It is AD 1356, and the kaleidoscope of history has not been kind to Europe over the last millennium. The western half of the Roman Empire collapsed, leading to a massive reduction in the cross-continental trade it facilitated as Northmen raiders and Mediterranean pirates overran trade routes, and engineer-less roads began to wear and fall into disrepair. Centuries of warring between the petty kingdoms which succeeded Rome in the West culminated with the ultimate victory of the fearsome Frankish kings. This provided a stabilizing force of security, guarantees of law and justice, and reliable standards of exchange, just so long as their ruler did not divide his kingdom amongst too many sons. Each successive king then proceeded to divide his kingdom amongst too many sons, and Europe returned to a patchwork of fiefdoms and principalities which were loosely held together by ill-defined (possibly contradictory) notions of fealty to an ultimate king or emperor. After a few more centuries of power struggles, popes, antipopes, and everyone bickering and arguing about “who killed who”, we have arrived in the middle of the 14th century relatively intact as a civilization, and are only mildly worried about those caravans from the East who look suspiciously Bubonic-Plague-y.

It is in the middle of one of the great wannabe “empires” where our story takes place. In the city of Lübeck, a seat of commerce within the Holy Roman Empire, representatives from 80 trading centers across Northern Europe and the Baltic Sea meet to formally solidify their partnership in a commercial organization which would grow to rival kingdoms, principalities, and bishoprics in both wealth and political influence - the Hanseatic League.

The Hanseatic League (or Hanse) began as a network of merchant’s guilds in medieval Europe which grew through the 12th and 13th centuries, incorporating existing guilds and planting new commercial outposts in key trading hubs across Northern Europe. This group adhered to a principle of decentralization, and though Lübeck would be recognized as the headquarters of the League and their codified rules would come to be known as “Lübeck Law,” each member was an equal partner in the operation. When meetings of the Hanse were called in Lübeck (called a Hansetag Diet), attendance was not mandatory for member cities, and members were usually not bound to the rulings of these Hansetag beyond the core principle of maintaining peace between members and mutual guarantees of defensive aid. The Hanse codified a system of trade laws and exchange rates, provided operating resources for guild members, educated and indoctrinated new guild members through a system of international apprenticeship, and guaranteed good behavior between member cities to suppress infighting in an age when the broader society was so prone to conflict that “medieval” has become synonymous with violence and pillaging.

The legal status of the Hanseatic League is difficult to define in today’s terms, as it was not a political entity or country. Initially, membership was held by guilds of merchants who formed interconnected trade routes. As these merchants’ guilds gained local influence the nature of the League shifted as city councils (typically run by those same merchants) opted into the Hanse and pledged peace and mutual protection with other League members. They would allow Hanseatic merchants to operate freely within their walls, but each member city from Bruges to Novgorod was still bound to its local ruler. Within these member cities and their trading partner municipalities, autonomous zones called Kontors formed which would include Hanse offices, warehouses, churches, and housing for members. At its height, over 200 of these individual Kontors, spanning 7 modern countries, served as the League’s outposts across the Baltic Sea region. The League at this time was powerful enough to directly assert its autonomy in a series of wars fought against the Kingdom of Denmark and its allies, gaining victory and ensuring its ability to freely trade throughout Scandinavia.

So here we have our three facets: (1) a unified organization that (2) has multiple independent, voluntarily federated constituents which each exercise local authority and (3) can assert its existence against the outside world. This decentralized and autonomous organization exerted economic and political influence through free and fair trade in an age defined by increasing hereditary absolutism enforced by the sword. There are a number of lessons that the Hanseatic League provides for DAOs today.

The Hanseatic League was, at its core, a mutual aid society. The name Hanse derives from the word for “fleet”, and like a merchant convoy sailing together for both protection and profit, this League would respond to the changing tides, vicious storms, and pirate raids (to extend the metaphor) so that they could maintain their commercial edge. But there is no evidence that the League set out to redefine mercantilism, or keep alive the tradition of trade inherited from the Roman Empire, or supplant the Feudal system with a free capitalist economy. Members felt common pains- external pressures from bandits and internal injustice from arbitrary taxation- and they joined together, staked their lives and resources in support of each other, and created a system of mutual aid so that members could be free of the whims of the robbers who ruled the sea and the rulers who robbed their people. Though they fought to maintain autonomy, they did not fight to “bring down” any institutions. The system they built was better than the alternative, so it flourished.

