Business Failure and Civil Scandal in Early Modern Europe

Abstract

The failure of one of the most prominent German merchant-banking houses of the early sixteenth century, Ambrosius and Hanns, the Brothers Höchstetter, and Associates, serves as the point of departure for an exploration of why early modern merchants failed and what the consequences of failure were. This single example illuminates a variety of issues: state engagement in commerce and finance; legal development of bankruptcy procedures; economic strategies against failure and scandal. It reveals the limits of modern economic theories of economic crisis and development.

Financial fraud, scandals, and regulation: A conceptual framework and literature review

“…But in his very sparsely annotated book, this author does not inform us what the stock salesmen told the (mainly unsophisticated) investors about the financial prospects of the company, whose storesrapidly expanding in number since its founding in 1919 -never became profitable. The analytical relevance of an eye for the vital details is also illustrated by the following example of how contemporaries in the German city of Augsburg (probably) differed in their moral evaluation of the practices of the merchant banker Ambrosius Höchstetter in the 1520s and 1530s (Safley, 2009). The cited study suggests that fellow Augsburg merchants might have considered Höchstetter's 'sharp practices' as 'good business' , while the civic authorities branded his behaviour a violation of 'due order' .…”

What causes organizations to fail? A review of literature to inform future food sector (management) research

“…An example of the benefits of food business clusters associated with a university can be found in Food Valley at Wageningen which links food business with research centres of excellence (Omta W. & Fortuin, 2013). However, the probability of some organizations failing is greater if the business is surrounded by other organizations that have also failed (Maté-Sánchez-Val, López-Hernandez & Fuentes, 2018) and if the business is near to non-cooperative competitors (Safley, 2009;Nilsson, 2016).…”

“…However, government decisions to enable a more liberal economy can increase the rate of organizational failure. This results in new competitors entering a regional/local market, who may introduce new and innovative technologies that decrease production costs, and as a consequence lower prices intensifying competition (Safley, 2009;Amankwah-Amoah & Debrah, 2010;Madrid-Guijarro, García-Pérez-de-Lema & Van Auken, 2011;Gok, Deshpande, S., Deshpande, A. P., & Hunter, 2012;Pardo & Alfonso, 2017). Fake rumors relating to the organization circulated by others are difficult to reverse, and negative consumer perceptions or experience associated with faulty or contaminated products will affect organizational survival (Amankwah-Amoah, Antwi-Agyei & Zhang, 2018).…”

GOING BUST: Some Reflections on Colonial Bankruptcies

“…5 In a similar vein, Thomas Safley focused on microhistorical aspects of bankruptcy cases to offer insight into their impact on various aspects of economic and social life, while also stressing the role of human agency in enterprise failure. 6 His recently edited volume of essays, the focus of which ranges from the microeconomics of bankruptcy and its impact on business organizations and practices to a more institutional approach designed to capture changes in bankruptcy laws, represents a significant contribution to filling the gap in knowledge on early modern bankruptcies. 7 Albrecht Cordes and Margrit Schulte Beerbühl subsequently picked up on Safley's methodological suggestions and transformed his microanalytical methodology into a multidimensional and dual system.…”