Business Insider has a fantastic summary of a economic and political history of Venice from 800-1350. It concludes that trade along with an open and upwardly mobile society made Venice great and that the concentration of economic and political power in the hands of a few oligarchical families is what ultimately brought it down. Here's the bottom line:
It's a lesson worth remembering about the benefits of an open society, and the costs of excessive concentration of political and economic power.
More below.
The Business Insider summary has an unfortunate headline: "How Globalization Created And Destroyed The Most Economically Innovative City In Medieval Europe". Try to get past that, because the rest of the article doesn't really address globalization so much as it addresses issues of equality of opportunity vs. concentration of wealth and power.
Venice became the economic superpower of its day and this was a very good thing:
The most important change caused by the resulting influx of wealth was the end of hereditary absolute monarchy in Venice. The Doge (the Venetian head of state), was popularly elected only in the loosest sense before 1036. The Doges had come from one of three families, had absolute power, and could appoint their own successor.
As merchants became increasingly wealthy and powerful, the Doges became increasingly constrained. In 1036, a wealthy merchant was elected, leading to real elections and explicit limits on Dogal powers.
The environment allowed for many innovations in early forms of contract law and business organization (emphasis mine):
It introduced economic mobility to Venice, and allowed a larger section of the population to access international trade, wealth, and political power. There was no hereditary route to power, it was earned through wealth and commercial prowess.
The paper gives the example of Zaccaria Staganzo, the grandson of a slave, who was successful in trade that his descendants served on several iterations of the ruling Great Council.
These institutions and the mobility they provided let talent rise to the top, and ensconced a series of egalitarian economic institution that allowed Venice become a commercial and maritime power
Sounds like some republican wet dream, right? But basically it's the story of upward mobility in an environment of (relatively)
equal opportunity - at least compared to forms of heriditary rule.
But then comes the backlash from the elites (emphasis mine):
The wealthiest and most powerful families feared erosion of their status. In 1297, they managed to pass the first of a series of laws (known as the Serrata) that gave control of Great Council elections to a few powerful families....
They essentially cut off the poor from engaging in long distance trade by limiting the most lucrative routes and goods to a select few, most notably with a 1324 law called the Capitulare Navigantium....
Over time as political power and wealth grew increasingly concentrated, and the egalitarian institutions that had made Venice so wealthy eroded, the city declined as a maritime and economic power.
Caveats and apologies:
I'm not a historian, so I apologize in advance for any sloppiness in the way I brought this report to you.
The piece in busnessinsider.com seems to be poorly edited, and perhaps poorly written. Make of that what you will.
The original paper is available at http://www.nber.org/... It costs $5. I was too cheap and lazy to buy it and absorb it. You can get it free if you are a journalist, or have a .gov email address.