False Economy - Alan Beattie [24]
Interestingly, some of the successors to Rome were also in Italy: the city-states of the medieval period, notably Venice and Florence. Yet they exhibited the opposite characteristics. They lived mainly by their wits and their skills, rather than by conquest. Along with similar cities in early modern northern Europe (Antwerp, Amsterdam), the likes of Venice were settlements that acted as trading entrepots for an entire region.
Venice, which in 1330 was the third-largest city in Europe, thrived on providing finance and commercial services to the peoples around the Mediterranean. Venice and other Italian city-states featured and sometimes pioneered many of the instruments of modern financial capitalism: bills of exchange to finance contracts, trade credit to insure sellers against nonpayment, forward-selling markets to fix prices months ahead of delivery, private individuals lending to public authorities. Florence became the banker for much of Europe, and its coin—the gold florin—the standard currency for international trade. Such cities relied on their ability to conduct business for any economy within trading or communicating reach. They traded goods, services, and money on behalf of others. To earn a living in this way, they had to sell their own ability to sell.
But what is the point of cities, in the end? For centuries, the move toward concentration of people in towns all over the world has been driven by an unrelenting economic logic. And this logic followed the basic human hierarchy of wants. First came food, shelter, and basic clothing, which could be produced in the countryside—first hunted and gathered, and then farmed. Then, as agriculture became efficient enough to move beyond hand-to-mouth subsistence cultivation, came better clothing and material possessions made by nonfarmers, or farmers with spare time on their hands.
They did not absolutely have to live in bigger settlements, at least not at basic, personal-scale levels of production like hand-weaving and wood-carving. The origin of the expression "cottage industry," after all, is in the fact that rural dwellers could move beyond farming without moving off the farm. But quite often they did. (Humans are social beings: they like living next to each other.) And even without specialist craftspeople moving to the city, an economy where food and goods were traded meant having centers of trade, so towns emerged, and enlarged through markets, commerce, and transport, if not by manufacture. The size of urban populations, certainly in medieval Europe in the first half of the second millennium, was a good indicator of general prosperity.
Once in train, this process rarely went into permanent reverse, and in fact accelerated when economies moved into industrial production. Crudely put, the profits needed to drive industrialization came from more productive agriculture. More productive marketized agriculture almost always meant bigger, more efficient farms—and fewer farmers on the land. As the Industrial Revolution took hold, factories required workforces both large and concentrated, and trade between them in turn increased demand for transport hubs. Thus were rural economies urbanized. People were both pushed from the countryside by the increasing mechanization of agriculture and pulled toward the city by the growth in better jobs with a future.
Being urban, or urbane, is inescapably bound up with the modern, in politics, philosophy, language, and culture as much as in economics. As the philosopher Rene Descartes said of Amsterdam in 1631, cities are an "inventory of the possible." Likewise the old German proverb "Stadtluft macht frei"—City air makes you free. Though the goods they were trading may have been made by enslaved colonies or bonded serfs,