Trading money and empire building in Spanish Milan (1535-1640)

This essay delves into the deep relationship between trading money, his thinking and the economic trend in the State of Milan during the Spanish dominion, in order to point out that Habsburg political governance created an environment which may have fostered growth particulary by embedding trust into financial contracts. In the first part, through notary contracts and other original administrative documents, the research traces the development of credit and financial market which led productive sectors to improve their performances; the role that innovations like factorías or commandite companies and securities market played in the stimulation of supply, is widely explored and documented. In the second part, it focuses on the process of legitimacy of the interest rates, which involved the whole Milanese society. Such a process mirrored the progressive theoretical changes of the local religious institutions, of the civil authorities and of the mercantile world. Eventually the paper highlights the settlement of an informal ‘social’ frame, due to the branching alliances between the native ruling class and the Spanish monarchy - which promoted the development of the Milanese financial market. This provides us with one more argument against the New Institutional Economics narrative concerning the absolute economic inefficiencies of the Spanish institutions, compared to the Anglo-Saxon ones