Lorenzo is at the height of his power and security. However, just behind the scenes, the family bank that caused the Medici to come into power in the first place is slowly but steadily falling apart, thanks to the Ottomans, a squabble between English royals, and, most of all, the ugly realities of politics.
Transcript
Now when we last left Lorenzo the Magnificent, he was basking in what I think is safe to say was his greatest triumph, coming back to Florence from Naples with an end to a catastrophic war following behind him. Plus with some more tweaking of the Florentine Constitution and the creation of a new government body, the Council of Seventy, the Medici’s hold on power was secure – well, at least as secure as it could ever be.
Good news continued to trickle in, not just for Lorenzo but for all of Italy. The siege of Otranto struck the Pope and no doubt many Italians with existential terror. But much like how the sudden death of Genghis Khan might have spared western Europe from the Mongolians centuries ago, Italy caught a break thanks to a powerful man’s sudden death. Sultan Mehmed II, the conqueror of Constantinople who saw himself as the true heir of the Roman emperors of old (which may have been why he genuinely wanted to conquer at least part of Italy), died from gout in May of 1481. There was the usual bloody bickering over the succession that happened in Ottoman history and the man who managed to grab the prize this time and become the new Sultan, Beyezid II, was more interested in driving the Venetians out of Greece than in new conquests. These factors likely saved Italy from at least further Ottoman campaigns. Instead, the Ottomans practically abandoned their Italian foothold, allowing Neapolitan forces to recapture Otranto in September of 1481, just a year after the Ottomans first seized it.
Still hoping to set up a mini-kingdom for himself in the Romagna, Girolamo Riario on his own had tried to get Venice to abandon Florence and back his aggressive moves to expand his personal fiefdom. The doge of Venice agreed to recognize Riario as the lord of the strategically valuable Romagna town of Faenza if the Pope would give his approval to their own claims on the duchy of Ferrara. Yet another war had broken out, but this time Girolamo had gone too far for the Pope’s liking. People were sick of having the delicate balance of Italian politics thrown into chaos for the sake of the upstart ambitions of some parvenu, and even Girolamo’s generous, indulgent uncle was enraged that Girolamo had started a war so soon after the last one ended in defeat. Pope Sixtus publicly railed against his nephew’s greed and incompetence, while Rome threatened to boil over. One witness in Rome wrote, “In the Pope’s antechambers, instead of cassocked priests, armed guards kept watch. Soldiers, equipped for battle, were drawn up before the gates of the Palace. All the court officials were filled with terror and anguish; the fury of the populace was only restrained by the fear of the soldiers.” At the historic city of Cremona where peace talks were eventually held, Lorenzo was the star negotiator. And no doubt Lorenzo felt no small jolt of schadenfreude when the Pope declared he would excommunicate the Venetians for trying to annex Ferrara and joined Florence, Naples, and Milan against Venice and his own nephew. An exhausted and broken-down man by this point, Pope Sixtus died on August 13, 1484, just as peace talks were again about to conclude. To give an idea of how unpopular Pope Sixtus became, here’s an epitaph from an anonymous poet: “Sixtus, at least you’re dead: unjust, untrue, you rest now, / you who hated peace so much, in eternal peace. / Sixtus, at least you’re dead, and Rome is happy / for, when you reigned, so did famine, slaughter, and sin. / Sixtus, at least you’re dead, eternal engine of discord, / even against God Himself, now go to dark Hell.” Ironically, Pope Sixtus’ most important contribution to the history of Italy and the Catholic Church wasn’t in anything he actually did as Pope or with the family he worked so hard and sacrificed so many lives to prop up. Instead, it was in a chapel he had built, the Sistine Chapel, which was decorated mainly by artists provided by his own loathed nemesis, Lorenzo de’ Medici.
