Byzantine economy

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The Byzantine economy was among the most robust economies in the Mediterranean for many centuries.

One of the economic foundations of the empire was trade. The state strictly controlled both the internal and the international trade, and retained the monopoly of issuing

From 4th to end of 6th century the eastern part of Roman Empire had demographic, economic and agricultural expansion. The climate was opportune for farming. Even in marginal regions rural settlements flourished.^[1]

Development in the

From the 7th to the 12th century, the social organization of production was arranged round two poles: estate and village (a collection of free smallholders). The village social structure was the organizational form best adapted to insecure conditions, with the estate fulfilling this role once conditions were safe again. There was in principle a clear distinction between tenants who lived on the estates (and owed dues to the master of the place), and the village inhabitants, many of whom owned land, and consequently paid taxes to the state. Nevertheless, not all the cultivators on the estate lived there, and not all enjoyed a special status. Some of them were slaves and some were wage laborers; references to wage laborers occur continuously from the 7th century to the end of the Byzantine period.[4] In the same way, the inhabitants of a village would not all be landholders, and of these, not all would be farmers; some village proprietors held the lowest rank of aristocrat status, and were wealthier than tenant farmers.^[5] The distinction between landholder and tenant farmer (paroikos) was weakened once tenures held by paroikoi were considered hereditary, and once some paroikoi achieved owner status.^[6] From the 10th century on, large estates assumed the leading role that had been held until then by villages, albeit in an economy that was henceforth orientated toward demand, with monetary exchanges taking a larger share.^[7] By the beginning of the 14th century, the Macedonian countryside was made up of an almost unbroken network of estates that had replaced the former network of communes. Villages that are known to have possessed commune status in the 10th century became estates of the fisc, after which they might be ceded to a monastery or lay person.^[8]

The population was dense in the 6th century, but it diminished in the 7th and 8th centuries. Epidemics (such as the plague of 541/542 and its recurrences until 747) seem to have had greater effects on population volume than wars. From the 9th century on, the population of the empire increased, but it was unevenly distributed.^[9] A growing population would imply an increase in the area under cultivation. The automatic effect of a larger population was also amplified by the demand from a growing number of people who did not produce much or at all. Indeed, it is estimated that areas under cultivation must have almost doubled, and that the extension of crops might have affected a shift in the location of grazing lands, and pushed back the woodlands.^[10]

The 12th century saw the development of

The conquest of the empire by the Crusaders in 1204, and the subsequent division of the Byzantine territories affected the agrarian economy as it did other aspects of economic organization, and economic life. These territories split among small Greek and Latin states, lost much of the cohesion they may have had: the Byzantine state could not function as a unifying force, and, in the 13th century, there was very little to replace it.[12] The 13th century is the last period, during which one may speak of significant land clearance, that is, the act of bringing previously uncultivated land into cultivation. But the progressive impoverishment of the peasantry, entailed the decline of a certain aggregate demand, and resulted in a concentration of resources in the hands of large landowners, who must have had considerable surpluses.^[13]

The demographic expansion came to an end in the course of the 14th century, during which a deterioration of the status of paroikoi, an erosion of the economic function of village by the role of the large estates, and a precipitous demographic decline in

Around 850, the land and head taxes yielded an estimated 2,900,000 nomismata annually for the empire. Commerce during this period increased dramatically, therefore contributing 400,000 nomismata annually. The expenditures of the period were large, but manageable by the treasury. Approximately 1,400,000 nomismata went to the payroll of the army annually while other military costs took another 800,000 nomismata annually. Supporting the Byzantine bureaucracy needed 500,000 nomismata. Also, imperial largess cost the treasury 100,000 nomismata every year. All of these expenses meant that the Byzantine government had about 500,000 nomismata in surplus revenue each year, much more than in the 8th century.[23]

Unfortunately under their son Michael III the reserves dwindled to about 100,000 nomismata.^[26] However, under Basil I's prudent economic policies, the state quickly raised 4,300,000 nomismata, far more even than the empire's annual revenue of 3,300,000 nomismata.^[18]

From the 10th century, however, until the end of the twelfth, the Byzantine Empire projected an image of wealth and luxury. Constantine V's reforms (c. 765) marked the beginning of a revival that continued until 1204.^[27] The travelers who visited its capital were impressed by the wealth accumulated in Constantinople; riches that also served the state's diplomatic purposes as a means of propaganda, and a way to impress foreigners as well its own citizens. When Liutprand of Cremona was sent as an ambassador to the Byzantine capital in the 940s, he was overwhelmed by the imperial residence, the luxurious meals, and acrobatic entertainment.^[28]

By the time the Palaiologoi took power, Italian merchants had come to dominate the trade by sea whilst Turkic incursions prevented any success from trade across roads. Michael VIII Palaiologos strove to restore the capital's greatness, but the resources of the empire were inadequate. In 1282, Michael VIII was forced to drain the treasury to pay the enormous bribe of 60,000 hyperpyra to King Peter III of Aragon to invade the Kingdom of Sicily.^[47] Constantinople became once more, as in the seventh and eighth centuries, a ruralized network of scattered nuclei; in the final decades before the fall, the population numbered 70,000 people.^[48] Gradually, the state also lost its influence on the modalities of trade and the price mechanisms, and its control over the outflow of precious metals and, according to some scholars, even over the minting of coins.^[49] By 1303, the empire's annual revenue dropped to less than 1,800,000 hyperpyra, under Andronikos II Palaiologos. In 1321, only with extreme effort was Andonikos II able to raise revenues to 1,000,000 hyperpyra.^[50]

The Byzantine economy had declined so much that by 1343, Empress

Coinage was the basic form of money in Byzantium, although credit existed: archival documents indicate that both banking and bankers were not as primitive as has sometimes been implied.

The first features of the administrative organization of monetary production were first established by Diocletian and Constantine, and were still in existence at the beginning of the 7th century.^[66] During Byzantine history, supervision of the mints^[67] belonged to the Emperor; thus the government controlled, to a certain degree, the money supply. Nevertheless, the Emperor and his government were not always capable of conducting a monetary policy in the modern meaning of the term.^[68]

Ever since the creation of the Byzantine monetary system by Constantine in 312, its pivot had been golden