The Economy of Renaissance Florence (review)

In the historiography of Renaissance Florence, Richard A. Goldthwaite continues to assert a commanding presence. Over his distinguished career, his exhaustively researched books have taught us much about the economic life of the Tuscan city, from its leadership in banking and finance to its textile industries, building, private wealth, and demand for art. For those familiar with his explanation of Florence’s extraordinary prosperity from the late fourteenth through the sixteenth centuries, The Economy of Renaissance Florence will sound some familiar notes. After adding considerably over the years to our understanding of distinct sectors of Florentine economic activity, however, the author now sets out to examine the economy comprehensively, as an organic unit of analysis. Therefore his book provides an ambitious synthesis but also a sweeping perspective that will become indispensable for any future study of the topic.

According to Goldthwaite, Florence emerged as one of late medieval and Renaissance Europe’s most thriving cities by developing the largest and most integrated trade and banking networks in the West. Part 1 of his impressive book focuses outward, examining the ingenuity of the city’s merchant entrepreneurs in securing Florence’s international leadership in industry, commerce, and banking from the fourteenth through the sixteenth century. Part 2 turns inward, looking at the various sectors of the city’s economy, from textile production, banking, and credit to labor and the workforce. Finally, the author considers the urban context of all of this economic activity, including the role of the Florentine government, the ties between the urban and regional economies, and the effect of the city’s accumulation and distribution of wealth by patricians and the middling classes alike.

A latecomer to the commercial revolution, Florence quickly emerged at the forefront of the Tuscan (and Italian) economy in the thirteenth century, surpassing the medieval leaders in textile production (Lucca) and banking (Siena), to become one of Europe’s industrial powerhouses and the undisputed capital of finance. By focusing on its immediate needs—securing provisions and work for its growing urban population through trade and manufacturing—Florence achieved prosperity by setting up operations in various European centers. Driving its commercial expansion were textiles. The wool and later silk industries were entirely dependent on the importation of raw materials and the exportation of finished products for sales abroad. The Florentines excelled at both, turning local manufacturing into international businesses that placed Florence at the center of a vast European network connected to such far-flung places as Lisbon, Cracow, and Ragusa.

The entrepreneurial zeal of Florentine merchants made the late fourteenth-century city one of the most affluent industrial centers of Europe, with an economy strong enough to withstand the twin blows of bankruptcy in several of its major banking houses and the Black Death, which by one account reduced the urban population by three quarters. Florence was able to recover more quickly in part because of its well-established networks, which moved beyond commerce in goods to traffic in money. The creation of bills of exchange and other credit instruments enabled Florentines to pay debt without having to transport cash, forever transforming the Western economy by this refinement of banking and business practices.

Within the city, the government’s honing of a coherent political elite in the fifteenth century (from the loose corporatism that preceded it) accommodated and indeed encouraged these economic innovations. As the wealth flowing in from textile profits and banking abroad fueled increasing demand for consumer goods and services at home, Florentines were able to meet demand with little need for imported manufactured goods. Workers were well prepared to engage in the marketplace in the context of a stable government and a judicial system that guaranteed the sanctity of contracts, regardless of the social rank of the signer. The implications for social identity and mobility were significant—painters, for example, gained more cultural status than any other European artisan over the course of the fourteenth, fifteenth, and sixteenth centuries and emerged as a uniquely indentifiable...