His greatest nemesis had exited the stage, but Lorenzo clearly never felt secure. How could he, having seen first-hand a conspiracy against his father and then the murder of his brother and an attempt to assassinate himself? Although Lorenzo liked to cultivate an atmosphere of scholarship and inquiry, criticizing his regime was increasingly a risk during his lifetime. His own mother’s cousin, Alessandro Tornabuoni, was tortured and exiled for writing works attacking the Medici. In 1481, three men accused of planning to assassinate Lorenzo were hung at the command of the Signoria and the Council of Seventy without the customary due process. Now, like his grandfather, Lorenzo still played the role of just the first among equals in a free republic. While he might occasionally appear in public in a horse and wearing knightly armor like a feudal noble, he still usually dressed in the clothes of a city patrician, greeted his allies in public, accepted petitions from members of the public, and even held nearly daily audiences in a public square that anyone could attend. However, as often happens with momentous historical change, the ground was shifting under everyone’s feet, even if not everyone noticed. As Alison Brown has argued, the definition of libertas, “liberty”, originally referred to the right of people – well, okay, men of certain rank and economic station – to participate in the government through political offices. By at least Lorenzo’s time, however, the meaning had, consciously or not, been changed to mean a city-state’s independence from foreign influence. More blunt was the increasing use of inscriptions around the city’s public and government buildings that emphasized patriotism, rather than freedom and liberty. Also the busts in the Palace of the Signoria, which were once exclusively the champions of the republican cause in ancient Rome, now by Lorenzo and his father’s time included Roman emperors.
Now, just to refer back to our tangent episode on republicanism, our modern standards of democracy would have been unthinkably extreme to even the republics of medieval and Renaissance Italy. There was no such thing as freedom of speech, at least not the way we think of it. Even before the Medici came along, offending the dominant political faction of a city-state could get you exiled, even for life. But Lorenzo had a network of informants and a government stacked with loyalists who proved they would stretch if not outright break the rule of law in order to defend Lorenzo. Still, Lorenzo was popular enough that even in his own time he was referred to as “Magnifico”, an honorific that was often given to beloved leading citizens in a city but which eventually became strongly connected to Lorenzo alone. Guicciardini was probably summarizing the views of a lot of Florentines when he deemed him a “benevolent tyrant.”
Behind the scenes, however, one of the Medici’s main vehicles for achieving power was falling apart: the bank. Now the story usually goes that Lorenzo was too busy with political affairs and patronage or was too inept with fiscal matters or both to properly manage the bank and during his lifetime it went into a stark decline. Lorenzo’s biographer Judith Hook puts it this way: “Lorenzo had neither the experience, nor the inclination, nor indeed the time.” That’s not wrong, but it’s not entirely true either. Raymond de Roover in his book Rise and Fall of the Medici Bank argued instead that the Medici Bank was sinking since around the end of Cosimo de’ Medici’s life. Part of the problem was circumstances even the best bankers could not navigate, but also the Medici were caught in a tragic irony. The bank had made them the unofficial leaders of Florence, but being the unofficial leaders of Florence was also slowly killing the bank.
For example, when Pigello Portinari, the manager of the bank branch in Milan, was reproached or being too generous with loans, he pointed out that it was practically impossible to turn away powerful courtiers at the Duke of Milan’s court without jeopardizing Florence’s precious alliance with Milan. This was definitely why the Duke of Milan himself felt he was under no obligation to pay off his debts to the Medici. Then there was the problem with the monarchs of England. England’s wool trade was essential for Florence’s cloth production. English kings also had the right to issue export licenses to merchants, so they could, if they so wished, cut Florentine businesses out of their wool trade altogether. So as bankers the Medici might have to pressure the king of England to pay his debts to them, but as the leaders of Florence they also had to keep the English wool coming to Florence so their most prosperous businesses wouldn’t go bankrupt and thousands of workers wouldn’t lose their jobs.
