And the principle goes farther. In Adam Smith's not altogether coherent discussion of the general question,[559] the unprofitableness of slave labour in comparison with free is urged, probably rightly, as counting for much more than the alleged bull of Alexander III (12th century); while the interest of the sovereign as against the noble is noted as a further factor. As regards the "love of domination" to which Smith attributes the slowness of slave-owners to see the inferiority of slave labour, it is to be remembered that the Roman slave-owner was fixed in his bias by the perpetual influx of captives and cheap slaves from the East; that this resource was lacking to the medieval Italians, who had to take the costly course of breeding most of their slaves; and that in such circumstances the concurrent pressure of all the other causes mentioned could very well suffice to make emancipation general.

While the lowest stratum of the people was thus being raised, the state of war was for a time comparatively harmless by reason of the primitiveness of the fighting. The cities were all alike walled, and incapable of capture in the then state of military technique;[560] so they had periodical conflicts[561] which often came to nothing, and involved no heavy outlay; even the long struggle with Barbarossa was much less vitally costly to the cities than to Germany. Frederick's eight variously devastating campaigns, ending in frustration, were the beginning of the medieval demoralisation of Germany,[562] to which such a policy meant retrogression in industry and agriculture; while the Lombards, traders and cultivators first, and soldiers only secondarily, rapidly made good all their heavy losses.

It was when the practice of war grew more and more systematic under Frederick II, and the policy of cities became more and more capricious for or against the Emperor, that their mutual animosities became more commonly savage. Thus we read that in 1250 "the Parmesans were overthrown by the Cremonese, losing 3,000 men. The captives were bound in the gravel-pit near the Taro ... the whole population seemed to have been captured. The Cremonese tortured them shamefully, drawing their teeth and ramming toads into their mouths. The exiles from Parma were more cruel to their countrymen than the Cremonese were."[563] And, indeed, the Parmesans a century before had burned Borgo San Donnino and led away all its inhabitants as prisoners.[564] Now the Cremonese threw into prison 1,575 of their Parmesan enemies; and when after a year the dungeons were thrown open, only 318 remained alive.[565] Thus civilisation in effect went backwards on several lines at once, the spirit of internecine strife growing step by step with the economic process under which the community divided into rich and poor, as formerly into noble and plebeian.

Up till the end of the thirteenth century, however, the growth of capital went on slowly,[566] and the division between rich and poor was not deep, the less so because thus far the middle and upper classes held by the sentiment of civic patriotism to the extent of being ready to spend freely for civic purposes, while they spent little on themselves as compared with the rich of a later period. So that, although the republics were from the first, in differing degrees, aristocratic rather than democratic—the popolo being the body of upper-class and middle-class citizens with the franchise, not the mass of the population—and though the workers had later to struggle for their political privileges very much as did the plebs of ancient Rome, the economic conditions were for a considerable period healthy enough. A rapid expansion of upper-class wealth seems to have begun in the thirteenth century, in connection, apparently, with the new usury[567] and the new monopolist commerce connected with the Crusades; and it is from this time that the economic conditions so markedly alter as to infect the political unity and independence of the republics without substituting any ideal of a wider union.

Much of the wealth of Florence must in early republican times have been drawn from the agriculture of the surrounding plains, which had a large population. Machiavelli (Istorie fiorentine, 1. ii) states that when at the death of Frederick II the city reorganised its military, there were formed twenty companies in the town and sixty-six in the country. Cp. Hallam, Middle Ages, iii, 365. Dante (Paradiso, xv, 97-129) pictures the Florentine upper class as living frugally in the reign of Conrad III (d. 1152). Borghini and Giovanni Villani decide that the same standards still prevailed till the middle of the thirteenth century. (Cited by Villari, p. 200, and Testa, pp. 89-91: cp. Riccobaldi of Ferrara, there cited from Muratori; Pignotti, Hist. of Tuscany, Eng. tr. iii, 293; Trollope, History of Florence, i, 34; and Hallam, Middle Ages, 11th ed. iii, 342-44.) If these testimonies can be in any degree trusted, the growth of wealth and luxury may be inferred to have taken place in part through the money-lending system developed by the Florentines in the period of the later Crusades, in part through the great commercial developments.

The wool-trade, in which Florentines soon surpassed Pisa by reason of their skill in dyeing, was a basis for capitalistic commerce, inasmuch as the wool they dyed and manufactured was mostly foreign, the Tuscan region being better suited for the growing of corn, wine, and olives than for pasture. Already in 1202 the Florentine wool trade had its consuls. (Villari puts these much earlier. He traces them in 1182, and thinks they were then long established. Two First Centuries, pp. 124, 313.) Woollen-weaving was first noticeably improved by the lay order of the Umiliati at Milan about 1020; and this order was introduced about 1210 into Florence, where it received special privileges. Thenceforward the city became the great emporium for the finer cloths till the Flemings and English learned to compete. (Pignotti, Hist. of Tuscany, as cited, iii, 265-70.)

The silk manufacture, brought into Sicily from the islands of the Archipelago by Roger II in 1147, and carried north from Sicily in the reign of Frederick III, seems to have existed in Florence at the beginning of the thirteenth century, but to have flourished at first on a larger scale at Lucca, whence, on the sack of the town by Uguccioni della Faggiola in 1315, most of the Lucchese manufacturers fled to Florence, taking their trade with them. (Pignotti, iii, 273-74; Villari, Two First Centuries, p. 323.) Many had fled to Venice from the power of Castruccio Castracani, five years earlier. (Below, p. 243.) Being much more profitable than any other, by reason of the high prices, it seems to have speedily ranked as more aristocratic than the wool trade; and when that declined, the silk trade restored Florentine prosperity. (Villari, as cited.)

The business of banking, again, must have been much developed before the Bardi and the Peruzzi could lend 1,500,000 florins to Edward III of England (G. Villani, xi, 88; xii, 54, 56; Gibbins, History of Commerce, 1891, pp. 47, 48; Hallam, Middle Ages, iii, 340. Pignotti, iii, 279, Eng. tr., estimates the sum lent as = £3,000,000 of modern money). This function, in turn, arose on the basis of commerce, and the cambisti are subjects of legal regulation in Florence as early as 1299. (Pignotti, iii, 276.) On this line capitalism must have been developed greatly, till it became the preponderant power in the State. Even as the kings and tyrants were enabled, by borrowing from the bankers, to wage wars which otherwise might have been impossible to them, the republican statesman who could command the moneyed interest was destined to supersede the merely military tyrant. In Genoa the bankers coalesced in a corporation called the Bank of St. George, which controlled politics, traded, and even made conquests, thus giving a historic lead to the Bank of Amsterdam. (Cp. Hallam, Middle Ages, iii, 341; J.T. Bent, Genoa, 1881, ch. ii.)

Summing up the industrial evolution, we note that about 1340 there were 200 cloth factories in Florence; and a century later 272, of which 83 made silk and cloth-of-gold. At the latter period there were 72 bankers or money-changers, 66 apothecary shops, 30 goldbeaters, and 44 of goldsmiths, silversmiths, and jewellers. The artisan population was estimated at 30,000; and gold currency at two millions of florins (Pignotti, iii, 290-91). Concerning Milan, it is recorded that in 1288, a generation after it had lost its liberties, it had a population of 200,000 (certainly an exaggeration), 13,000 houses, 600 notaries, 200 physicians, 80 schoolmasters, and 50 copyists of MSS. (Hallam, Middle Ages, i, 393, citing Galvaneus Flamma; cp. Ranke, Latin and Teutonic Nations, Eng. tr. p. 111.)

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