The Medici Bank in 15th century steered Italy through a century of prosperity & turmoil, and ultimately declined in 1494. During its heydays, branches slithered across the European continent, bankrolled the Catholic Church, and shrewdly played politics.

Did the family’s wealth influenced Medieval European politics and was behind their extraordinary political power? Or, was the political atmosphere during the time just ripe enough to catapult the firm into history’s first international banking behemoth?

To understand a thing, any thing, we must know its past..

I. The House of Medici

II. Patriarchs

A. Averardo de Averardo

The Medici lineage started its wealth, honor & prestige from this man. The Bank was the brainchild of patriarch Averardo de Averardo (d. 1318) and the main line of 15th century Medicis goes back to this man whom, along with his sons, established a smalltime banking & commerce business outside Florence. Soon after he died, the enterprise was passed on along the line and found its way into scion Vieri di Cambio’s leadership in the last quarter of the 14th century (1323-1395).

B. Vieri di Cambio

Vieri di Cambio’s tenure is remembered with his dealings with the Curia through their Roman branch. Working with him were Averardo’s two orphaned great-grandsons. During the time, the Bank was not engaged in lending like what contemporary banks do, but was rather engaged in foreign exchange business at the family’s backyard tavola.

Since his sons were still minors, the banking duties were relegated to the two relatives who learned the ropes first hand from di Cambio. The 2 were able to strike on their own when di Cambio died in 1385. At the time of his death, he was one of the wealthiest Florentines. The minor ages of di Cambio’s sons was only one of the reasons why the Medici Bank swayed correctly onto competent command. Among the strokes of good luck that kept the family business intact were the premature deaths along di Cambio’s genealogical lines who were supposedly the heirs of the banking enterprise.

C. Giovanni di Bicci

After di Cambio’s death, the helm of leadership was passed onto Giovanni di Bicci de Medici’s (1360-1429) capable hands. Italy began to lift itself from the misery of the Dark Ages to a grandiose age of Rebirth during this man’s tenure. He learned his apprenticeship well from his Uncle Vieri, and soon after taking control of the Bank in 1385, he shaped its pillars and laid the foundations of Florentine Renaissance that indirectly molded Europe from a backwater into one of the world’s most advanced continent.

During his term, he transferred the Bank’s main headquarters from Rome to family’s turf in Florence. The main branch may be in Florence, but the main fulcrum of the enterprise was the Roman branch which also was the papal bank. Until the Bank’s decline, the Roman branch was the biggest profiteer among the branches. His time saw the family catapulted into the elite business class, and his first step onto prestige was supporting an ex-pirate named Baldassarre Cossa for a powerful position none other than the papacy.

Baldassarre Cossa was a bandit. An ex-pirate, whom with powerful funds from Medici pockets, won the papal seat in 1410 as Pope John XXIII. He headed the Catholic Church until 1415 before being charged by the Council of Constance with heresy & immorality among others. The stage was closed for Cossa, but it was only the beginning of the Medicis’ reign. In his early days,Pope John XXIII appointed the Medici Bank as his personal bank responsible for handling his private affairs, and of the church’s as well – from safekeeping of funds, to the collection of confers around Europe. Seeing that the Bank was efficient for such tasks, the Medici Bank eventually became the official papal bank thereon, rising higher than its contemporaries in the banking industry even after Cossa’s disposition.

During this period, the Catholic Church was in chaos and was split into 2 factions, namely: French Avignon and Roman Italy. This event started in 1378 and was known as The Western Schisms wherein European states vied for their own popes. It only ceased in 1418 when the Council of Constance, composed of Europe’s powerful men, settled the controversy & finally agreed to have only one pope.

D. Cosimo di Medici

With the backing of the Church, the Medici was unquestionably the most influential family in Florence. It even furthered their influence within society & politics when Cosimo di Medici was made head of the bank right after his father’s death. Just like his father before him, he learned the ropes first hand as Giovanni’s apprentice – from careful selection of clients & upholding of the importance of being recluse from public attention, to the symbol of riding a mule in the streets as symbol of modesty. “A modest man can never attract trouble”, Giovanni di Bicci always reminded his son.

Under Cosimo’s vigorous leadership, political connections & social leadership greatly expanded & the Bank saw its first branches established across Europe. From Geneva & the Swiss Alps, to the north in the British Isles and westwards onto France in Avignon & Lyons. During his term, he was made gran maestro and the Medici was the unofficial head of Florentine republic. But, was their bank the main reason for the Medicis’ political muscle? Or, was it their political affiliations that guaranteed them safe business havens? Nevertheless, it was Cosimo himself who indirectly & unintentionally jumpstarted Europe into an age of Rediscovery under the advocacy of his family.

