Information and Economic History: How the Credit Market in Old Regime Paris Forces Us to Rethink the Transition to Capitalism

BENEATH THE VAST HISTORY OF BUSINESS PRACTICES-and underneath the historical scholarship on financial transactions in particular-there lurks a beguiling story, a story that goes something like this: Before the Industrial Revolution-and in developing countries, before modern economic growth-financial dealings were usually personal, with most loans supporting non-productive activities. Investment in this pre-modern world was minimal, as, obviously, was economic growth. In Europe, the impasse lasted until the late eighteenth and nineteenth centuries, when the continent passed through a drastic economic transition that transformed finance. The transition created an impersonal and capitalist credit market, which fed productive investment in industry and made growth a reality.