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If people thought the last Great Depression was the worst humanity has ever seen, readers had better wake up and open their eyes. Indeed, most of humanity has forgotten the worst depression on record 650 years ago when the Black Death, or Bubonic Plague was spreading like wildfire along with wars. In an eerily reminiscent circumstance, it seems humanity is headed toward this same path with the current worldwide depression and swine flu (h1n1) pandemic. A little known fact.
How Venice Rigged the First, And Worst,
Global Financial Collapse
by Paul Gallagher
Six hundred and fifty years ago came the climax of the worst financial collapse in history to date. The 1930’s Great Depression was a mild and brief episode, compared to the bank crash of the 1340’s, which decimated the human population.
The crash, which peaked in A.C.E. 1345 when the world’s biggest banks went under, “led” by the Bardi and Peruzzi companies of Florence, Italy, was more than a bank crash—it was a financial disintegration. Like the disaster which looms now, projected in Lyndon LaRouche’s “Ninth Economic Forecast” of July 1994, that one was a blowup of all major banks and markets in Europe, in which, chroniclers reported, “all credit vanished together,” most trade and exchange stopped, and a catastrophic drop of the world’s population by famine and disease loomed.
A “free trade” mythology has been developed by historians about these “sober, industrious, Christian bankers” of Italy in the Fourteenth century—“doing good” by their own private greed; developing trade and the beginnings of capitalist industry by seeking monopolies for their family banks; somehow existing in peace with other merchants; and expiating their greedy sins by donations to the Church. But, goes the myth, these sober bankers were led astray by kings (accursed governments!) who were spendthrift, warlike, and unreliable in paying debts which they had forced the helpless or momentarily foolish bankers to lend them.
The Real Story
Two recent books help to overturn this cover story, although perhaps that is beyond the intention of their authors. Edwin Hunt’s 1994 book The Medieval Supercompanies: A Study of the Peruzzi Company of Florence,* establishes that this great bank was losing money and effectively going bankrupt throughout the late 1330’s, as a result of its own destructive policies—in Europe’s agricultural credit and trade in particular—before it ever dealt with Edward III. “Indeed, the great banking companies were able to survive past 1340 only because news of their deteriorated position had not yet circulated.” Just as in 1995.
This triumph of “free trade” over the potential for national government, rigged the Fourteenth century’s global human catastrophes, the worst onslaught of death and depopulation in history. It was not until the Renaissance created the French nation-state under Louis XI, one hundred years later, and then England under Henry VII, and Spain under Ferdinand and Isabel, that the human population would begin to recover.
Population: The Fundamental Measure
The clearest measure of the destruction wrought by the merchants and bankers of Venice and its “allies” in the financial crash of the Fourteenth century, is shown in Figure 1. What had been 400-600 years of increasing population growth in Europe, China, and India (altogether, three-fourths of the human population), was reversed.
A Cancer on Production
In the Eleventh, Twelfth, and into the Thirteenth centuries the growth and development of population both in Europe and particularly in China, was accelerating. China’s population doubled in two hundred years during the Neo-Confucian Renaissance of the S’ung Dynasty, to 120 million; meanwhile, the population density of northern France and northern Italy began to approximate the levels these regions have today.
Read the rest of the article at The Schiller Insitute.
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