Riley for a place to live or conduct business.

Riley LafnitzeggerMedieval HistoryDr. Woods12/15/2017The Economic Disparity of Medieval Florentine People The economic disparity of the medieval Florentine people varied greatly between social status. What we know today comes from personal diaries, book-keepings and the Italian government’s earliest known attempt at compiling a record of Florentine population and wealth. Owning property gave the landowners a very stable source of income, while non-landowners, typically less wealthy merchants, had to find other means to spread the risk of their business ventures. Merchants spread their risk by working in partnerships and having geographically diverse businesses that were promoted by Florence’s location on the Mediterranean Sea. The Late Middle Ages in Florence was a time of uncertainty. Beginning in the early 1300s, the people lived in fear of famine. During this time, nearly one in ten people died from starvation. The scarcity of food drove major price inflation, which harmed the poor people the most. In the mid-1300s, the Black Death struck and casualties spread throughout Europe, in turn decreasing Florence’s population by approximately 55%. A few years later, Florence was engulfed in its own war and internal conflict, specifically the Revolt of the Ciompi in 1378. This group of rebellions, comprised of craftsmen and artisans who were not apart of a guild, resented their exploitation, heavy tax burden and lack of say in the government. While the demographic crisis only worsened the disparity between these haves and the have nots, the Black Death actually improved the economic lot of surviving peasants and laborers because there was now a higher demand for their labor. Throughout these challenging times, the wealthy people continued to prosper. The majority of wealthy people in Florence were those that benefitted from the stable income of rent. After the Black Death, the demand for residences and commercial property dropped, but Florence quickly regained its population through a wave of city migration. By the mid-1400s, Florence’s population was comparable to that before the Black Death. Now, it was again rare for a property to be vacant. Everyone was looking for a place to live or conduct business. The wealthy landowners took out loans to purchase their own homes, buildings, and property. This privilege of ownership afforded them rental income and the ability to pay off any outstanding loans; however, they incurred the expense of maintaining rental properties. Wealthy families also rented out farmland to the lower income farmers who would work the land. A surviving tax survey from the mid 1400s shows the amount of wealth and exact sources of income and expenses that Florentine elites possessed over the span of one year. It shows how significantly rent affects the income of landowning families. The Alberti family of Florence was one of the wealthiest Florentine families. A record of their income is recorded in the Catasto of 1427, which was the tax survey noted as one of the earliest attempts to compile a record of a city’s population and wealth. On a side note, the Alberti family’s survey was known to be written by the wives, widows and minors in the family, because at the time the men accused of conspiracy and were exiled from Florence due to their support of the Ciompi Revolt. Presumably, the men were looking for political gain. Their tax records indicated a series of rental payments made by various laborers to the Alberti family. It includes that of a silk dyer, a blacksmith, a construction worker, a cooper, a lasagna-maker, a barber and a baker. These rents were paid yearly. Their wealth came from their property ownership, which allowed them to rent to other merchants and benefit from their work. In this tax document, the overall income is calculated as property minus obligations equal remainders. This is their version of today’s net income equation, revenues minus expenses equals net income. Clearly property was the main source of income. In the Alberti’s case, it generated a strong 7,198 Florin in 1427. The records also indicate that in addition to being property owners, the Alberti family also owned merchant businesses, and some were members of the city council. All of these provided additional income, but it is said that under the Medici regime, “They also gave up businesses to live off of their landed property.” The Medicis and Albertis were rivals whose banking businesses went head to head. Under the Medici regime, it can be assumed that the Albertis pulled out of the banking industry before accruing any losses. This was not uncommon. In fact, as much as one third of Florentine elites were not active in a profession! Families lived solely off of their real estate investments. Their land generated enough stable income for the family to not conduct business as a whole. In stark contrast, all poor people were propertyless. A poor painter by the name of Jacopo Lancialotti wrote a pitiful description of his life, saying he owns no property in this world, he is diseased, and the