There are many ways to deploy the term ‘market’ in a medieval setting, and a good starting-point is the physical reality of places where goods were bought and sold. The sociology of these places helped determine their character: a mix of ethnic and religious groups, wealthy people alongside much poorer ones (who might only be present as porters and servants, or even slaves). What price one paid was determined by forces that were not simply ordinary ones of supply and demand. Particularly in places where a number of stalls sold the same produce, not just differences in quality but personal relationships led buyers to choose particular sellers with whom they might well expect a discounted price; this phenomenon can still be witnessed in the spice markets of Cairo, Jerusalem or Istanbul where sellers of apparently identical goods cluster together, but buyers know whom to patronise.

Other factors could also come into play. In the bazaars of Constantinople, buyers and sellers are said to have engaged in arcane and angry theological debates about whether the Son was co-existent with or proceeded from the Father, before a purchase could be made. Ordinary Byzantine Greeks knew, or thought they knew, their Trinitarian theology. To mention these aspects of how medieval markets operated is simply to stress (as some contemporary economists do) that economic behaviour is not necessarily rational, at least in the sense that we normally understand the term.

In western and northern Europe during the early Middle Ages, roughly between the 8th and the 11th centuries, markets were places of connection, often situated at intermediary positions between centres of production such as textile workshops and centres of consumption such as princely courts. These intermediary positions might also be situated in areas where there was indeterminate jurisdiction, enabling those who controlled the market a degree of freedom in arranging the conditions under which goods could be put on sale.

These markets might lay down roots from which towns developed, though urbanisation was generated by all sorts of factors: defensive positions might attract a growing population, whether to service the needs of those living in a castle or to take advantage of its protection; the expansion of bureaucracy by ambitious rulers might create a settlement around a palace; holy places – for instance monasteries, perhaps containing highly esteemed relics – might also become the focus of lay settlement, generating a lively industry in mementoes for sale to pilgrims. These developments all stimulated markets into existence, the great majority of which dealt predominantly with local goods, particularly necessities such as staple foodstuffs (primarily grain), dairy goods, fish (if available) and local beer or, mainly in southern Europe, wine, as well as agricultural tools and simple textiles.

Places by the sea provide some of the most interesting, complex and precocious examples of medieval market-places because they tended to attract long-distance as well as local trade, both within the Mediterranean and within what has been described as ‘the Mediterranean of the North’, the Baltic and the North Sea. Goods could be moved more quickly over long distances by sea than overland, and the risks were often lower. In the Baltic and the North Sea we can observe beach markets in the early Viking period (from the late 8th century onwards), although these had existed in some form from time immemorial. Trading, along with raiding, may have become more intensive with the appearance of the Vikings, but they had predecessors, also skilled in boat-building and navigation, who maintained contact between Anglo-Saxon England, with its plentiful supplies of wool, and northern Europe.

Most notable among these predecessors were the Frisian merchants who established a number of bases on higher ground amid the marshlands of northern Germany and the Netherlands, such as the settlement at Dorestad, whose silver coins carry images of Frisian boats. Next to the Baltic, Wollin, now close to the border between Germany and Poland, acted as a bridge between the increasingly prosperous lands of the German kingdom and the still largely pagan lands further east – indeed, most of its own inhabitants appear to have been pagan until the 12th century. Its praise was sung in extravagant terms by the late-11th chronicler Adam of Bremen, who described it as ‘truly the largest of all the cities that Europe has to offer’. It apparently stretched along the River Oder for four kilometres and traded in every direction, including towards Lake Mälaren, although Wollin went into decline by 1200. Despite the praises of the German chronicler, it should not be imagined as an imposing city of stone and brick but as a collection of buildings constructed out of wood and thatch.

Within the Viking world, with its array of islands and inlets, the beach markets, temporary, seasonal affairs, provided the core from which larger mercantile settlements emerged, the first permanent towns in Scandinavia: Birka on Lake Mälaren, west of Stockholm; Kaupang (meaning ‘market’ – its original name is uncertain) in Norway; and Hedeby (Haiþabu), now within Germany but for long Danish, and nicely situated to service trade across the narrow waist of Schleswig.

These centres were supplied by goods seized in Viking raids as well as by honest commerce. Hack-silver took preference over coin, though coinage from Hedeby has turned up in excavations at Birka, and large amounts of silver coinage from Iraq and Iran reached the Viking world via routes that crossed the Caspian or the Black Sea, and enabled merchants to use the dense networks of rivers to travel past the capital cities of the Rus, at Kyiv, and of the Turkic Khazars, at Itil, whose site is now buried beneath centuries of accumulated silt in the mouth of the Volga. Goods certainly reached Viking Scandinavia from very far away, as the famous example of a small statuette of the Buddha reveals; and in the other direction Baltic amber was prized as far away as Constantinople and Persia.

