Succeeding in business has changed remarkably little in the last 500 years, according to a recently translated book by 15th Century Italian merchant Benedetto Cotrugli. The Book of the Art of Trade was translated by Harvard Business School’s Baker Library at Harvard University, and is housed in the library’s extensive Renaissance Italian Business Collection.
The translated manual offers “early concepts of corporate social responsibility,” says Harvard Business School professor of management practice Dante Roscini. The manual also addresses “the issue of responsibility to the community and who you are as a person.”
The author was forced against his wishes to withdraw as a student at the University of Bologna to manage the family’s cloth and wool trade, which he entered reluctantly. Among his first observations as a merchant was “this useful and necessary activity [trade] had fallen into the hands of such undisciplined and uncouth people, who carry on without moderation or orderliness, ignoring and perverting the law….”
To make the merchant world better, Cotrugli laid out a four-part primer that outlined principles that were surprisingly ahead of their time. Such principles focused on the origins of trade, role of religion, civic duties, and responsibilities in business practice. An introduction to the Cotrugli manuscript is presented in an article by in the Nov. 29 issue of Harvard Business School’s “Working Knowledge.”
Rules of Conduct
Cotrugli’s work ethic is remarkably modern even by 21st Century standards. Here are a few gems in his treatise:
“The merchant must be generous in extending his hand to the poor and in giving alms out of his own property in proportion to its extent.”
“The shrewdness of the merchant, or his cunning, must be employed in moderation: he should neither hurt others nor allow himself to be got the better of, but manage to intuit where deceit and falsity lurk.”
“Be careful not to take on too many or too large transactions: do not try to net every bird that passes, because many have failed for taking on too much, but no one for exposing himself too little.”
Rules for living: Cotrugli instructs readers to avoid chess, cards, dice, wrestling, fencing, dancing, hunting, fishing and playing musical instruments. He stresses the importance of praying and attending church. Chapters of the treatise focus on honor, integrity, prudence, civility, composure, civility and temperance.
About politics: He urges non-involvement because “these are perilous areas.”
Need for education: He stressed the importance of being a good citizen. Education, he wrote, plays a key role in creating the “universal man, equipped with the capacity to understand and deal with all types of men.”
Handling debt: While extending credit was necessary in Cotrugli’s day, charging interest was considered illegal. Bills over a year old should be cut in half, writes Cotrugli. If unpaid after two years, the debt should be written off entirely.
Succession planning: He writes: “…we need to take particular care, when we are beginning to channel the disposition of a son…when directing them towards the practice of trade, because if that son has a leaning elsewhere…he might not well prosper in that life, or would only get on with difficulty or remain stuck halfway with small profit to himself and without reaching his objective, which should be to enrich himself honourably.” However, if the son is “lively by nature, well turned-out and of neither noble character, and not too fickle nor an idler, but rather aspires to acquire both honour and profit or victory in war, “then we can say that he is suitable material for a career in trade.”