The Medici Family operated on the most influential commercial organizations of the Renaissance period (Roover, 1966). According to Heldon (1995) the Medici Family started out as part of the patrician class, not nobility and was seen by most as friends to the common people. The Medici’s would eventually become Dukes of Tuscany and are credited by historians as the first family to set up an empire with money, while previous empires were created with the use of military force (Kim, 2005). The Medici Family history and the enormous impact it had on Italian history is archived in the Archive di Stato in Florence (Roover, 1966). The Medici Family combined banking and commerce to generate great wealth and acclaim (Heldon, 1995). The Medici Family was at the centre of the banking universe (“The Economist,” 1999). The Economist (1999) explains how this banking family provided services to four popes and two queens for over 400 years. The Medici Family Bank was considered the most powerful financial institute in all of the early 15th century Europe. The first Medici Bank was set up by Giovanni di Bicci de Medici in 1392 (“The Economist, 1999). However, due to the depression and the aggression of the French, the Medici Bank eventually failed (‘The Economist,” 1999). The Economist (1999) explains that although the Medici Family were not considered great innovators, they did keep great banking records. The Medici’s were able to take advantage of new techniques they developed to create new ideas like double-entry book keeping, bill of exchanges and book transfers (‘The Economist,” 1999). The Medici’s also used new techniques like branch partnership to solidify their hold on Europe (‘The Economist,” 1999). Because of these new innovations the Medici bank grew rapidly (‘The Economist,” 1999). At the Banks peak, it operated nine branches outside of Florence (‘The Economist,” 1999). Although the other Italian banking houses operated more branches and wielded more power than the Medici’s, the
Medici Bank was still considered the most international banking institution of its time (‘The Economist,” 1999). The Medici’s used their international acclaim to land the business of the Vatican, their most important client (‘The Economist,” 1999). The Economist (1999), explains how this business arrangement brought tithes and taxes due to Rome to Europe. Also during this successful union, more than half of the Banks revenue comes from its Rome branch. The Medici Bank gained enormous clout from their Vatican client (‘The Economist,” 1999). For example, the Bank used its leverage with the Vatican to block the promotion of a cleric to a bishopric until the cleric’s farther had repaid both his and his son’s financial debts to the Bank (‘The Economist,” 1999). Cosimo de Medici, who was placed in charge of the Vatican’s finances, spearheaded these crude and masterful dealings. According to The Economist (1999), the Medici Bank felt that lending money to wealthy Kings and Princesses was a high but necessary risk that would gain them additional clients. This theory and risky business decision went on to prove to be true. Although, other Banks such as the Bardi and Peruzzi collapsed after King Edward III defaulted on his loans the Medici Bank was able to survive (‘The Economist,” 1999). The Medici Bank survived because took on another risky business venture, trade partnerships (‘The Economist,” 1999). The Bank traded in wool, silk and eventually held a near monopoly on the very vital Alum trade (“The Economist,” 1999). Europe quickly learned from the Medici’s that the combination of trade and banking was a powerful alliance (‘The Economist,” 1999). The Economist (1999) goes on to explain how the Banks would use trade and banking to control the prices of imports and exports. The Medici Family created partnerships with Florence, Venice and Naples which resulted in major business ventures all over the world. Peterson (2005), explains how the Medici Family over came the powerful Catholic churches views that money lending was a mortal sin and went on to build a Europe wide Bank. The Medici family worked around this difficulty by developing various ways to make profit that did not include charging their clients interest (Peterson, 2005). The Bank used tactics like declaring returns on deposits as gifts (Peterson, 2005). The Bank also created an exchange rate system were hidden fees could be charged for exchanging currency (Peterson, 2005). According to Peterson (2005), although the Medici Bank use of these methods proved profitable, the Bank still operated in fear of condemnation from the Papal. The pope himself held a loan with the Medici Bank and having the pope as a client went a long way in helping the Medic Bank become the most profitable business in Europe (Donegan, 2004). Johansson (2006) argues that the Medici Family was unique innovators that had the ability to see past their own expertise and use unfamiliar approaches to solve bank problems. In today’s society there is a wide variety of materials that can be used to achieve specific goals, the Medici Family did not have this advantage, and they used whatever material available on hand to visualize a solution (Johansson, 2006).
