation for the League’s suspected collusion with Danish privateers to stop English attempts to trade in the Baltic.22 As summarized by Professor Rainer Postel of Bundeswehr University, King Edward IV justified his action on the ground that the League was “a society, cooperative or corporation, originating from a joint agreement and alliance of several towns and villages, being able to form contracts and being liable as joint debtors for the offences of single members.”23 Lübeck sharply disagreed. In Postel’s account, Lübeck maintained that the Hansa was neither a society nor a corporation on the grounds that it: [O]wned no joint property, no joint till, no executive officials of their own; it was a tight alliance of many towns and communities to pursue their respective own trading interests securely and profitably. The Hansa was not ruled by merchants, every town having its own ruler. It also had no seal of its own, as sealing was done by the respective issuing town. The Hansa had no common council, but discussions were held by representatives of each town. There even was no obligation to take part in the Hansa meetings and there were no means of coercion to carry through their decisions. So, according to the Lübeck syndic [advocate], the Hansa could not be defined by Roman law and was not liable as a body. This was in fact correct and deliberately ambiguous; the Hansa was frequently urged to give a self-definition as well as the exact number of its members and deliberately left all this unclear.
When Edward IV refused to free the Hanseatic merchants he had imprisoned and declined to restore their property, the League launched a boycott and assembled a powerful naval force in the Anglo-Hanseatic War.25 The war ended in 1474 with a decisive victory by the League, which had crippled English commercial shipping. The Treaty of Utrecht confirmed restoration of the London Steelyard as a tax-free base for Hanseatic merchant guilds and brought about a virtual halt to English trade in the Baltic region.
Reasons for the League’s Demise
Although the Hanseatic League had done much to create policies for its member merchants to prosper, challenges worsened as the sixteenth and seventeenth centuries unfolded. Some of these were self-inflicted. Agreements among members of Hanseatic guilds—originally focused on setting standards for weights and measures, on the precious metal content of coinage, and on the quality of traded goods—mutated into complex requirements to restrict entry into the guilds, to fix prices, and limit supply of monopolized goods to drive up prices.27 While such moves benefited incumbent merchants in the short term, they also discouraged, over time, the entry of new members into Hanseatic merchant guilds.
A larger reason for the erosion of the League was a rising resentment of one-sided tax and trade concessions. Hanseatic guilds were unwilling to open their membership to foreign merchants, or to allow open trade by foreign merchants with the League’s member cities.28 With the exception of Dinant, a small town with strong economic ties to Cologne, the League excluded all non-German speaking guilds from joining. Hanseatic insistence on exclusionary entry policies blocked merchants of non-German origins from access to a network of highly profitable tax-free trade concessions. The discrimination was also often backed by municipal ordinances in towns where Hanseatic merchants dominated town councils.29 As economic historian Erik Lindberg has written of two leading Hanseatic communities (Lübeck and Danzig):
The infamous ‘guest-rights’ legislation in the Hansa towns prohibited trade between non-Hanseatic merchants in the Hansa towns. Restrictions on the periods when foreigners were allowed to stay in the towns represented another cornerstone in the prohibitive legislation that characterized Hansa mercantile practices . . . . The long-term results for the two cities under scrutiny were stagnation and an increasingly marginal position in the European urban network.
Foreign rivals in response stepped up their forays into the North Sea and the Baltic. Merchants from Holland and England, who long had been shut out of trading opportunities with cities in the Hanseatic trade network, grew especially bold as the Treaty of Utrecht fell into disregard. They did so by forging commercial links to communities that had left the League or were tenuously associated with it, by encouraging privateering and piracy against Hanseatic ships, and by deepening relationships with increasingly powerful monarchs across the region who had grown weary of Hanseatic trade monopolies.
Holland dealt a further blow to the privileges of Hanseatic merchants. Instead of negotiating trade agreements that favored one foreign partner over another, Dutch cities began to experiment with introducing more open systems. Rulers of these cities, as described by Cambridge historian Sheilagh Ogilvie, discovered that wealth grew far faster by establishing generally welcoming environments for businesses, rather than setting rules that favored particular blocs of foreign merchants.32 The rising Dutch cities of Amsterdam and Antwerp, in particular, became known for their embrace of open trade and immigration policies, as well as religious pluralism.33 Their openness to free trade drew an influx of entrepreneurial talent, investors, and traders that eclipsed those of the leading Hanseatic cities, including Lübeck, Hamburg, and Bremen.
As Dutch cities were confirming the value of open trade policies, English rulers again moved to overturn long-standing agreements that privileged merchants of the Hanseatic League. Queen Elizabeth of England, in 1598, ended all Hanseatic trade preferences and closed the Steelyard in London, where German merchants had owned and operated a tax-free zone for centuries.35 Although the Steelyard site was returned several years later to Hanseatic guilds, merchants operating there henceforth no longer enjoyed special freedoms from taxation.36 A further setback followed a few decades later with the signing of the Treaty of Westphalia in 1648.37 The Treaty brought to an end the religious wars that had consumed much of Europe, affirmed the boundaries of newly powerful nation states, and enshrined their respective rights to control communities and economic activity within their borders.
The commercial ascendency of free and highly autonomous Hanseatic cities was coming to a close. By the mid 1600s, only a small number of Hanseatic cities actively identified as members of the League. They held their last general meeting in 1687. Over the course of the following centuries, although they continued to identify as Hanseatic cities, the League’s flagship communities of Lübeck, Bremen, and Hamburg were politically absorbed as states of Bismarck’s Germany.
Europe’s newly sovereign nation states, meanwhile, were growing eager for overseas territorial and commercial gains.
Merchant guilds of England—beginning with the Merchants Adventurers, which had originally been formed to counter Hanseatic League successes, and its successors, including the East India Company—established foreign trade outposts and consolidated colonies overseas.39 Applying the free trade concepts advanced by Adam Smith, British trading companies and colonial administrators planted seeds in the 1800s for prosperous new freeports and tax-free trade zones in Singapore, Hong Kong, and Aden in the Middle East. These, like the Dutch open cities before them, became flourishing havens for commerce."
- J.D. COLVIN, THE GERMANS IN ENGLAND: 1066-1598 (1971);
- PHILIPPE DOLLINGER, THE GERMAN HANSA (1970);
- GEOFFREY PARKER, SOVEREIGN CITY (2004);
- T.H. LLOYD, ENGLAND AND THE GERMAN HANSE (1991);
- HELEN ZIMMERN, THE HANSA TOWNS (2016).