Converting Goods into Cash: an Ethical Approach to Pawnbroking in Early Modern Bologna

Italian townships in the age of the Renaissance pioneered community-based credit bodies - Monti di pietà - to assist financially disenfranchised borrowers. These new agencies not only extended credit to those who had no other source (playing a relevant anticyclical function in the local economy) but did so according to strict ethical rule. Banking on the archival records of one of the most successful of these credit institutions (the Monte operating in Bologna), the essay examines the magnitude of pawnbroking operations, the variety of goods pledged and redeemed and the crowd of customers flocking to the Monte. As the Monte expanded the reach of its services its clientele moved beyond the working poor milieu to include professionals and upper class customers. This evolution brought the Monte far beyond its original mission of lending petty sums against collateral to poor households, yet the Monte did so in a way that updated rather than deviated from its original mission. In fact loans to the affluent meant more affordable credit to the poor since the former paid higher rates of interest. Lending to the wealthy at higher rates led to cheaper services to those in serious need.