According to Donegan (2004) the Medici’s didn’t just become one of the most influential families in Italian history overnight. Other ambitious and powerful families that challenged them along the way, but the Medici’s were experts on how to get ahead and stay there (Donegan, 2004). The Medici’s used corruption and violence to make their way up the Florence influential ladder (Donegan, 2004). Donegan (2004) describes how the Medici Family used alliances with friends of friends to help them kill or humiliate anyone that got in their way. The fear of humiliation during the 15th century was considered worse than death (Donegan, 2004). These events of tyranny led the Medici family to be called the Godfathers of the Renaissance (Donegan, 2004).
Hale (2004) explains that the Medici Family were not just bankers; they also were politicians and often held high public offices. For example, Ardingo de Medici, the first Medici to hold a high public office, was elected to the office of Gonfaloniere in 1296 (hale, 1975). The position of Gonflianere was held by other members of the family as well, like; Salvestro de Medici and Giovanni de Medici (Hale, 1975). Although some in the Medici family used public office to increase their family economic status and egos, most of the truly powerful Medici family members ruled from behind the scenes (Hale, 1975). Hale (2004) also explains the impact other Medici family members; Cosimo il Vecchio and Lorenzo de Medici had on Florence and Italy. Cosimo, a Medici elder, shared his early years with both the upper and middle classes (Hale, 1975). He was elevated to the head of the family business after the death of Giovanni in 1429 (Hale, 1975). Cosimo is considered by historians as the real founder of the Medici political fortune (Heldon, 1995). During his reign Cosimo helped to increase Florence’s wealth and cultural prestige (Hale, 1975). Cosimo was able to accumulate great wealth for the family even though his battles with the Albizzi Family resulted in his banishment (Heldon, 1995). The support that he gained from the peoples helped him to return to prominence in 1434. Florence treated Cosmio like a king and he remained in power until his death and under his leadership the Medici’s and Florence prospered. Cosimo was also responsible for the creation of a library that contained collections from artist such as Donatello and Fra Angelico (Hale, 1975). Piero de Medici followed Cosmo’s as the head of the Medici Family (Hale, 1975). Although Piero’s reign was short and mostly unproductive, the tyranny of his son’s Lorenzo and Giuliono had lasting effects on Italy (Hale, 1975). Lorenzo was a hedonist and didn’t possess the economic prowess of his elders. Lorenzo however went on to reign over Florence during what is considered Florence’s Golden Age. Lorenzo’s inability to handle foreign affairs really hurt the Medici Family popularity (Hale, 1975). Lorenzo’s reign ended after his death in 1492 (Hale, 1975). Immediately after Lorenzo de Medici’s death, Girolamo Savonarola, a Dominican Monk, who constantly used his criticism of the Medici Family to gain favor, took control of Florence from Piero after the invasion of the French (Hale, 1975). Even if the Medici rule had not been effected by Piero’s political inabilities and the French invasion, the family rule may have collapsed due to a financial crash (Roover, 1966). During this period the Medici Bank was on the brink of bankruptcy (Roover, 1966). Savanarola was a very stubborn man during his reign and often disagreed with the rulings of the Pope (Hale, 1975). Savonarola’s constant conflict with the Vatican led to his excommunication and eventually to him being tortured and killed by a feed up angry mob. By the year 1512, the Medici Family had once again regained control of Florence (Hale, 1975). Cosimo de Medic I became a duke with the Medici Family and was responsible for making significant changes in Florence. Cosimo I totally moved the city from all foreign controls and eliminated all interference from his ministers (Hale, 1975). Hale (1975) explains that while Cosimo I’s conquest increased Florence’s economic stability, he was very unpopular because people of Florence credited him with taking away Florence’s freedom. The Medici women also contributed to the family’s legacy. During the Medici reign it was well known that if you had political aspiration or wanted to be somebody, one had to marry into the