E. Lorenzo di Medici

The death of Cosimo in 1464 saw the decline of the Bank both in political influence & business leadership. The veil of leadership was passed onto Cosimo’s son, Lorenzo ‘il Magnifico’ de Medici. In contrast to his forebears, this heir was in position for only a brief moment, but gave more focus on giving favors for their subjects as an act of patronage to maintain their political standing, than concentrating & enforcing business conventions beneficial to their family banking empire.

In contrast to his ancestors, Lorenzo’s patronage was even more benevolent & sympathetic to the causes of intellectual pursuit. He turned those ideals into works of arts, architecture, literature & philosophies and even medicine.

He commissioned works for great artistic talents like Leonardo da Vinci & Michelangelo. Appointed architect Filippo Brunelleschi to finish the dome of the Florentine cathedral, and even hid astrologist Galileo Galilei from the Spanish Inquisition for his heretic claim that the sun is the center of the universe. Though the decline of the bank & the influence of the Medici diminished during Lorenzo’s era, he contributed so much to Humanity by supporting the works of those artists & intellectuals which eventually gave way to rational thinking & reasoned arguments that still have strong implications felt today.

The ouster of the last de facto head of Florence was marked by turmoil when a zealous monk named Girolamo Savoranola condemned Lorenzo de Medici of heresy. Works he commissioned were too avantgarde then, and the church did not tolerate it. Supporting the creations of those artists & scientists the Medici backed were immoral during the Medieval era. Because of the church’s firm political & societal grip on the population, the church easily used those masterpieces against Lorenzo himself.

Savonarola ordered the population to seek salvation and pray for their souls from eternal suffering. He also mandated the people to burn Renaissance works at the night of the Bonfire of Vanities. Those works were commissioned by the devil, he said, and that devil is Lorenzo himself. The ideas behind those humanist arts were deemed sacrilegious and it was this time that peoples’ support for the Medici began to wane. Virtually, all of Renaissance works were burned in the pyre during the Bonfires, and Lorenzo was forcibly exiled out of Florence. At his deathbed, Lorenzo feared eternal suffering that he asked for Savonarola to give him absolution..

The callous monk damned the Medici.

III. Italy

Some times, when some things are needed to be understood, it’s important to know the contemporary period it happened. Knowing the events that took place around the subject gives hints about the socio-political milieu. It’s crucial to understand the two as it would be easier to comprehend why things happened as they did.

A. Roots & City-States

Florentines were ethnic Italic minority of Italian-European ethno-linguistic descent who lived alongside the Iron Age Etruscan peoples of the Etruscan Civilization.

Co-existence of the two peoples were only possible during the Etruscan League when chieftains of clans across Italy gathered & agreed a clear line of their respective jurisdictions that set the blueprint of Roman city-states.

The concept of city-states was hugely influenced by the Greeks who had their own height of civilization before the Romans. Perhaps we could see how come they were easily influenced:

C. Age of Rebirth

The Renaissance was characterized by the dawn of the Dark Ages and the birth of new & more radical advanced ideas. This influx has never been witnessed since the fall of the Western Roman Empire. The collapse of the Western Roman Empire in 5th century A.D. plunged the continent into anarchy. The central order stitching Europe suddenly obliterated.

When northern tribes of neighboring Germania reached their saturation point for Roman authoritarian allegations, the chieftains finally decided to storm & sack Rome. And stormed & sacked & raped & pillaged they did. This is how immense the Western Roman Empire was at its greatest extent; imagine the vast numbers of peoples who fell on hard times when the central system disintegrated.

The fall of Rome was a symbolic end for Europe as the Romans had dominated the continent for a thousand years. The knowledge of Classic philosophies, ideals & spirit that modeled future foundations of western civilization laid in shambles. It caused shock and confusion that plagued every town & city that formerly of Rome’s. There was no more a fast correspondence between citizens and the slow travel of news caused by the German invasion left the population in wonder, astonishment & even mystical about everything that surrounded them. It was this period that the Catholic Church capitalized on people’s fears of the netherworld, thus began its rise as the supreme authority of the land…and of people’s souls. It was this fear that blindly adhered Europeans to the power of the church, and the holy men greatly benefited from Rome’s downfall.

The Holy See now oversaw. It was during this overseeing that were the Dark Ages.

The Ages were gloomy and characterized by intrigue, fanaticism, violence & abuse of church’s authority. The Classical knowledge accumulated by the great minds of Rome, and of Greece, were of reasoned judgment and put importance on humanity. Those 2 fundamentals of Classical wisdom were too great a threat to the Church that anyone who follow those ideals had gone astray from the Church and doomed to be persecuted.

