The economic history of pre-unitarian Italy traces the economic and social changes of the Italian territory from the Roman era to the unification of Italy (1860).
In the Roman era, the Italian peninsula had a higher population density and economic prosperity than the rest of Europe and the Mediterranean basin, especially during the 1st and 2nd centuries. Beginning in the 3rd century CE, the Roman Empire began to decline, and so did the Italian territory and its cities.
During the early Middle Ages (7th-9th centuries), the economy was in a depressed, semi-subsistence state, gravitating around feudal centers. Beginning in the 10th century, the Italian population and economy began to grow again, along with urban centers. Extensive trade networks developed over time, linking Italian centers to a network of relations from Asia to northern Europe. These centers of manufacturing, financial, mercantile and cultural activities made the Italian economy more prosperous than other European countries.
The arrival of the Black Death in the mid-1300s decimated the population, but it was soon followed by an economic revival. This growth produced a prosperous Renaissance economy that was advanced compared to European countries. Italy's leading sectors were textiles (woollen and silk workmanship, widely exported), banking services, and maritime transport.
During the 1600s, the economic system weakened and enterprises linked to the major urban centers declined. Holland, England and France assumed a prominent economic role in Europe, and Italy lost its dominant position in textile exports, financial intermediation and shipping. Stagnation initiated a shattering of economic relations in the Italian area.
Between the eighteenth and mid-nineteenth centuries, Italy remained divided into small states, many of them under foreign domination: this context did not favor the economic and commercial growth and competitiveness of the Italian area. However, some Italian states initiated major economic reforms that would have long-term implications. Clear socio-economic differences between the north and south began to emerge.
Roman era
Rise (3rd centuries BC-II AD) Historians and economists have tried to reconstruct a view of the economy of the Roman centuries and its changes according to contemporary interpretations of economics; some have also undertaken quantitative studies. The studies have not produced precise results that are generally agreed upon. However, some general notions about the economy of Roman times have become fairly accepted.
The Italian peninsula had a higher population density and economic prosperity than the rest of Europe and the Mediterranean basin. This is especially true for the 1st and 2nd centuries, which represented a period of relative political stability and peak economic conditions. Demographic estimates of Italy's population in Roman times vary. The most accepted attest it at 7 to 8 million. Some scholars estimate it as high as 15-16 million: this estimate would represent a level that would later be reached again only by the 18th century.
Imperial economic power centralized toward Italy the flow of economic resources from the provinces. Relative economic prosperity was also supported by advanced political and administrative institutions (including the legal system); technological (especially in construction) and scientific expertise; and general cultural progress, especially in the numerous cities.
Quantitative assessments of the Roman economy available today are considered speculative. However, beyond absolute figures, they suggest significantly greater wealth in the peninsula than in other regions of southern Europe and the Mediterranean basin. Above all, estimates assume that, during the three centuries preceding the Augustan age, there was growth in average per capita income: to observe another such occurrence, one must wait until the onset of the Industrial Age.
Decline (centuries III-VI AD)
Beginning in the third century AD, the Roman empire began to decline. Historians have proposed hundreds of theories about its causes (political, economic, demographic, social, cultural, environmental): it is likely that many factors contributed to it. One objective fact was the demographic decline that hit the peninsula, which some historians link to two pandemics (2nd and 3rd centuries).
At the end of the 3rd century, the administration of Emperor Diocletian introduced a major tax reform: for the first time the Italian population was taxed (previously it had been exempt). Taxation particularly affected the less populous areas of the Empire and contributed to further population decline in western regions, including Italy. In order to ensure fiscal stability in the face of demographic and economic decline, the empire prevented peasants from moving, and bound them to the land by establishing the colonate; limits on movement were also imposed on those belonging to some urban professions, and in general craft and professional activities were rigidly framed in collegia, closely supervised by state authority.. The move of the imperial capital to Constantinople in 330 CE moved the political and social center away from Italy and contributed to its further decline. The invasions of the Goths and Vandals (5th century) and Justinian's long war of reconquest (6th century) accelerated the peninsula's sharp demographic decline.