These centres too declined by the 12th century, possibly because new political rivalries, that also engulfed Wollin, led to a shift in the location of prime market-places to new centres such as Visby on the island of Gotland and Lübeck to the east of Hedeby, which were able to service demand for furs, wax and other forest products in the expanding cities of the increasingly powerful German kingdom.

Seasonal fairs still had their uses in late-medieval Scandinavia, most famously the Skåne fairs, which from the thirteenth to the early fifteenth century traded in the herrings that in late August, September and early October literally filled the sea off the coast of what is now southern Sweden. Exactly where they chose to spawn changed from year to year, so the fair moved up and down the coast of Scania until, for reasons that are still debated, the herrings made a break for the North Sea and fishing in Scanian waters became less profitable. Another example of seasonal trade, linked this time to a town, and indeed capital city, Bergen, can be identified in Scandinavia during the same period. The Norwegian king placed limits on the right of Hanseatic merchants to export dried codfish at certain times of the year, unless they brought grain to the city. Local deficiencies could be brought under control by careful manipulation of the market on the part of the ruling power.

What were perhaps the greatest fairs of the central and late Middle Ages were held inland, in Champagne and in Flanders, and yet they too were closely related to the demands of maritime trade. The Champagne fairs welcomed merchants from the Italian towns, including the great port of Genoa, and provided the Mediterranean world with large quantities of high-grade woollen textiles, among other goods. Over time, as the Flemish cloth towns became the focus of a rival cycle of fairs, the Champagne fairs became a clearing house for payments, and were less involved in the actual transfer of goods. This stimulated ever greater sophistication in the types of financial instruments that were deployed, such as letters of credit and early forms of cheque, which obviated the need to transport large quantities of bullion across the European landmass, always a hazardous process.

The Flemish cloth towns drew extensively on supplies of fine English wool, while the English kings recognised the great value of this commodity to their purse, and established a staple – a port through which it must pass and be taxed – at Calais. Here too Italian intermediaries played an important role, offering banking services on an unprecedented scale and facilitating the smooth flow of goods across the English Channel in return for royal protection (which tended to break down, as the examples of the Ricciardi of Lucca and the Bardi and Peruzzi of Florence were to prove).

England also possessed large-scale fairs such as the Stourbridge Fair, held just outside Cambridge. At its peak it was possibly the biggest in Europe, and it benefited from a privilege granted by King John in 1199. This king, normally so careful to collect every penny he could, forbade taxes to be levied on transactions at the fair, which concentrated on wholesale, dealing in high-demand primary products such as salt and timber. Textiles were also traded there, as was wax, which should be classed as a semi-luxury, since much was imported into Europe from as far away as North Africa and the Black Sea, to satisfy heavy demand for beeswax candles, wax seals and so on.

The influx of German merchants into the Baltic during the 12th century accelerated the urbanisation of the region. Among German foundations was Stockholm, while Visby became a major centre of operations of the ‘merchants of the Roman Empire’, as the early Hansa traders grandly described themselves. Temporary visitors from the north German towns, who came to buy furs from travelling Russian merchants, were supplemented by German settlers in Gotland, whose Church of St Mary remains the most prominent church in Visby. Meanwhile Lübeck increasingly claimed leadership of the German mercantile community in the Baltic; it was poised on the edge of areas that were still to some extent pagan, and its merchants along with German colleagues from the incipient Hanseatic League helped found new commercial centres along the southern Baltic coast, notably Riga, work in which the crusading military Brotherhood of the Sword and in due course the Teutonic Knights were also closely involved. The attraction of goods from the eastern European interior, particularly furs and wax, continued to grow, but the Hansa merchants also dealt in large quantities of rye produced on the lands of the Teutonic Knights and, as has been seen, fish.

Developments in the Mediterranean and the Black Sea were not vastly different. Indeed, the Vikings – or, as the Swedish Vikings are often called, the Varangians – created a route down the Don and established a trading station by the Black Sea, at Tmutarakan or Matracha, close to the Kerch Strait that comes down from the Sea of Azov and runs past Crimea. This provided them with a mid-point on the route to Constantinople, their visits to which were carefully monitored by the Byzantine authorities, and limited to commercial activities such as the sale of furs, wax and slaves. In later centuries this broad area became the focus of Genoese and Venetian trade, with active markets in grain, wax, fish (including sturgeon flesh and caviar) as well as Circassian and Tatar slaves, all exported through the Genoese base at Caffa in Crimea, and the Venetian base at Tana close to the mouth of the Don. The Genoese also benefited from the opportunity to create their own base in a suburb of Constantinople, at Pera-Galata, where the Genoese tower still looms over the Golden Horn. By the fourteenth century the Genoese in Pera were handling much the greater part of the trade of Constantinople, whether to meet local demand for grain and other Black Sea products, or to forward grain all the way to the mother-city in Italy.