But while it is true the bank had some serious and potentially fatal problems, it was when Lorenzo was at the helm that it truly began to implode. And indeed the problem was that the need to focus on political affairs and patronage and the lack of other adult men in the family who could take over bank affairs caused Lorenzo to entrust the bank to a series of general managers outside the family and to give a great deal of independence to the individual bank managers, who had their own agendas and even rivalries with each other. For example, Tommaso Portinari, manager of the bank branch in Bruges, authorized massive loans to the Duke of Burgundy. According to Lorenzo, Tommaso did so “in order to court the Duke’s favor and make himself important, he did not care that it was at our expense.” Lorenzo accused Pigello Portinari of fudging the numbers on how well his branch of the bank was doing. One general manager Lorenzo trusted, Francesco Sassetti, took on the bizarre but very pro-capitalist policy of actually encouraging both branch managers and individual workers within the bank’s branches to compete with each other rather than working together. Lorenzo also gave a free hand to his mother’s uncle Giovanni Tornabuoni, who didn’t serve as a general manager but did not hesitate to interfere with bank procedures and countermand the branch managers’ orders whenever he felt like he needed to.
At the same time as the bank was being torn apart from the inside and making bad loans for political reasons, it was also experiencing pressures from the outside. One of the bank’s big celebrity clients had been King Edward IV of England. If the name sounds familiar, King Edward was one of the participants in the generations-long civil war between two rival branches of the English royal family called the War of the Roses (which, by the way, is also the title of a fantastic Danny DeVito movie, although that movie has nothing to do with the actual War of the Roses). Edward IV was eventually deposed in 1470 in favor of the main rival claimant, Henry VI, which left the Medici Bank holding the bag. Edward did return to power a year later, but having to pay through the nose to get his throne back, along with two ill-advised and expensive wars in France and Scotland, made Edward unable to pay off his debts to the Medici. The most he would do is lift all tariffs for Florentine merchants on the wool trade. This was far from enough, and by 1478 the Medici bank branch in London was shut down. The same year, the branch in Bruges was dissolved.
After the Medici bank withered, Florence was engulfed by a deep depression over the course of the 1480s and 1490s. Exactly what caused this depression is a matter of debate and speculation. But Roover does suggest that the Florentine economy was hit hard when Venice was drawn into a long and destructive war with the Ottoman Empire over Venice’s colonies in Greece. This war marked Venice’s own long and slow decline from the great economic powerhouse of Italy to become by the eighteenth century like Manaco, little more than a tourist destination for the rich. No wonder why, in 1481, Lorenzo wrote this in his tax report to the Signoria: “In making out this report, I shall not follow the same procedure as my father in 1469 because there is a great difference between that time and the present with the consequence that I have suffered many losses in several of my undertakings, as is well-known not only to Your Lordships but to the entire world.” Now the Medici bank actually would outlive Lorenzo…just not for long.
While the Medici did have various business investments and land holdings, even in this painful period the bank was still their main source of revenue. So, unfortunately, at the same time the bank was floundering, Lorenzo had to spend to maintain his growing patronage network and to get out of the crisis following the Pazzi conspiracy. We already mentioned how he exploited his position as the legal guardian of his young cousins, the sons of Pierfrancesco de’ Medici. When they reached adulthood, they demanded their money back and actually sued Lorenzo. Proving Lorenzo still wasn’t the absolute ruler of Florence, Pierfrancesco’s sons won their lawsuit. Lorenzo had to hand over Cafaggiolo and other ancestral estates in the Mugello Valley to his cousins in order to pay them off. One thing Lorenzo did get away with was embezzlement. Through cooking the books, Lorenzo took money from the Florentine government itself. He especially took liberally from the Monte di Pieta, the public fund meant to help pay for marriage dowries for poor Florentine women. As Lorenzo’s other biographer Miles Unger points out, this may very well have been the source of the money Lorenzo showered on Naples’ unmarried girls for their dowries, in order to win over the Neapolitans. Now I believe it’s clear Lorenzo resorted to embezzlement and fraud because he felt he had to, and frankly he did have some really good reasons. That said, it was still a bad look by both modern standards and the standards of his time, and whether or not Lorenzo did at least partially put himself into the situation through his own poor decisions with the bank.
We’ve spent a long time with Lorenzo the Magnificent, but it’s almost time to say goodbye. As we do so, though, we’re going to revisit Italy and take a look at the overall political situation on the peninsula and see why the real test of the Medici regime was yet to come…
The Medici Podcast 