Silicon Valley of the 14th Century: What the U.S. Can Learn From 1386 Germany

Though it would one day become the mecca of dour philosophers and the Ph.D. students who love them, Germany was actually a bit late to the game when it came to establishing universities. Before the 14th century, Germany youths had to travel abroad for an education, often to modern-day France. hat changed with the Papal Schism of 1386, when rival popes from Rome and France both lay claim to the leadership of the Catholic Church. German students loyal to the Roman faction were expelled from their French universities.

Suddenly, Germany had to build itself some colleges. […]

Just like today’s Silicon Valley, yesterday’s Rhine Valley built an economic engine on academic excellence. How? Authors David Cantoni and Noam Yuchtman have a theory: Lawyers.

Yes, lawyers. The 14th-century universities trained law students, the business innovators of the time (how things change). Legal scholars learned Roman law, which, with its emphasis on contracts and property, offered the building blocks of commerce: 

Whereas customary law was very local, Roman law was universally known across Europe; whereas customary law was highly traditional, based on kinship and superstition, Roman law was an authoritative yet flexible system, that had been enriched by centuries of scholarship; whereas traditional law was informal and feuds were often preferred to trial, Roman law was written…and based on a process of rational pursuit of truth. In the particular context of Germany, with its highly fractionalized territories, these advantages of Roman law were particularly salient.

In the 14 century, law was a sort of technology. It provided massive efficiency gains in a fractious, clannish region like Germany. Lawyers were able to reprogram the economy, and help set in motion the true beginnings of capitalism. And while Cantoni and Yuchtman’s data analysis is contained to Germany, they argue that a similar process may have unfolded across Europe. 

And it had universities to thank.

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