sole breadwinner for his soon to be family of eleven. He begged for pity on me, claiming he did not own any property and never got any rest. In describing the poor, it is said that, “… many lived hand from to mouth, moving from employer, from one rented hovel to another.” Clearly, without property financial stability was nearly impossible. In addition to the landowners, the merchants also prospered during this time. Merchants could make a lot of money, but sometimes their business was risky. The Medici family started the first bank of Italy. The family promoted business growth through loans, which allowed people to use these loans to grow their businesses. Merchants grew their wealth through expansion opportunities. Due to the famine and plague, many of their competitors died, and those who lived were opportunistic. They were able to expand their trade routes, vacated by those who died. In addition, since there was now less competition, they could demand more for their goods or services. Depending on the business, profit either went directly into the pocket of the merchant, or went to the business the merchant worked for. Either way, there was more money in everyone’s pockets because each merchant now had a greater demand market. The tragic events of the plague and famine allowed for social mobility for this class of people and with a greater income, merchants were now seen as noble men.A surviving document showcasing the wealth of medieval Florentine merchants is the diary of Gregorio Dati. Dati was a silk merchant who began working at the age of 13 at Giovanni di Giano and Partners’ silk shop. Dati noted that he “won their (his bosses’) esteem.” Personal relationships were critical to advancement in business. This quote shows that Dati had good relations with his boss, which will ultimately lead to career advancement. Dati left the company, but when he returned two years later he was promoted to a partner. Dati invested 300 Florin into the business which granted him ownership of one twelfth of the company. These types of partnerships helped to diversify the risk of some merchants, and allowed for the career advancement of new entrants. In fact, merchants who sold more luxurious goods purchased by people of a higher class became themselves higher in social ranks. “The manufacture of luxury objects, and the relationship with the elites this implied, ensured a maximum of esteem.” Positive personal relationships enabled mobility in an industry and in society.  After di Giano’s death, the business continued as a partnership. It reassigned investment dues and added more partners. Businesses saw the importance of spreading risk, and without the business’s longtime leader, they saw it fit to add partners and spread the risk even more. Years later, Dati started his own silk mercantile company. In his new company, Dati brought in partners from different Italian cities. This allowed him to expand his business, as well as his customer base, in hopes of increasing his income. This diversification strategy also brought some risks. As the primary owner of multiple silk shops, Dati had difficulty managing all of them, and one shop was robbed. Dati had a year’s worth of income stolen from him. There is no evidence that Dati attempted a different, or more secure strategy after the robbery. Although this multi-city venture did not quite work out for Dati, the idea of geographic diversity was gaining momentum in Europe. This was very positive for Florence merchants, due to their location near the Mediterranean sea. The sea provided an easy and quick mode of transportation of goods to, in today’s world, 17 other countries. Italy’s location served as a connection between the Byzantine Empire and Eastern Europe, and their use of the Mediterranean Sea propelled them into the Renaissance. In fact, included in the Catasto of 1427, which I mentioned before, is the “Census of 1427 Companies/Partnerships in Major Industries.” This portion of the document divided companies into high certainty and low certainty, meaning their confidence in succeeding as a business. They were then categorized by industry, and then as Florentine companies in Florence, Florentine companies overseas, and older Florentine companies. In 1427 there were 137 Florentine companies doing business in other areas. Of those companies, 98 of them were considered to be high certainty. In comparison, of the 512 domestic companies, only 302 were considered to be high certainty. Companies were 14.5% more likely to succeed if they were international. Clearly, geographic diversification helped promote the success of businesses, which in turn decreased merchants’ risks. In conclusion, the wealthy Florentine elitists were landowners who earned some, if not all of their income through their property. Merchants, who were recently promoted in status due to the tragedies of famine and the plague, spread risk through doing business in partnerships. Finally, merchants also stabilized and expanded their source of income through geographic diversification, which added a greater number and variety of customers.