Today is Venice’s birthday. According to legend, the city was founded exactly 1,598 years ago today. A small, independent trading state beyond the reach of any overbearing European power, it flourished for many centuries.
Young Venice not only fended off periodic threats from marauding Huns or Franks. The rulers of the fledgling republic explicitly repudiated the idea that anyone else might hold jurisdiction over them, taking the trouble to establish their own independent church of St Mark, separate from – and, in their eyes, equal to – that of St Peter in Rome.
After opting out of the Holy Roman Empire, the European Union of its day, Venice flourished.
It’s hard to imagine a less promising place to establish a successful society than on a mudbank off the north east coast of medieval Italy. There were few natural resources, little agricultural land and lots of malaria. Yet while the rest of Europe wallowed in Malthusian misery, something remarkable happened on the Rialto.
By 1050, what was once little more than a fishing village was home to 45,000 people — a large city by European standards of the time. By the mid-14th century, she had become a city of some 120,000.
Venice grew not only bigger, but richer. Almost alone in Europe between the end of the Roman order and the emergence of the Dutch republic in the 16th century, Venice achieved both an increase in population and a sustained increase in income per person. She was, in John Julius Norwich’s phrase, “the richest and most prosperous commercial centre of the civilised world”.
Venice grew rich thanks to the gains from comparative advantage. Her merchants specialised and exchanged in a way few others in Europe were allowed to.