I’ve just got back from a week in Venice, Italy. What a place! As an architecture nerd i had been wanting to go there for years, as a arts nerd, i had been wanting to follow in some heroic footsteps but, as an oddball with an interest in economics and trade through history, i couldn’t not visit the centre of European/International business of the middle ages.
Originating in the 5th century by people escaping the hoards of Attila the Hun. Venice is basically a swamp in the Adriatic sea sheltered in a lagoon. The whole city is built on wooden logs piled into the seabed, supporting brick and stone and it was the epicenter of finance and business throughout the western world for hundreds of years. It was seriously rich and so were its aristocracy.
The reasons for this initially came down to geography and subsequently/due to security.
Venice is perfectly placed to receive goods from the east and distribute to the west being basically in the middle of both cultures and at the edge of the famous silk road which linked china to Europe. During the 9th century the big superpower in the area was the Byzantine Empire along the Adriatic coast and Venice was originally part of that empire. Venice Managed to acquire trading rights from the government based in Constantinople (now Istanbul) to trade along the coast. This granted it an element of independence which would eventually grow to see Venice acquire control of its waters and eventually dominate the area.
Piracy at the time was a huge concern to shipping and trade, Venice with its relative autonomy was leagues ahead of everyone else in tackling piracy. In a similar fashion to how Liverpool leaped ahead in technology developing its first dock, it was combating piracy that gave Venice its edge (as well as its geography, another parallel with Liverpool).
In 1204 Constantinople was sacked! (raided and the byzantine empire fell) by crusading forces, at this point the crusades had helped push plenty of trade through Venice. The sacking was mainly orchestrated by opportune Venetians with the large pirate quashing navy which would secure independence for Venice from the empire upon its fall. With the sacking of Constantinople via this tactical attack, the Venetians where able to fill their ships with plenty of looted gold and silver including the bronze horses which you can now see in St Marks cathedral (sort of, see wiki for more details on them). With the political pull that came with orchestrating the attack on Constantinople, Venice was able to secure the Islands of Crete and Euboea and subsequently the trade routes that came with their waters.
So in one opportune swoop Venice was now rich, independent and growing in influence throughout the Mediterranean. In 1221 they signed a trade treaty with the mongol Empire.
With these times of treatise, large expeditions to the east and into Europe had to be financed. This required capital and that meant credit. The Venetian’s developed a banking system to accommodate this which was moved away from gold and silver (hard to transport and not always available) to currencies akin to what we have today which meant a introduction to exchange rates. This allowed for more flexibility to finance transportation of goods and pay creditors.
Like many a trading superpower it was through it’s independence that it was able to fully capitalize on its environment and markets.
Look out for more of my blog posts on Venice as it grows to become the magnificence it is today.
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