From at Mary Tao at the New York Fed Research Library (hat tip Bob Wenzel)
What do the Italian Renaissance and the Great Depression have in common? Commissioned works of art, Italian Renaissance methods of fresco painting, and themes of banking and money.
During the fourteenth through the sixteenth centuries, many Florentine bankers hired artists to produce devotional paintings and then donated those pieces to the Catholic Church to offset the Church’s disapproval of interest-bearing loans. Since usury was very much frowned upon, this practice of buying penance did not sit well with one Friar Girolamo Savonarola. He was such a vocal critic of the donations that he arranged for bonfires of “vain, lascivious, or dishonest things” (including many Renaissance artworks) in 1497 and 1498. The Medici Bank, the largest bank at that time, had much success in evading the ban on usury; its collapse in 1494 gave Savonarola leverage in his cause. The recent Florentine exhibit Money and Beauty. Bankers, Botticelli and the Bonfire of the Vanities depicts “how the modern banking system developed in parallel alongside the most important artistic flowering in the history of the Western world.”
Buying penance is as relevant today as it has been during the Renaissance. Many wealthy citizens indulge in huge donations to their respective churches or lavish on pilgrims in the hope of acquiring spiritual salvation.
While the activities of Italian bankers in the renaissance may not be about salvation, it had been about political influence peddling. It could also be seen as the natural impulse to arbitrage politics.
Of course flourishing of trade has been a critical factor in the “artistic flowering” or the “rebirth of learning” in the history of the Western world.
To quote the late Professor Sudha Shenoy,
It was the Muslims who saved the Latin and Greek texts during the European dark ages. This led to the Renaissance in due course. The Italian merchants learned their business methods from Islam. There is a commercial history, and a history of tolerance, that needs to be recaptured.