• How might we focus the attention of our DAOs to identify new opportunities and focus our energy on building new systems?

• How might we build in resilience so that we can adapt to new strategies in the face of obstacles which arise?

The League appears to have focused primarily on regional power. Membership did not extend beyond Northern Europe, and even though it lived through the Age of Exploration they did not take part in colonization or the scramble to get in on the lucrative trade with the East. Cities joined and could maintain membership if they adhered to the principles of the Hanse. In this way, guilds became prosperous, and cities became powerful, which gave these cities an incentive to defend this network. The political clout followed the economic success, and the governments were pulled along by the will of the people. While our own DAOs might not be focused on maximizing profit, I believe we can follow this notion that success, economic or social, is based on voluntary adherence to sound and just principles:

• How would we define “healthy growth” of our DAO? How might we encourage healthy growth of both our individual members and our DAOs as a whole?

• How might we recognize initiatives and projects which do not fulfill our core mission? And what do we do with those “secondary” initiatives?

There is an amazing focus that carried the Hanseatic League through the centuries. Even when they expanded into new markets or hired armies to fight wars, they always did it with a core focus on maintaining optimal conditions for trade and commercial enterprise in their sphere of influence. Beginning when a humble partnership of merchants’ guilds within Lübeck combined with those in nearby Hamburg, that network grew to form the Hanse which survived for centuries as management was passed from one generation to the next. The specific goods, financial techniques, and operations varied from one city to the next, but the merchants adapted and brought prosperity to their adopted homes, enriching and empowering the League to become a real political force in its time. It is this cycle that we can study: the Hanse provided a foundation of training and basic needs for merchants, merchants prospered and caused their cities to prosper, prosperous cities enriched the League and allowed it to expand, the League incorporated more merchants, and on, and on.

• How might we define, articulate, and adhere to a core value proposition for our DAOs?

• How might we build that positive growth flywheel which attracts members to our DAOs and empowers them to seek fresh harvests to fulfill our mission?

The Hanseatic League slowly lost relevance as leadership in the North Sea trade was supplanted by the Dutch and the English. These counterexamples, each an early form of a modern nation state, are certainly decentralized by the standards of their peers like Spain and France - ruled as they were by divine-authority-claiming monarchs who centralized all power within their royal person. However, they offer a more centralized State-based counterexample to the Hanseatic League as a DAO. Natural shifts in environments and resources disrupted much of the League’s access to trading material, while jealous local rulers encroached on the members of the Hanse in the general turmoil of the late 14th and early 15th centuries, raising some member cities over others and breaking the backbone of mutual support. As political strife stressed the seams of the League’s cohesion, New Worlds opened new trade routes, and the Kings of England and Stadtholders of Holland provided royal protections to joint stock companies which disrupted localized North Sea trade with imports from the East and West Indies. As the economic model of Europe shifted from local to global, it took the cohesion and resources of a nation-state to weather the storm, adapt, and emerge as the next trade powers.

It was in these turbulent times that many of the fundamental flaws of the Feudal system which brought the Hanse into existence were corrected. The Kingdom of England, where even the King and aristocracy were bound by laws protecting merchants and trade, along with the Dutch Republic, administered by the very commercial center of Amsterdam, both proved that an effective nation-state did not create and enforce laws by fiat. The ruling classes could and should answer to the productive classes, and even better if a Parliament of both classes has a share in government. Even as these nations fit the framework of “the State” we have defined as a foil to DAOs (central administration, coercion of subjects, and territorial control), their contact with the Hanseatic League indicates that these two powers learned and benefitted from the interactions with those merchants who ruled the Baltic. Bearing this in mind, I would contend that the League’s decline was proof of its success. It provided a system of mutual protection and free trade through the Baltic Sea and Northern Europe which carried it through an age defined by internal and external strife, and the Hanse provided an example of governance for centuries to kingdoms, republics, joint stock companies, corporate entities, and, of course, DAOs.

• What does an “end state” or success look like for our DAOs today?

• How might we adapt to new frontiers as they are discovered and pivot to capitalize on them?