Medici Family (Kim, 2005). French Kings even went as far as to take Medici women as their brides. One the French brides went on to build the des Champs Elysees, which is known as the widest street in the world. She would also go on to build the Palais do Luxembourg (Kim, 2005). The contributions had a very distinct effect on Paris and the city would not be the same today with them. Kim (2005) contributes the creation of the origin of French ballet to another Medici woman. The second French bride’s combination of dance and music was quickly adopted by the Russians and went on to become the origin of Russian ballet (Kim, 2005). Over the next hundred years Florence saw the next generation of the Medici Family concentrate on everything but their family business. They were mostly known for their involvement in numerous murders and lurid affairs (Hale, 1975). It seemed that the last generation of Medici’s family was not interested in political or economic consequence (Hale, 1975). Cosimo’s oldest son, Ferdindino, wife was a barren. His youngest son was more concerned with carrying on an affair that he completed ignored his wife, decreasing any chance of an heir (Hale, 1975). Cosimo’s brother, Francesco Mario, also showed no interest in taking the helm of the family business (Hale, 1975). Francesco was hesitant to leave the cardinalcy and was often said to prefer young boys (Hale, 1975). Francesco also died without an heir (Hale, 1975). After the last Medici, Anna Maria, died the control of Tuscany fell to the Australians, thus ending the Medici line (Hale, 1975). Although before Anna Maria’s death, she ensured that all the Medici treasures would never leave Florence by bequeathing everything to the Grand Duke (Hale, 1975). Roover (1966) explains some of the major factors that contributed to the downfall of the Medici line. The first reason being that succession fell to family members that were not fit to lead or handle the family bank (Roover, 1966). Management of business matters suffered due to the unfortunate line of successions (Roover, 1966). Before this period of bad successions, the family was led by a variety of very talented individuals that had the ability to work one extraordinary successful business venture after another (Kim, 2005). The most propelling reason being that most of the later generations of Medici’s were void of any vision and lacked the ability to foresee or solve problems (Roover, 1966). The Medici’s place in Italy’s history is in scripted forever and will not be easily forgotten. For instance, travel to any place in Florence and one may be annoyed not to see the Medici name displayed in prominent places (Kim, 2005). The Medici’s, while based in Florence, spearheaded one of the biggest financial networks of all Western Europe (Kim, 2005). The Medici’s operated their headquarters out of the Uffizi buildings in Florence and these buildings now house the Medici Family art collections (Kim, 2005). The Medici’s really knew how to make money. For instance, they were avid supporters of Michelangelo. Michelangelo went on to become as important to Italy as Shakespeare is to England (Kim, 2005). Today Shakespeare’s work can be read anywhere for free, while attempting to view any of Michelangelo’s artwork will cost you a trip to Italy and fees for museum admission. In conclusion, the Medici Family played a very integrate part of the Italian history. The Medici’s started out as just a common family, but eventually mixed genes with European Royal Families (Helden, 1995). The family dominated Florentine politics for almost three centuries, including presiding over cultural achievements equal only to those of Athens Golden Age (Heldon, 1995).

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References

Donegan, D., (2004). Godfathers of the Renaissance, Medici, Gods Bankers. Retrieved from http://www.pbs.org/empires/medici/medici/bankders.html
Helden, A. V. (1995). The Galileo Project. Retrieved from http://galileo.rice.edu/gal/ medici.html
Hale, R., (1975). The Medici Family. Retrieved from http://galileo.rice.edu/lib/student _work/florence96/alexc/medici.html
Johansson, F., (2006). The Medici Effect: Breakthrough Insights at the Intersection of Ideas, Concepts, & Cultures. Publishers Weekly. Vol 251, (32) 244-245. Retrieved November 1, 2011, from EBSCO Online Database Business Source. http://web.ebscohost.com
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