There’s a 13th-century building in Florence called Orsanmichele. Statues of the saints line its exterior walls. There has to be a back-story. There is. It’s the story of how Florence crawls out of the Dark Ages – taking the rest of the western world along with it.
To recap from last time, we go back to the Dark Ages – 12-century Tuscany. Much of the local population was serfs working and living on land owned by a lord. In emerging towns like Florence, weaving wool into cloth was one of the area’s main activities. Weaving was something each household did for itself.
A New Way of Working
Enterprising weavers in Florence decided to try and work together in a new way. They divided the weaving process into stages, then asked people to specialize in a particular stage. Dyers would only dye wool. Cleaners would only clean wool. And so on.
Over time, people thought of ways to do each step more effectively. Before long, as a group, they were producing high-quality cloth faster than the local sheep could provide wool.
Their results didn’t go unnoticed. Physicians and pharmacists teamed up. So did Judges, Lawyers, and Notaries. The groups were called “guilds.”
A guild was like a corporation, a labor union, and city government rolled into one entity. Guilds elected officers, established codes of conduct, and provided representatives that formed a city council.
Eventually there were 21 guilds, including ones for Shoemakers, Blacksmiths, Leather Workers, Armorers, Workers in Wood and Stone, Winemakers, Innkeepers, and Butchers.
Orsanmichele is the guilds’ chapel. The statues lining its exterior walls represent the patron saint of each guild.
Just about everyone was getting organized, and as a result, all sorts of higher-quality goods were being created for lower cost. After being mired in the stagnant muck of the Dark Ages for hundreds of years, peoples’ standard of living started to improve.
But There was a Problem…
Cloth merchants led the way. They had gotten accustomed to importing ultra-high quality wool from England. They’d send a boat loaded with gold to England, and with luck, it would return with a load of fine English wool.
But as one might imagine, a boat carrying gold from Florence to England was a sweet target for pirates or other scoundrels looking to get rich quick. As pirates learned more about the wool trade, fewer and fewer ships returned safely.
Florentine bankers ran out of luck, and weavers ran out of English wool. There had to be a better way.
Florentine bankers solved the problem by creating the modern-day bank and “bills of exchange.” With a bill of exchange, a guild could borrow money in Florence, then send a bill of exchange to a sheep rancher in England.
The sheep rancher would trade the bill of exchange for money or gold at an office of the designated bank in England. The only thing that had to be shipped from Florence to England was a piece of paper. Pirates would have to find someone else to terrorize.
Double-Entry Accounting
Keeping track of the mounting number of transactions was daunting. And crucial. A lot of money was changing hands.
In order to keep track of their transactions, Florentine bankers developed the double-entry accounting system. Without it, no one could keep track of transactions well enough for anyone else to trust them.
Florentine banks made it possible for the wool guild to buy enough wool to keep up with demand. By the thirteenth century, one in three people living in Florence was working in the wool cloth industry. (The Coat of Arms of the Wool Guild, the Arte della Lana, is shown at the top of this post).
So now we have a group of companies or guilds, a city government with elected officials, and banks, all in existence for the first time in the history of western civilization — all in little old Florence.
Because of these developments, two things came into existence that regular folks hadn’t experienced for hundreds of years — extra income and leisure time. The Dark Ages were starting to brighten up.
But wait! Not so fast. The train of progress was about to be derailed.
To be continued…
