The Hanseatic League

Content
1. Introduction………………………………………………………………………..2
2. The first globalization………………………………………………………….3
3. Common market………………………………………………………………….3
4. Transaction costs…………………………………………………………………4
4. Factors which contributed to the decline of Hanza………………4
5. Conclusion……………………………………………………………………………5
6. References……………………………………………………………………………5

In the 13th century, in northern Europe was formed an outstanding trading alliance called the Hanseatic League, also known as Hanza or Hansa. It was trading guilds alliance. During the late Middle Ages, from the North Sea to the Baltic this alliance created and maintained a trade monopoly along the coast of Northern Europe. League cooperated with rival cities to protect themselves from

These cities have a large degree of autonomy, and thus, were able to initiate the special economic zones, which were agreed by the rules and regulations of trade and exchange between several coastal economic enclaves. The institutionalization of such rules and regulations reduced transaction costs. This reduced the risk inherent in the transport and trade, as it allowed the fleets of merchant ships to travel in a group and look down the threat of pirates, as well as to dilute the risk of loss of cargo at sea. Different cities began to "specialize" in certain commodities, such as grain, timber, furs and linen. It ultimately consolidate a network of trust, and gave birth to the first of the common market. Thus, the League emerged from the understanding of the benefits of trade and exchange. For example, the merchants of the Hanseatic League in Cologne managed to convince Henry II of England to give them special trade privileges and rights that the market freed them from all charges in London and allowed them to trade at fairs throughout England. Development of the Hansa was the first truly international trade league, which was created to protect mutual trading interests, which stretched from northern Germany to the Baltic States and parts of