For many of the younger generation, handicapped as they are by a school curriculum starved of culturally meaningful content, ancient history began with the 1968 Summer of Love, and the Reformation with the rise of the Sex Pistols a decade later. As for the ignoble Fourth Estate, our oft-repeated comparison of the noughties credit crunch with the 1930s Great Depression is made possible thanks to Google and a few Wikipeding historians with spare time on their hands. We call this ‘desk research’.
Today’s economic woes are portrayed by many pundits as depending on a unique set of circumstances that nobody could have foreseen. But according to Reading University economic historians Adrian Bell, Chris Brooks and Tony Moore, a similar credit crunch occurred during mediaeval times. All is explained in the latest issue of Society Now: a quarterly magazine published by the Economic and Social Research Council.
In the late thirteenth century, a group of less than mutual Italian merchant societies known as the Ricciardi of Lucca acted as bankers to wealthy Europeans including the Bishop of Rome and the English crown. By the early 1290s, however, the Pope had withdrawn most of his deposits, and the French crown levied a punitive tax on the bankers. Then, in 1294, English king Edward Longshanks (the bastard who had Mel Gibson hanged, drawn and quartered) called on the Ricciardi to raise the funds required for his many military adventures.
Unfortunately for Edward, the bankers’ assets were tied up in loans and trade, and they failed to raise short-term loans from fellow merchants, the interbank markets being frozen then as they are now. The Ricciardi lamented that “it seems that money has disappeared” and “everyone to whom we owed money ran to us and wanted to be paid”. The king didn’t take kindly to his demand for money being refused by these foreigners in fine silks, and his response was to seize all their assets in England, thereby bankrupting the merchant societies.
Longshanks replaced the now asset-bare Ricciardi with another group of Italian financiers – the Frescobaldi – but these early capitalists experienced a loss of customer confidence and run on the bank after taking on the English monarch as a client.
So is history repeating itself some 700 years following the mediaeval financial crisis? In some ways, possibly, but, this time around, King Grim Gord the Last is bailing out the banks, and the peasants are threatening to string the bankers up with piano wire.
We live in interesting times.