  (cover image courtesy of apwh.pbworks.com)

It is AD 1356, and the kaleidoscope of history has not been kind to Europe over the last millennium. The western half of the Roman Empire collapsed, leading to a massive reduction in the cross-continental trade it facilitated as Northmen raiders and Mediterranean pirates overran trade routes, and engineer-less roads began to wear and fall into disrepair. Centuries of warring between the petty kingdoms which succeeded Rome in the West culminated with the ultimate victory of the fearsome Frankish kings. This provided a stabilizing force of security, guarantees of law and justice, and reliable standards of exchange, just so long as their ruler did not divide his kingdom amongst too many sons. Each successive king then proceeded to divide his kingdom amongst too many sons, and Europe returned to a patchwork of fiefdoms and principalities which were loosely held together by ill-defined (possibly contradictory) notions of fealty to an ultimate king or emperor. After a few more centuries of power struggles, popes, antipopes, and everyone bickering and arguing about “who killed who”, we have arrived in the middle of the 14th century relatively intact as a civilization, and are only mildly worried about those caravans from the East who look suspiciously Bubonic-Plague-y.

It is in the middle of one of the great wannabe “empires” where our story takes place. In the city of Lübeck, a seat of commerce within the Holy Roman Empire, representatives from 80 trading centers across Northern Europe and the Baltic Sea meet to formally solidify their partnership in a commercial organization which would grow to rival kingdoms, principalities, and bishoprics in both wealth and political influence - the Hanseatic League.

The Hanseatic League (or Hanse) began as a network of merchant’s guilds in medieval Europe which grew through the 12th and 13th centuries, incorporating existing guilds and planting new commercial outposts in key trading hubs across Northern Europe. This group adhered to a principle of decentralization, and though Lübeck would be recognized as the headquarters of the League and their codified rules would come to be known as “Lübeck Law,” each member was an equal partner in the operation. When meetings of the Hanse were called in Lübeck (called a Hansetag Diet), attendance was not mandatory for member cities, and members were usually not bound to the rulings of these Hansetag beyond the core principle of maintaining peace between members and mutual guarantees of defensive aid. The Hanse codified a system of trade laws and exchange rates, provided operating resources for guild members, educated and indoctrinated new guild members through a system of international apprenticeship, and guaranteed good behavior between member cities to suppress infighting in an age when the broader society was so prone to conflict that “medieval” has become synonymous with violence and pillaging.

The legal status of the Hanseatic League is difficult to define in today’s terms, as it was not a political entity or country. Initially, membership was held by guilds of merchants who formed interconnected trade routes. As these merchants’ guilds gained local influence the nature of the League shifted as city councils (typically run by those same merchants) opted into the Hanse and pledged peace and mutual protection with other League members. They would allow Hanseatic merchants to operate freely within their walls, but each member city from Bruges to Novgorod was still bound to its local ruler. Within these member cities and their trading partner municipalities, autonomous zones called Kontors formed which would include Hanse offices, warehouses, churches, and housing for members. At its height, over 200 of these individual Kontors, spanning 7 modern countries, served as the League’s outposts across the Baltic Sea region. The League at this time was powerful enough to directly assert its autonomy in a series of wars fought against the Kingdom of Denmark and its allies, gaining victory and ensuring its ability to freely trade throughout Scandinavia.

So here we have our three facets: (1) a unified organization that (2) has multiple independent, voluntarily federated constituents which each exercise local authority and (3) can assert its existence against the outside world. This decentralized and autonomous organization exerted economic and political influence through free and fair trade in an age defined by increasing hereditary absolutism enforced by the sword. There are a number of lessons that the Hanseatic League provides for DAOs today.

The Hanseatic League was, at its core, a mutual aid society. The name Hanse derives from the word for “fleet”, and like a merchant convoy sailing together for both protection and profit, this League would respond to the changing tides, vicious storms, and pirate raids (to extend the metaphor) so that they could maintain their commercial edge. But there is no evidence that the League set out to redefine mercantilism, or keep alive the tradition of trade inherited from the Roman Empire, or supplant the Feudal system with a free capitalist economy. Members felt common pains- external pressures from bandits and internal injustice from arbitrary taxation- and they joined together, staked their lives and resources in support of each other, and created a system of mutual aid so that members could be free of the whims of the robbers who ruled the sea and the rulers who robbed their people. Though they fought to maintain autonomy, they did not fight to “bring down” any institutions. The system they built was better than the alternative, so it flourished.

