Byzantine economy

The Palaiologoi tried to revive the economy, but the late Byzantine state would not gain full control of either the foreign or domestic economic forces.

Constantinople remained the single most important commercial centre of Europe for much of the Medieval era, which it held until the Republic of Venice slowly began to overtake Byzantine merchants in trade; first through tax exemption under the Komnenoi, then under the Latin Empire.

[4] Areas close to the sea featuring cereal crops, vines, and olive groves (the interior of the Balkans, and Asia Minor concentrated on stock raising) were relatively well-favored, and appear to have played an important role in the development of the Byzantine economy.

There was in principle a clear distinction between tenants who lived on the estates (and owed dues to the master of the place), and the village inhabitants, many of whom owned land, and consequently paid taxes to the state.

[8] From the 10th century on, large estates assumed the leading role that had been held until then by villages, albeit in an economy that was henceforth orientated toward demand, with monetary exchanges taking a larger share.

Indeed, it is estimated that areas under cultivation must have almost doubled, and that the extension of crops might have affected a shift in the location of grazing lands, and pushed back the woodlands.

But the progressive impoverishment of the peasantry, entailed the decline of a certain aggregate demand, and resulted in a concentration of resources in the hands of large landowners, who must have had considerable surpluses.

[16] The upper levels of the aristocracy lost their fortunes, and eventually there was a concentration of property on the hands of the larger, and more privileged monasteries, at least in Macedonia.

This was a blessing for Byzantium in more than one way; the economy, the administration of gold coinage and the farming of the Anatolian peninsula served to meet the military's constant demands.

Since Byzantium was in a constant state of warfare with her neighbours (even if only by raiding) the military required weapons to be manufactured by the bigger cities (such as Thessaloniki) whilst the smaller towns were subject to grain, wine and even biscuit requisitions by Imperial officers.

As gold coins were spent on soldiers to serve in the army, these would in time spend their money acquiring their own goods and much revenue would return to the state in the form of taxation.

The Byzantine economic recovery in the early 9th century can be seen by the fact that Emperor Theophilos was able to leave 7,000,000 nomismata/31.5 tonnes of gold in the imperial treasury for his successor in 842.

[40] A Venetian embassy visited Constantinople in 1184 and an agreement was reached that compensation of 1,500 pounds of gold (or 108,000 hyperpyra) would be paid for the losses incurred in 1171.

[46][47] The impoverished Latin emperors melted down statues for coin, while the Venetians exported their declining profits, along with choice relics and architecture spolia for their churches.

In 1282, Michael VIII was forced to drain the treasury to pay the enormous bribe of 60,000 hyperpyra to King Peter III of Aragon to invade the Kingdom of Sicily.

[49] Constantinople became once more, as in the seventh and eighth centuries, a ruralized network of scattered nuclei; in the final decades before the fall, the population numbered 70,000 people.

[50] Gradually, the state also lost its influence on the modalities of trade and the price mechanisms, and its control over the outflow of precious metals and, according to some scholars, even over the minting of coins.

[54] In February 1424, Manuel II Palaiologos signed an unfavorable peace treaty with the Ottoman Turks, whereby the Byzantine Empire was forced to pay 300,000 silver coins to the Sultan on annual basis.

[55] The exact amount of annual income the Byzantine government received, is a matter of considerable debate, due to the scantness and ambiguous nature of the primary sources.

[64] Coinage was the basic form of money in Byzantium, although credit existed: archival documents indicate that both banking and bankers were not as primitive as has sometimes been implied.

[66] The Byzantine Empire was capable of making a durable monetary system function for more than a thousand years, from Constantine I to 1453, because of its relative flexibility.

[75] The reform of Alexios I Komnenos put an end to this crisis by restoring a gold coinage of high fineness, the hyperpyron, and by creating a new system destined to endure for about two centuries.

[78] By the end of the 12th century, especially from 1204 on, the political fragmentation of the empire resulted in the creation of coinages that were either "national" (e.g. in Trebizond in 1222, in Bulgaria in 1218, and in Serbia in 1228), colonial or feudal.

[79] This situation stands in contrast with the monopoly that Byzantine currency had enjoyed until the 12th century, within its own frontiers, and through its diffusion in the lands beyond — a measure of its political and economic influence.

Raw silk was bought from China and made up into fine brocades and cloth-of-gold that commanded high prices through the world.

[83] The other commodities that were traded, in Constantinople and elsewhere, were numerous: oil, wine, salt, fish, meat, vegetables, other alimentary products, timber and wax.

[88] The two northern Italian trading powers created the conditions that allowed them to reach any point in Byzantium, and to put the entire economic region in the service of their commercial interests.

Gradually, the state lost its influence on the modalities of trade and the price mechanisms, and its control over the outflow of precious metals and, according to some scholars, even over the minting of coins.

Late Byzantine officials supposed to implement a regulatory policy used the state prerogatives placed into their hands to pursue their private businesses.

[51] The Byzantine GDP per capita has been estimated by the World Bank economist Branko Milanovic to range from $680 to $770 in 1990 International Dollars at its peak around 1000 (reign of Basil II).