The Ledger That Built the World

Free sample — the opening of Chapter 1, Before the Balance. The complete book (89 pages, 10 chapters) comes as DRM-free PDF + EPUB with purchase.

Chapter 1: Before the Balance

The boxes are grey and acid-free now, but the paper inside is six hundred years old. In the Archivio di Stato in Prato, a small Tuscan town twenty minutes from Florence, a reading room holds what no other place on earth can offer: the nearly complete paper trail of one medieval businessman. Roughly 150,000 letters. About 500 account books. Some 300 partnership agreements, along with insurance policies, bills of lading, cheques, and price lists. All of it belonged to Francesco di Marco Datini, a merchant of Prato who died in 1410 and who ordered, in his will, that his papers be preserved.

They very nearly weren’t. For centuries the sacks of letters sat forgotten in a stairwell recess of Datini’s own house, the palazzo he built on what is now Via Ser Lapo Mazzei. They were rediscovered in 1870, and it took scholars decades more to grasp what they had: not a chronicle written for posterity, not the self-flattering memoir of a prince, but the raw working residue of trade itself. Orders and complaints. Exchange rates and shipping delays. A partner in Barcelona worrying about pirates; a wife in Prato worrying about her husband’s soul.

Open one of the great ledgers and the first thing you see, written at the head of the page in the clerk’s careful hand, is the firm’s motto: Col nome di Dio e del guadagno. In the name of God and of profit.

That sentence is the whole late fourteenth century in seven words. Profit was real, pursued, and slightly suspect — hence God’s name set in front of it like a shield. And profit was written down. That is the part that matters for this book. Datini’s papers survive because Datini’s business ran on paper, and his business ran on paper because by his lifetime, trade had outgrown the human memory.

This chapter is about the world just before the balanced ledger — and about the problem, felt in the fingers of every merchant from London to Alexandria, that double entry was about to solve.

The memory economy

For most of human history, most debts lived in heads. A farmer knew what he owed the miller. A village remembered who had borrowed whose ox. Memory, backed by witnesses and oaths, was the original accounting system, and for face-to-face trade it worked well enough.

When memory needed help, people notched it into things. The most famous helpers were tally sticks: lengths of wood scored with cuts to record a sum, then split down the middle so that debtor and creditor each held half. The grain of the wood ran through both halves; fit them back together and the notches aligned, so neither party could quietly add a cut. The English Exchequer ran the kingdom’s tax records on tallies for more than six centuries. Parliament finally abolished them in 1826, and in 1834 the accumulated sticks were burned in the furnaces beneath the House of Lords — so enthusiastically that the fire escaped the flues and burned down the Palace of Westminster. The old accounting technology destroyed the building on its way out.

A tally is honest but stupid. It records one fact: A owes B this much. It cannot say why, or since when, or whether the debt relates to any other debt. It is a receipt, not a record.

The merchants of medieval Italy needed more, and by the thirteenth century they were producing it: the ricordanze, the merchant’s memorandum book. These were diaries of business — part account, part journal, part family chronicle. A merchant noted what he had bought, what he had lent, what a debtor had promised, sometimes on the same page where he noted a daughter’s dowry or a neighbor’s death. The entries ran in the order life delivered them. Historians call this single entry: each fact written down once, as prose, in sequence.

Here is what a single-entry memorandum of the kind this book will follow might have looked like. Take one bale of fine Cotswold wool — English wool was the best in Europe, and Italian buyers paid for it accordingly — bought by a merchant’s agent in London and destined for sale in Venice. The memorandum reads, in effect:

Bought of John the stapler, one bale Cotswold wool, £6 sterling, paid part in cash, rest owed to him at Easter. Carriage to the coast, 4 shillings. Freight and duties to come. God see it safe to Venice.

Every word of that is useful. And we will spend the rest of this chapter discovering that it is almost useless.

Where single entry breaks

A memorandum book answers one question well: what happened? Read it front to back and you get the story. The trouble starts with any question that cuts across the story — and the commerce of the fourteenth century asked such questions constantly.

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