• How might we focus the attention of our DAOs to identify new opportunities and focus our energy on building new systems?

• How might we build in resilience so that we can adapt to new strategies in the face of obstacles which arise?

The League appears to have focused primarily on regional power. Membership did not extend beyond Northern Europe, and even though it lived through the Age of Exploration they did not take part in colonization or the scramble to get in on the lucrative trade with the East. Cities joined and could maintain membership if they adhered to the principles of the Hanse. In this way, guilds became prosperous, and cities became powerful, which gave these cities an incentive to defend this network. The political clout followed the economic success, and the governments were pulled along by the will of the people. While our own DAOs might not be focused on maximizing profit, I believe we can follow this notion that success, economic or social, is based on voluntary adherence to sound and just principles:

• How would we define “healthy growth” of our DAO? How might we encourage healthy growth of both our individual members and our DAOs as a whole?

• How might we recognize initiatives and projects which do not fulfill our core mission? And what do we do with those “secondary” initiatives?

There is an amazing focus that carried the Hanseatic League through the centuries. Even when they expanded into new markets or hired armies to fight wars, they always did it with a core focus on maintaining optimal conditions for trade and commercial enterprise in their sphere of influence. Beginning when a humble partnership of merchants’ guilds within Lübeck combined with those in nearby Hamburg, that network grew to form the Hanse which survived for centuries as management was passed from one generation to the next. The specific goods, financial techniques, and operations varied from one city to the next, but the merchants adapted and brought prosperity to their adopted homes, enriching and empowering the League to become a real political force in its time. It is this cycle that we can study: the Hanse provided a foundation of training and basic needs for merchants, merchants prospered and caused their cities to prosper, prosperous cities enriched the League and allowed it to expand, the League incorporated more merchants, and on, and on.

• How might we define, articulate, and adhere to a core value proposition for our DAOs?

• How might we build that positive growth flywheel which attracts members to our DAOs and empowers them to seek fresh harvests to fulfill our mission?

The Hanseatic League slowly lost relevance as leadership in the North Sea trade was supplanted by the Dutch and the English. These counterexamples, each an early form of a modern nation state, are certainly decentralized by the standards of their peers like Spain and France - ruled as they were by divine-authority-claiming monarchs who centralized all power within their royal person. However, they offer a more centralized State-based counterexample to the Hanseatic League as a DAO. Natural shifts in environments and resources disrupted much of the League’s access to trading material, while jealous local rulers encroached on the members of the Hanse in the general turmoil of the late 14th and early 15th centuries, raising some member cities over others and breaking the backbone of mutual support. As political strife stressed the seams of the League’s cohesion, New Worlds opened new trade routes, and the Kings of England and Stadtholders of Holland provided royal protections to joint stock companies which disrupted localized North Sea trade with imports from the East and West Indies. As the economic model of Europe shifted from local to global, it took the cohesion and resources of a nation-state to weather the storm, adapt, and emerge as the next trade powers.

It was in these turbulent times that many of the fundamental flaws of the Feudal system which brought the Hanse into existence were corrected. The Kingdom of England, where even the King and aristocracy were bound by laws protecting merchants and trade, along with the Dutch Republic, administered by the very commercial center of Amsterdam, both proved that an effective nation-state did not create and enforce laws by fiat. The ruling classes could and should answer to the productive classes, and even better if a Parliament of both classes has a share in government. Even as these nations fit the framework of “the State” we have defined as a foil to DAOs (central administration, coercion of subjects, and territorial control), their contact with the Hanseatic League indicates that these two powers learned and benefitted from the interactions with those merchants who ruled the Baltic. Bearing this in mind, I would contend that the League’s decline was proof of its success. It provided a system of mutual protection and free trade through the Baltic Sea and Northern Europe which carried it through an age defined by internal and external strife, and the Hanse provided an example of governance for centuries to kingdoms, republics, joint stock companies, corporate entities, and, of course, DAOs.

• What does an “end state” or success look like for our DAOs today?

• How might we adapt to new frontiers as they are discovered and pivot to capitalize on them?

  (cover image courtesy of apwh.pbworks.com)