THE DARK SIDE OF AGGLOMERATION, SUSTAINED WEALTH AND TRANSPOSITION OF TRADING INSTITUTIONS

The present paper explores a historical case of a location where a group of merchant families established powerful positions over many generations, involving both the international trade of fine wine and human beings sold as slaves. These families lived in Bordeaux, one of the largest trading centers for trade of enslaved humans in the world in the late 18th and early 19th centuries. These trading families were concentrated in a few quarters of the city, and most of the leading merchants were active in both lines of trade. More importantly, this paper shows that three of the key trading institutions, namely practices defining ‘product quality’, product classes and how prices were set, were remarkably similar in both fields of trade. This, in turn, facilitated a smooth and successful substitution of trade from enslaved humans into fine wine when abolition was imposed in the early 1800s. Overall, a story of the darker side of agglomerations is revealed. This study facilitates a new theoretical understanding of how wealth and prosperity can be secured over long time periods, through transposition of institutions between fields, and driven by forces of proximity.

1. Introduction

The current paper provides a historically informed theoretical narrative (MacLean et al., 2016) over a hitherto less known historical process of transposition of institutions, which enabled a limited number of merchant families in Bordeaux to secure prestige, power and wealth over many generations. In our case, transposition involved a very dark element, namely, the trade of human beings sold as slaves during the 18th century and into the 19th century. By transposing trading institutions in the form of business practices, sometimes codified into documented rules, a smooth and successful substitution of trade was facilitated. The rules in question regulated classes of ‘quality’ of a certain wine or enslaved human based on source of origin, a limited number of fixed ‘quality’ classes and the associated pricing mechanism.

During the early 19th century, at a time when France had lost its most important colony St. Domingue (currently Haiti) and the abolition movement grew in Europe, the traders of Bordeaux, being one of the larger trading depots for the slave trade in the world (Saugera, 1995; Geggus, 2001), faced immense pressure to shift from colonial commerce involving the trade of enslaved humans, into trade of something else, which turned out to be wine from the region. Through this shift these merchant families continued to thrive and accumulate wealth (see Figure 1). In fact, they were so skilled in this that now, centuries later, many of these merchant families that emerged in the 18th century still hold leading positions in fine wine and other trades, and many streets in the city are named after them. A report from the Bordeaux Chamber of Commerce in the late 19th century (Malvezin, 1892b), describing the period of 1814–1830, stated: ‘To recover its ancient splendor, Bordeaux was to seek to fill the immense void created by the loss of St. Domingue by seeking new outlets to enlarge its old European market for wines and eaux-de-vie’ (author’s translation).

Title Page———i

Certification——–ii

Dedication———iii

Acknowledgement——-iv

Abstract ———vi

Table of Content——–vii

Chapter One

1.0 Introduction ——-1

1.1 Statement of Problem——4

1.2 Purpose of the Study——5

1.3 Significance of Study——8

1.4 Limitation——–9

1.5 Scope of Study——-11

Chapter Two

2.0 Review of Related Literature —-12

2.6 Summary of Literature Review—- 19

Chapter Three

3.0 Research Methodology and Procedure—22

3.1 Population ——–22

3.2 Sample and Sampling Technique—-22

3.3 Validation of the Instrument —-23

3.4 Reliability of the Instrument —–23

3.5 Data Analysis——-23

Chapter Four

4.0 Presentation and Discussion of Result—24

4.1 Analysis and interpretation of Data—25

4.2 Discussion of Results——38

Chapter Five

5.0. Summary, Conclusion, and Recommendation  –40

5.1 Summary——–40

5.2 Conclusion——–41

5.3 Recommendation——42

References ———45

Appendix 1——–47

Appendix ———50