Constantinople illustrates the evolution of merchant colonies, enclaves that either operated their own markets or supplied markets within the city from the stocks they accumulated. By the late 11th century the Venetians possessed wharves and warehouses alongside the Golden Horn; they were also granted the right to trade throughout the Byzantine Empire free of tolls, though they appear to have been excluded from the Black Sea. Particularly important in the creation of mercantile networks within the Mediterranean was the creation of fondachi or fonduks, which were generally enclosed courtyards where goods could be stored, merchants could hire accommodation, and their own consuls could administer their affairs and handle any complications that arose with the ruling power.

In Islamic cities, the gates of the fonduk were often locked at night – from the outside – to keep infidel merchants from Venice, Genoa or Barcelona off the streets of cities such as Alexandria and Tunis at night. Beneficent protection was combined with suspicion that the presence of these aliens could be a source of contamination, especially when local Muslims began to frequent the wine bar that the Genoese were permitted to operate for their own use within their fonduk at Tunis. Fonduks also provided the Venetians with a model for the Jewish ghetto they established in their home city in 1516. Nor were these an exclusively Mediterranean phenomenon. The tight cluster of wooden houses known as Bryggen in the heart of Bergen formed an exclusively German enclave established by the Hansa merchants, as did the so-called Steelyard in London and the Peterhof in Novgorod.

There were also trading centres where it was possible for foreign merchants to live a less restricted life. Early in the 12th century, in Acre (modern Akko in Israel), the crusader kings of Jerusalem granted large segments of the city to the merchants of Pisa, Genoa and Venice, partly as a reward for naval help in the conquest of the Holy Land, but also with a view to encouraging the trade in spices and other exotic products through their kingdom. These Italian merchants traded tax-free, or paying very low rates of tax, because the king could see that generous tax exemptions would draw these merchants in, while their Middle Eastern business partners would not be tax-exempt. The result would be more intensive commercial activity and higher rather than lower tax receipts from trade. In the 14th and 15th century Bruges foreign merchants were not obliged to live in enclosed areas, and it is still possible to see the headquarters of the Genoese (now somewhat inappropriately the Belgian Museum of the Fried Potato) and, close by, the house of the Florentines and that of the Easterlings, in other words the merchants of the German Hansa.

The proximity of merchants from the Mediterranean and the Baltic reflects the role of Bruges as a clearing-house through which goods and payments passed, at the mid-point between the trading world of northern and southern Europe. The physical reality of these connections is confirmed by the extraordinary discovery in Tallinn early in the twentieth century of a box containing some of the records of the Veckinhusen family, prominent Hansa merchants of the 15th century. The documents were buried beneath a vast mass of peppercorns that had been brought along the trade routes all the way from the Indies.

It was not always easy for merchants to cultivate political neutrality. Somehow they often managed to maintain friendships with contending parties such as the sultans of Egypt and the kings of Jerusalem, or the Mongol Golden Horde to the north of the Black Sea and their cousins the rulers of il-khan Persia. The Pisans and Genoese even managed to maintain reasonably good relations with the Almohad caliphs of Morocco and Tunisia, who were often intolerant of Christianity. Profit frequently came first – proficuum quod Deus dederit, ‘the profit that God shall give’, to quote any number of Genoese trading contacts. Christian rulers within the Mediterranean also understood that their income would suffer if they persecuted their Muslim and Jewish subjects.

Palermo and Valencia, conquered by Christian armies respectively in the late-11th and the mid-13th centuries, are perhaps the most prominent examples of trading ports that hosted a rich mix of peoples and religions. In Ciutat de Mallorca (the modern Palma) the king did not imitate his contemporaries in England and northern France who expelled the Jews, but enclosed them in a spacious walled area, a sort of proto-ghetto, where they could carry on trading intensively with both North Africa and Catalonia. The Genoese colony at Caffa in Crimea contained a mix of Greeks, Jews, Armenians, Mongols, Turks, Russians, while the Genoese themselves constituted a relatively small ruling minority.

Caffa is a good place to end this history of merchants and markets in the medieval West, because it was from there that the Black Death spread out across Europe in 1347, resulting in the death of perhaps half of Europe’s population and in a tremendous shock to the economy, initiating a new era in European economic history.

Similar examples of multi-cultural port cities, with less disastrous outcomes, can be found across the medieval world, for instance in ninth-century Kollam, in southern India, where the members of two merchant guilds patronised by the local ruler included Zoroastrians, Jews, Muslims and Hindus. In the capital of the early medieval kingdom of Sri Vijaya, based in Sumatra, not just the merchants but the white, red and yellow parrots were said to have no difficulty learning Arabic, Persian, Greek and Hindi, Then there was Quanzhou, a lively centre of Chinese trade that blossomed in the Song period, which, with its mosques as well as it market-places, became a focal point for Muslim traders who arrived from as far afield as Persia. All this underlines the role of markets as meeting-places between cultures as well as places where the sale both of basic necessities and of luxury items can be conducted systematically and profitably.