On the eve of the independence movements in the early nineteenth century, the promulgation of the 1812 Cádiz Constitution transformed economic justice for small-scale debtors and creditors by placing magistrates in Mexico City by election instead of appointment. This change directly affected the mediation of the juicios verbales (small claims hearings for cases under 100 pesos), where tens of thousands of debtors and creditors now pressed their claims before elected local magistrates. Chapter 1 analyses this system of economic justice based on nearly 1,000 small claims records, showing that economic justice was relatively effective for ordinary people from the 1810s to the 1860s. These small claims conflicts might seem a petty world of negligible amounts and narrow-minded disputes, but, analysed together, they revise a long-standing historiographical assumption among scholars that Mexico did not have strong property rights in the early nineteenth century. Instead, this chapter shows that Cádiz liberalism established a judicial institution to protect property rights, especially for creditors, that enjoyed a broad legitimacy well into Mexican independence.

The power struggle between debtors and creditors in the 1860s and 1870s signalled a time when face-to-face economic relationships showed signs of strain. Economic life was expanding in more impersonal ways, and debt litigation was increasing as debtors and creditors alike found themselves navigating risk without the long-standing close social ties that once characterised their relationships. Chapter 2 studies legal conflicts and legal codes to understand the risks people took when making contractual agreements and illuminates how they decided to trust each other. It shows debtors attempting to evade their obligations in myriad ways and depicts creditors transmitting their anxieties to the courts through the use of providencias precautorias (precautionary petitions) to sequester goods or people before the initiation of a formal civil suit. Examining legal codes from mediaeval Iberia to nineteenth-century civil law, this chapters shows how jurists, working in a long tradition, attempted to balance the interests of both parties. Although creditors generally prevailed in legal conflicts, the prospects of debtors were on the rise.

In the aftermath of the Mexican Revolution, bankers thrust the disciplinary power of the state between debtors and creditors. They used their influence to criminalise the act of writing an uncovered cheque as fraud. From 1932 until 1984, debtors who wrote bad cheques to guarantee loans faced serious consequences, from fines to jail time. By examining approximately 115 arrest records, Chapter 4 uncovers the early history of financialisation, as more people began to use new financial instruments. When people wrote uncovered cheques, some of them experienced first-hand the growing pains that came with participating in financial modernity. Cheques represented the new dynamics of economic citizenship at mid-century, as the political elite of the PRI shored up the interests of bankers at the expense of bank account holders. As this chapter shows, the criminalisation of bad cheques facilitated the emergence of financial capitalism by establishing new kinds of property rights and creating a new white-collar crime. In the process, political leaders introduced new forms of coercion into the debtor–creditor relationship that left debtors more vulnerable than ever.

In the late nineteenth century, modern institutional lenders such as banks began to expand into the lives of ordinary and middling people, as well as into the firmament of small and medium enterprises. When the Banco Nacional de México (Banamex) opened its doors in 1884, it hired the American credit-rating agency R. G. Dun to appraise the creditworthiness of people and businesses. The bank needed clients, including people and businesses to whom it could lend money, and it used Dun’s services to find these potential debtors. Dun offered a new solution to the trust problem in credit relations: the credit report. Chapter 3 analyses risk and trust by examining this major shift in economic history, showing how the credit report as a form of bureaucratic economic information began to replace older face-to-face trust mechanisms. Analysing approximately 125 credit reports on people and businesses from the 1880s to the 1920s, the chapter examines changing ideas about creditworthiness as the modern credit economy took root. It argues that financial exclusion was baked in from the start, and that the power struggle between debtors and creditors changed when bankers succeeded in wedging a bureaucratic report between them

The introduction reviews the current debate concerning the origins of the industrial revolution in England, especially the institutionalist argument, its emphasis on property rights, and critical responses to it. In brief, the classic institutionalist argument is that the Glorious Revolution marked a significant improvement in the security of property rights, leading in turn to the Industrial Revolution a century later. The most common counter-argument is that property rights had been secure in England since the medieval period. Herein lies part of the significance of wardship for larger debates concerning the origins of the industrial revolution. If, as the book contends, wardship meant that property rights were much less secure than is now commonly supposed, this would go a long way to resuscitating classic institutionalist accounts of English/British institutional change in the seventeenth century and consequent economic development.

