Fixing Florence’s Economy after the Florentine-Neapolitan War


By William LandonNorthern Kentucky University

After he had negotiated an end to the Florentine-Neapolitan war, Lorenzo the Magnificent traveled back to Florence. When he produced the peace treaty with Naples that he had personally organized, there was rejoicing, but then the sobering recognition that Florence’s economy was teetering at the edge of a precipice. The 31-year-old Lorenzo was forced to manage yet another crisis.

A Medieval battle scene
Lorenzo was forced to manage yet another crisis just after he had negotiated an end to the Florentine-Neapolitan war. (Image: Zef art/Shutterstock)

Favoring the Elite

Together with Florence’s aristocracy, who continued to support him, Lorenzo began a program of constitutional reform. This reform was designed to maintain the appearance of the city’s traditional republican form of government, but in reality, it concentrated the power of an ever-shrinking circle of wealthy citizens.

But, because the government did actually manage to remove the tax burden on the common people incurred by the war with Naples and Rome, the city was able to exhale a sigh of relief. At least briefly.

The way the tax burden was handled exposes, however, the naked, self-aggrandizing ambition of the Florentine elite, which looked to Lorenzo as its guide. The Florentine monte comune, the government’s public treasury, began offering what we might recognize as bonds. The Monte had moved from requiring or forcing citizens to loan it money, to a more speculative policy.

Portrait of Lorenzo the Magnificent
Lorenzo took part in the financial conspiracy that manipulated public funds as well as other elites. (Image: Giorgio Vasari/Public domain)

The bonds it offered were purchased by the city’s wealthy citizens, and they were rewarded for their support of the public treasury with high rates of interest.

The Brief Period of Harmony

Such chicanery, however unethical, was also necessary. The common Florentines had been taxed into a stupor. When they were freed from such crushing excesses, the city’s economy rebounded after having gone into a deep recession during the wars following the Pazzi conspiracy. The elites shouldered the city’s fiscal burdens—and they profited from it. 

Moreover, after Lorenzo had single-handedly brought the wars to an end, his ex-communication was lifted, as was the papal interdict against Florence; it seemed that Florence might, at long last, experience a respite and perhaps a period of peace. The only missing piece in this puzzle is the Medici alum mines. Lorenzo was unable to regain control of them.

In the aftermath of the Pazzi conspiracy, they had been seized and never freed from papal control. However, this latter point was of no real consequence to Medici wealth, as Turkish alum, which was far cheaper, had flooded the Italian market. Florence and the Medici grew richer as a result.

This article comes directly from content in the video series How the Medici Shaped the RenaissanceWatch it now, on Wondrium.

Venice’s Empire-building Ambitions

This fleeting moment of harmony was shattered. In the early 1480s, Venice turned its sights from the sea to the land. Desiring to build an empire on terra firma, the Venetians attacked Ferrara. The move sent shockwaves through the peninsula.

Ferrara was a small, but culturally important city—in large part due to the patronage and leadership of Duke Ercole d’Este—who was Lord of Ferrara. Its geographical location was also important. Ferrara is located about halfway between the Venetian lagoon and the city of Bologna. If Ferrara fell to the Venetians, Bologna would almost certainly be next.

And what made matters worse was that the Venetians had been in negotiations with the French. The Venetian government hoped to incite the French to invade Italy and then take Naples. That Venice would dare to invite a foreign power into Italian peninsular affairs brought Florentine, Neapolitan, and Milanese interests together. 

The papacy, still under the leadership of Sixtus IV, was allied with Venice. To that end, he had authorized his nephew Girolamo Riario to raise an army that would assist in the Venetian cause.

Forming the Most Holy League

In 1482, the Florentines sent their own expeditionary force eastward across the Apennines, where they routed the papal army and even took the strategically important Città di Castello, crushing the pope’s desire for territorial expansion. He withdrew from the Venetian alliance.

Colored woodcut town view of Florence
After managing Venice’s military campaign, Lorenzo became the central force behind the pursuit of the balance of power in Italy. (Image: Bas van Hout/Public domain)

The pope believed that, without his continued support, Venice would halt its campaign against Ferrara. They didn’t. In response to Venice’s perceived betrayal, Sixtus sided with Florence, Naples, and Milan, in what became known as “The Most Holy League” to destroy the Venetians.

But, before Italy slipped into all-out war, word that the Venetians had been courting the French crown became widely known. Yet again, Lorenzo personally stepped into the fray. If France attempted to take Naples, the Aragonese would have no choice but to respond with an invading force of their own to defend Naples. 

Lorenzo brought this real threat into sharp focus. He was able to convince the members of the League and Venice to cease hostilities—narrowly avoiding a disaster. In the wake of the Pazzi conspiracy, Lorenzo had saved Florence. This time, he had yanked the peninsula from the gnashing maw of international war. He became the central force behind the pursuit of the balance of power in Italy.

Common Questions about Florence’s Economy after the Florentine-Neapolitan War

Q: How was the tax burden dealt with after Florence signed a peace treaty with Naples?

The Florentine government’s public treasury offered what could be called bonds. The wealthy citizens would buy such bonds and in exchange be rewarded with high levels of interest. It was a financial conspiracy that was required to keep Florence’s economy afloat.

Q: How did other parties react after Venice attacked Ferrara?

It was obvious that if Ferrara fell, Bologna would be next. Since the Venetians had talked to the French and got them involved, the Florentine, Milanese, and Neapolitan forces now all had interests in common. The papacy allied with the Venetians in hopes of expanding its territory.

Q: How was “The Most Holy League” formed?

The Venetian attack on Ferrara suspended the peace in which Florence’s economy was starting to bounce back from its previous war and started another war. After Venice continued with its military campaign even though the pope had withdrawn support, the pope sided with Florence, Naples, and Milan to destroy the Venetians since he perceived this as a betrayal. This alliance was known as “The Most Holy League”.

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