But how was it even possible that when the Church had absolute rule, a banking family & patron of the arts managed to survive for generations?

Because, it was Feudalism.

After Rome, Ostrogoths were the new players in Italy and saw the establishment of their own kingdom. Under the Ostrogoths, towns & villages were made into medieval communes(2). Around 11th century, political development was happening in Italy and using ancient Roman Republicanism as model, medieval communes were transformed into powerful city-states.

A city-state is totally independent from one another and ruled by its most powerful, affluent & influential family. Florence, Venice, Milan and among others were large trading metropolises able to obtain independence from their formal sovereigns.

Through their social status, vast amount of wealth, political connections, papal networks & keen business ethics, the Medici wielded strong influence in Florence for 300 years.

D. Patronage & Dynasty

From its early years, it was witnessed how potent & powerful tool patronage could be. Giovanni di Bicci had seen this and left no second thoughts supporting Cossa for the papacy. His vouch paid off and right there & then when the Bank was made the official papal bank, the Medici gained protection from the church and being patrons for humanity was not anymore a threat.

The Medicis were a potent force in the Age of Rebirth. Aside from protecting their banking business, they also must maintain their political leadership in Florence. Being tycoons give them political influence. And being politically involved gave them strings to pull for the advancement of their business interest. The one was not strong without the other.

Constructing magnificent buildings & supporting the academe were only some of their strategies to gain the favor of the Florentines. Another way for them to gain the citizens’ sympathy was to give out favors. These favors were available to all citizens, from the lowest pauper to the most talented members of the society. And mostly they benefit most from the talented ones. Building construction was not only for the welfare of the people, but also a statement of the Medici that sends a message.

Patronizing humanity was dangerous at the time when the church had an iron grip in Europe. Yet the Medici, with all its riches, never had a problem buying faith & influence. Along the line, the family were able to produce four popes – Pope Leo X (1513–1521), Pope Clement VII (1523–1534), Pope Pius IV (1559–1565) and Pope Leo XI (1605) – and, 2 regent queens of France – Catherine de’ Medici (1547–1559) and Marie de’ Medici (1600–1610). The family became the hereditary dukes of Florence in 1531.

With kins in powerful positions at different time periods, it is easy to understand how they were able to be so significant, dominant & prominent. Not only during their better days, but even after their decline their shadows still loom over business practices & the arts of politicking.

E. Legacy

The Renaissance is a very important event in shaping our history. It was a turning point and marked by resilience in ideas. Without it, we may never be far-seeing. It freed Man from the shackles of religious zeal, and gave him the key to a deeper outlook in Life.

Enlightening ideas never grew so exponentially until the Medicis came along. With the protection of the church, they were able to touch the human spirit never before witnessed. Under them, it was possible to step over the boundaries of limits of what’s just to be learned. It opened the eyes of mankind that thinking within was at last possible. It made reason the main pillars of explaining the world around us. It advanced science & the arts, and put human emotions at the forefront of rationality.

Not only in humanism their Bank indirectly contributed so much, but also showed how a bank be run by being the first to test the waters of the industry. The most notable is perhaps the improvement of ledgers to track debit & credit. Until now, businesses have benefited from it. They may not have foresaw their testament to mankind but surely they would have grinned because, who would have thought that a small-time money exchange backroom tavola grew into a colossal international bank that laid the blueprints of future business practices & Humanism?

IV. Personal Conclusion

Capitalism wasn’t recognized at this time yet, nor people didn’t have the idea of what it was. There still was no concept of capitalism, just like there was no distinction of what makes one a homosexual in a soldier’s barracks of Ancient Greece. Clearly, there was no idea of a capital; a capital that could be used for investment to advance business interest. It was hard for medieval Italians to accumulate wealth for investment because they’d rather save a family’s patrimony than spending it.

Also, a vital factor contributing to Medici’s vast fortune is geography. We could never deny the influence of which, and geopolitically speaking Italy is sandwiched by Europe at its north and Africa at its south. It sits in the middle of 2 busy trading continents, and surely the Medici benefited from this one.

Looking at the kind of capital the Medici had, they had so much of Social Capital. It was this one that they had so much returns. It was feudal times, and they had to garner the support of the citizen so they would be become the de facto ruler of the Florentine Republic. With regards to the author’s question whether it was politics or business that shoot up the Medicis’ standing, of course it was their business acumen that made it possible to have what they had. They would never have influenced Italy without huge coffers of gold & properties.