The chapter provides an analytical survey of the development of wardship in England from 1066 to 1540, when the Court of Wards was placed on a legislative establishment. In so doing, the chapter performs two roles. Firstly, it provides a detailed introduction to the institution of wardship. Secondly, it explains how the Crown wrought seismic and profoundly unsettling changes in the English land law, especially during the 1530s. In conjunction with the largest forcible re-distribution of land since the Conquest, that is the dissolution of the monasteries, this significantly increased the number of heirs falling into wardship.

The fourth chapter discusses the officers and personnel of the Court, particularly how they obtained and benefited from their positions. In so doing, the chapter reveals another additional cost wardship imposed – as much as the Crown and its favourites profited from wardship, many of the proceeds were also secreted away by its officers. This originated at the very top – Masters of the Court certainly took bribes from those seeking to obtain wardships, to the bottom, with the Court’s county officer, the feodary. The chapter includes the case study of one such feodary, John Goodhand, whose activities can be traced through the surviving documentary record. Goodhand, as well as making the usual extortions, was accused of kidnapping children he claimed were in wardship – ‘sheep committed to the wolf’ in one court document. Found guilty, he was briefly imprisoned and fined £1,000. But from the Crown’s perspective, he had been an indefatigable servant who had raised Court revenues in his county. After the fine was paid, he re-entered royal service with a letter from Charles I protecting him from future prosecutions.

In that the Crown was only able to appropriate a very small proportion of the potential revenues that might have accrued from wardship, the fourth chapter explains how this was typical of the other fiscal instruments adopted by the Tudors and, more especially, the early Stuarts to raise funds. In particular, the inability of the Crown to prevent massive embezzlement by its officers and agents is emphasised. In the longer term, the atrophying fiscal capacity of the English state and its inability to provide security from even modest external threats helped precipitate the English Civil War.

The first half of this chapter surveys some of the tangible economic consequences of wardship – it increased the incidence of waste (that is asset-stripping of wards’ estate), increased the barriers to agricultural improvement and obstructed land transactions. The difficulty lies in presenting systematic evidence concerning this – ideally it would be possible to identify and attribute differences in agricultural productivity according to freehold tenure – some of which did entail wardship for underage heirs, namely ‘knight service’ and some of which did not, namely ‘socage’. But beyond a massive data collection exercise it is unclear how this could be achieved. Instead, as a proxy for productivity, the second half of this chapter presents evidence concerning land values. As one would expect, land held by socage sold at a 10% premium compared with land held by knight service.

The chapter provides a detailed overview of the Court’s history. In so doing, it serves three functions. Firstly, it explains how the Court was fiscally significant, providing the Crown with between 3 and 9 percent of its annual revenues. Under Charles I (r. 1625–49), it was the third and then the second most important source of revenue. Secondly, it explains how although the Court was tremendously unpopular, a political corpus existed for its continued operation. The Crown obviously sought to retain the Court, but the nobility, the royal ‘Court’, and members of the central administration (not mutually exclusive groups) also sought to retain wardship as they were able to purchase wards to their enormous profit. Herein lies the third function of this chapter: wardship was a tremendously inefficient means of raising revenues.

Wardship could affect surviving families in a myriad of ways; one family’s experience could be very different from another’s. For the lucky, the child and their estate would be returned at a reasonable price. For the unlucky, the child and their lands would be sold on to a third party who might exploit both without scruple. To try and capture some of the social and familial costs wardship imposed – inadequately captured from a purely economic perspective – the eighth chapter traces out the different stages of wardship and some of the surviving testimony and anecdotes from those unfortunate to enter wardship.