Northern European Renaissance capitalism

The Renaissance, which spread from Italy to northern Europe, is a phenomenon that, unlike the Italian context, took on not so much artistic as well as economic meanings, so much so that historians speak of Northern European Renaissance capitalism.

“The Renaissance of the North is far from being merely an imitation of the Italian one. If it were not for this, it would be a very superficial phenomenon without great scope. The essential thing is that at the moment in which it accepts the Italian Renaissance, it crosses, completely independently of Italy, a crisis of social and economic transformation […] The great novelty that appeared then was capitalism.”

The freedom to get rich
Up until 1400, big business and big banks did not exist in the north of Italy. They were the capitalists of some powerful Italian families who dominated the business market and influenced the politics of princes and sovereigns.

The first banks, a clear sign of a new mentality, were Italian (Banco di San Giorgio of Genoa in 1407 , Monte dei Paschi di Siena in 1472 was born as an advanced type of Monti di Pietà. from the second half of the fifteenth century, when they appear in Flanders, in France, in England, in the southern German cities of “new men” who have at their disposal a capital of dubious origin who want to invest in order to get rich.They are not the descendants of rich families that have accumulated wealth but men who have new resources: their intelligence and open-mindedness.

A typical example of the new mentality outside of Italy is the birth in Germany of its oldest bank, founded in 1590, the Berenberg Bank of Hamburg, an exquisitely commercial and mercantile activity. The Berenbergs were one of the first families who constituted the ruling class of the free city of Hamburg. The first families meant the descendants of the first Großbürger who were subordinated only directly to the emperor. This group of people included, in addition to Großburger (the highest exponent), also mayors, senators and high priests. It was called the Hanseatic groupto highlight the sense of collegiality (hansa = group).

Following the example of the Berenbergs, banks were established in the Netherlands (1614), Sweden (1668), England (1672), Scotland (1695) within a few decades. Bankers descended indifferently from wealthy landowning families, from military or enriched adventurers, it was enough that they were intelligent and sufficiently ruthless.

Of the Renaissance that is spreading from Europe to Europe, they capture the pre-eminent value: the “natural freedom” of man now freed from the bonds of religion, of the man aware of his “modernity”, who lives in a dimension no longer vertical, but horizontal: in the nature offered to them as a land of new discoveries, conquests, journeys beyond the Pillars of Hercules. They would like to set up their manufactures where the center of trade is, of production: in the cities where the bourgeois thrive in the arts thrive, in the trade guilds that set salaries set by law, the quality of production, the rules of trade. The newcomers want to produce as they like, in the name of “true freedom”, as they say, not the freedom regulated by a thousand laces destined to maintain the privileges of the bourgeoisie. These intruders, who want to break the monopoly of the arts, will therefore be removed from the cities, but they do not give up: with their capitals they will industrialize the countryside.

The industrialization of the countryside
The proliferation of banks grew parallel to the development of city centers and the emancipation of peasants. In the city centers, trade guilds appeared that established salaries set by law, the quality of production, the rules of trade. The bankers became part of this reality, becoming over time an important component of the city’s economy. Supporting (and sometimes overriding) the corporations, they supported the local manufactures economically, favoring their expansion in the surrounding countryside.

They offered them this large supply of work arms accustomed to the hoe but also to the weaving: the peasants who have always been weavers of their garments were the ideal manpower to be exploited with low wages. The arts regulations fixed workers’ rights, protected minimum wages, and ensured, in some cases, aid for disease and old age. With the slow decline of the craft guilds and the consolidation of banking power, all this disappeared into the new manufacturing system. There was no authority or association between the employer and the worker. One bought, the other sold: the price was “free”, ie the strongest.

New industries opened up in the open countryside: the Austrian mines, the “new weaving” in Flanders, England; also the arazzeria became a peasant manufacture. The city industry survived for the local market but “all the new industrial development after the fifteenth century happens… outside it”.

The favor of the principles
In addition to actively intervening on the development of manufactures, bankers were perfectly integrated into local nobility, often in need of loans and economic favors. The result was a lasting and fruitful collaboration for both parties. For example, the Fugger d’Augusta obtained from the Habsburgs the exploitation of the silver mines where they used the labor force of the peasants, with their gold they financed the election of Charles V to emperor, they obtained from Pope Leo X the contract for the sale of indulgences; Giacomo Coeur, a magnate in 15th-century France, obtained the granting of coins by Charles VII, seizing enormous profits.

A new power was born, the first sign of capitalism as conceived today.

“By now the great European powers are no longer represented by sovereigns or princes; who counts, who can make a peace or war possible or impossible, who elects the emperors and finances the armies is a group of new characters, the capitalists, the modern businessmen. »

“Protected by sovereigns, capital puts its resources and credit at their disposal in exchange. Thanks to it the sovereigns can do without resorting to the assemblies of the States to get the means to make war. Their bankers free them from the painful control of their subjects. The long struggle between Charles V and Francis I would be incomprehensible without the high finance contest. The Fuggers and many other houses in Antwerp did not cease, throughout the emperor’s reign, to lend him colossal sums that he devoured [and which cost him hundreds of thousands of ducats of interest]. »

“Between 1555 and 1557 the only Affaitads of Cremona lend to the king of Spain no less than 200,000 scudi, and several million ducats lend the Centurions of Genoa at once. »

The support of the nobility to the bankers crushed what remained of the craft guilds and small industries of the city that ” can no longer fight on equal terms against these men who have their agents everywhere, hoard, monopolize, support the new political forces “.

