Merchants and Bankers

Medieval Florence was an economic powerhouse. In the 15th century, it had 270 wool-processing factories, 83 silk manufacturing establishments, and 33 banks. After the economic crisis of the 14th century, wool production declined and was replaced by silk production. The number of wool processors in Florence decreased from 270 to 63 by 1537, while the number of people working with silk doubled.

Significant changes also occurred in trade. Merchants procured raw materials from distant regions, transported them to Italy, where local craftsmen produced the finished goods, which the merchants then bought, transported, and sold. Thanks to this technique, the bank was born, facilitating the movement of capital and solving the issue of currency exchange. By this time, merchants were well-educated, skilled in accounting and law. They spent their apprenticeship years in commercial offices, gaining practical experience and learning foreign languages (French was the most important). They were well aware of the quality and price of goods and the subtleties of sales. They learned how to reduce risks and could decide whether to operate as individuals or in partnerships. They were charming and good at making connections, obtaining information through well-established networks, and were therefore more broad-minded than their peers. With the expansion of commercial activities came the modern capitalist organization: merchant or trading companies controlled not only trade but also manufacturing. Furthermore, they increasingly handled financial transactions as well.

The businessmen of the era granted large loans to popes, rulers, and princes in exchange for commercial privileges and monopolies. The Bardi and Peruzzi banking houses supported King Edward III of England and Robert of Anjou with large sums, but the failure to repay these loans led to their bankruptcy. The Medici bank, learning from this, avoided such risky deals for a long time. The Italians dominated European trade thanks to their initiative, adventurous spirit, and more developed commercial tools (promissory notes, double-entry bookkeeping). Venice, Genoa, and Florence shared this leading role, with Florence being the most important financial center in Europe.

In the 15th century, commercial partnerships replaced individual merchants (Genoa - commenda, Venice - colleganza), reducing the risk associated with business ventures. These companies were typically organized for a single venture, in which a silent partner provided the funds necessary for the merchant to complete the transaction. If there were losses, the financial supporter bore the cost, but in case of profit, they received three-quarters of the gain in addition to their original investment. A merchant could contract with multiple financiers for the same venture, sharing both profits and risks. Originally formed for a single journey, these partnerships often persisted across several ventures, leading to the establishment of the San Giorgio house in Genoa, which grew into the most significant financial organization in the West and lasted for nearly four centuries. Even the state could not exercise control over it, and its transactions and administration were sharply separated from the state.

In Florence, government officials were mere puppets under the economic power of the Medici family. In the 14th century, the giant companies of the Bardi, Peruzzi, and Acciaiuoli families were organized. Their networks were highly centralized, managed by a director in Florence, with branch offices led by agents who were often partners in business. They had limited opportunities for initiative and were under strict control. Occasionally, they were moved to different locations to prevent them from forming too close a relationship with local leaders. The downside of centralization was that the failure of one branch could bring down the entire network. Recognizing this, the Medici avoided catastrophic failures by maintaining a more flexible system. Their innovation lay in having branch managers contribute to the initial capital and share in the profits, making them more invested in the success of the businesses. The branches were autonomous and loosely controlled by the central office, creating a decentralized system. The Medici bank's greatest revenues came from their Florence and Venice offices, while their Roman branch was also highly profitable. They managed a significant portion of the income flowing into the Holy See from the entire Christian world and were trusted by Roman clergy to manage their wealth. They conducted profitable financial transactions with large sums of cash. The annual profit could reach 30% of the invested capital. They did not reinvest this money into their businesses, but instead bought real estate in Florence and its surroundings, which significantly increased the family wealth.

The Medici bank reached its peak influence under Cosimo de Medici, who tripled the number of branches. New branches were opened in Bruges, London, Avignon, and Milan. After Cosimo's death, the bank began to decline as his successors proved ineffective. The expansion of the Ottoman Empire and the financial crisis of 1464-65 also affected Florence. Branches sought independence, and the financial support from the Burgundian ruler made the French king an enemy. The alum crisis added to the difficulties. Alum was one of Italy's key products, used in medicine, leather tanning, and especially in fixing textile dyes. The demand for Italian fabrics relied on the colors, and alum was crucial in wool and silk dyeing. The best alum deposits were in Asia Minor, with smaller quantities and lower quality in Castile. Ottoman expansion cut off access to alum, but in 1461, high-quality alum deposits were discovered in papal territory. The Medici bank became the main shareholder of the Societas Aluminium company, which was organized to mine, transport, and sell alum. In 1476, Pope Sixtus IV took the alum monopoly from the Medici and entrusted the management of the Holy See's revenues to their main rivals, the Pazzi family. This was a heavy blow to the network, as the Roman branch was the most profitable at that time. The Medici company was born and fell with the fluctuations of the economic cycle. The Medici family, which lasted 97 years (1397-1494), was the prototype of Italian economic organizations—a company that engaged in financial, commercial, and industrial activities. It operated on an international scale, yet was closely tied to its home city of Florence.

Paul Larivalle "La vita quotidiana in Italia ai tempi di Machiavelli, Milánó 1984., ford. Somlai Katalin Francois Place "Kereskedők könyve", Elektra Kiadóház, 2000