Training as a club good: Merchant apprenticeship in sixteenth‐century Europe

Based on the extensive correspondence of the sixteenth‐century merchant firm of Tucher, this article casts pre‐modern mercantile training in a new light. Rather than training for seven or more years with one master, including a possible sojourn abroad, apprentices served a string of short‐term contracts with masters across different European countries. This form of organization raised the cost of training significantly. I argue that participants bore these costs because apprenticeship served a purpose beyond the transmission of skills. The network‐based nature of trade meant that firms could expect to retain their investment in training through future business ties with the former apprentice. Over the course of the apprenticeship, reputation mechanisms served to vet the apprentice's suitability as a future trading partner. Under these circumstances, training became a club good. It facilitated network expansion and contributed to solving the fundamental problem of exchange.