Mercantile freedom
Those who grew rich in geographical discoveries were not Spain and Portugal but foreign suppliers and creditors of their ruling houses: Antwerp became the great reserve of capital to which the sovereigns were forced to resort. At the same time the predominance on the seas moved from the Mediterranean to the Atlantic. “Neither Cadiz nor Lisbon were the heirs of Venice and Genoa.The commercial hegemony, which they had enjoyed until then, passed to Antwerp” (H.Pirenne op.cit ibidem) which became a great international free port, free from customs,duties, impediments of commercial monopoly. The ships arrived in its port loaded with goods and, after the discovery of America, of precious spices and minerals, and from there they left with full holds. In fact, in Antwerp, also favored by its geographical position, men and capitals flowed from all sides, ensuring the maximum development of trade.

“In Venice, the merchants who came to the fairs could not buy that from the Venetians, in Bruges, they had to use a mediator belonging to the bourgeoisie. Here nothing like it. No surveillance, no control. »

Businessmen met in the city, set prices, and risked their capitals: speculation had assumed for the first time an official aspect. A particular building was built at the expense of the city, where capital was invested under its gallery and capital was invested: the Stock Exchange (1531) was created as a precursor and model of those in London and Amsterdam.

The new sense of the city
“For the modern bourgeois, the city is only the place of residence and a business center, no longer the center of his affections, his ideas, his interests. »

The inhabitant of medieval towns was closely connected to the city, his ideas and his very existence were linked to the municipal party to which he belonged. In the lordships the inhabitants depended on the wishes of the lord who decided on their fortunes and fortunes. The city was almost the extension of his palace, he helped to embellish it with works of art and services because all this showed its power.

For the inhabitant of the Nordic communities, the city was simply the place where he resided, if he was an industrialist his interests were in the manufactures in the country, if he was a merchant his business was spread in Europe, if he lived his rent money they were in companies or in loans to princes. In any case, he realized that his money was linked to international politics and therefore needed to be informed of what was happening in the world. He began to develop the mail and soon the press would keep him informed with all the news that was previously transmitted only with private correspondence.

Spanish bankruptcy
Spain, despite its galleons bringing home riches from the Americas, ended up bankrupt. His ruling class was parasitic and unproductive, composed of hidalgo who aspired to become high prelates or great officers of the royal army, and did not bother to profit the immense wealth available, riches of which a good part was already lost in the corrupt meanders of the bureaucratic administration. The nobility in power despised the productive activities, so as to hunt those moriscos and marranos, Moors and Jews, who were also the only ones to treat agriculture and the market.

The Spanish crown continued to be in debt for the whole century with the German and Italian bankers, especially Genoese, until the inevitable bankruptcy that marked the downfall of the small and middle capital. Beyond that, there was a repercussion on the whole European economy. In fact, the precious minerals, which had spread all over Europe from Spain, had inevitably led to price increases. The abundant circulation of precious metals, especially silver, had caused its depreciation which, in turn, diminished the value of money. As a result, since the value of money had decreased, the price of goods increased.

This state of affairs first of all damaged the Genoese bankers who had lent money to foreign princes and received increasingly depreciated interests if they ever received them. Even the noble landowners found themselves in great difficulty to adjust their long-term concessions to increasing inflation. In practice, in all of Western Europe, the Spanish bankruptcy was the ruin of the landed nobility that had long given the land to the peasants for small pre-established sums of money. Instead it was the good fortune of the small farmers who freed themselves from servile ties and enriched themselves with the increasing grain prices.

In Eastern Europe, on the other hand, a strong producer of cereals, where however the properties had never been passed on to the farmers, the increasing prices of wheat increased the fortunes of the landowners. These pushed the production by pressing on the farmers and reducing them more and more to a servile condition.

The capitalist bourgeoisie and the nobility
The price revolution weakened the nobility that continued to enjoy privileges no longer justifiable: from the political class that had previously played a social role, now it was only a parasite of the active society, a privileged element now ready to be suppressed.

But the new bourgeoisie, born with capitalism, which also had all the qualities of common sense and practical spirit to exercise direct management of power, was not yet ready to suppress the privileges of nobility. Vice versa, it went in search of titles that ennobled its acquired wealth. He masqueraded as a noble class , in the belief that power belonged by right and by God’s grace to nobility. In the France of Richelieu, the bourgeoisie acquired public offices and honors. They bought fiefdoms and coats of arms from the broken nobles. As even the Theatrical Comedies of the late seventeenth century reportthe manias of prosperous bourgeoisie multiplied, though clever and clever in conducting their business, they lost their heads, making themselves ridiculous, in order to relate with unfortunate and decrepit noble families.

The capitalist bourgeoisie of continental Europe still had to go on a journey of more than a century to conquer power. Only in England of the Second Revolution (1688 – 1689), the bourgeois and puritan parliamentary forces, who believed in the sanctity of work and profit, would have marginalized the nobility and assumed direct management of politics and economy. The bases were then laid for the start of the Industrial Revolution, the point of arrival for the industrialization of the campaigns begun centuries earlier by the capitalists who came out of the Northern European Renaissance.

Source from Wikipedia