Along with demographic, political and economic changes, the Italian territory also saw a decline in the urban realities whose cultural richness had sustained its most prosperous age. The imperial administration extracted resources for the benefit of itself, large landowners and, increasingly, the clergy, while suppressing the social vitality of the Italian territory, now peripheral to the Empire. Culture also began to change, moving away from the values of previous eras.
Despite the decline of urban centers, the centrality of the city in Italy held out longer than the countryside, from which the profits of the landed aristocracy came. This situation did not change under the reign of Odoacer or even under Ostrogothic rule. With Theodoric, whose policies continued to rely on the urban landowning class, a modest recovery occurred; in fact, however, the economy was based on the same dynamics in place in the late empire..
Middle Ages
Early Middle Ages (7th-9th centuries)
In the early Middle Ages, cities were largely depopulated and the countryside became impoverished. However, unlike in continental Europe, numerous small towns in Italy remained in existence stemming from the urbanization of the Roman period that were the basis for the recovery after the year 1000. The economy was depressed and revolved around centers of feudal estates, such as abbeys and castles. The rural economy rested on semi-subsistence agricultural production, while trade was limited and relied on annual fairs..
Byzantine and Lombard period When the Lombards arrived in Italy, they found an economy exhausted by tax burdens and dominated by latifundia, still hinging on the role of cities whose socio-political structures, however, were in decline..
In the Lombard Kingdom the political and institutional structures of Roman inheritance dissolved completely; the ancient landed aristocracy in time was ousted by the new invaders, who acquired the large estates, completely redefining the situation of the countryside. With the Lombards, in fact, forests and uncultivated lands acquired great importance: the exploitation of forests guaranteed resources such as timber and wild fruits, as well as being used for the wild breeding of pigs and sheep.. However, toward the end of the Lombard era there was an economic shift, with the proliferation of mints under Liutprand and the attestation of a rather dynamic merchant class..
The context of political fragmentation in which southern Italy found itself, more so than northern Italy, accentuated the dissolution of the urban fabric, especially for cities located inland. Despite this, there were no major economic differences between Langobardia Minor and the residual areas ruled by the Byzantines, who particularly maintained control of the coastal territories. In the Byzantine area, too, the landowning class was replaced, but in this case by ecclesiastical bodies..
Political relations with Byzantium nevertheless allowed some coastal cities in peninsular Italy (such as Venice, Comacchio, Bari, Gaeta, Amalfi, Naples and Salerno) to retain a certain commercial vitality, while Sardinia and Corsica found themselves excluded and forced into a subsistence economy. In contrast, Sicily enjoyed relative prosperity between the 6th and 8th centuries, a development that continued and increased with the subsequent Arab conquest..
Carolingian period The arrival of the Franks in the second half of the 8th century introduced the manorial system in the management of land holdings, leading to the establishment of the feudal system in Italy as well. The curtes, or farms, were set up on an autarkic economy, tending solely to meet the owner's needs for both food and handicrafts. This was because agrarian investment and increased land productivity were seen as unattractive, due to the market's limited capacity to market agricultural goods..
Despite the depression of local markets, trade continued: first of all, luxury goods were still imported from the East; moreover, during the 9th century fairs spread to many Italian cities. This progress in trade activities occurred mainly in the cities located along the Po River, stimulating in part the exchange of local products and thus causing a modest strain on agricultural and artisan production..
These phenomena, which caused openings in the closed circuits of the feudal economy, had to be measured against the unstable climate of the time. What disturbed these attempts at economic dynamism were the incursions of the Hungarians and various Slavic peoples, which followed one another frequently since 899, and the threat of the Saracens particularly in the Tyrrhenian Sea. However, Islamic expansion also led on the other hand to an increase in trade, which Venice was especially able to take advantage of..
Late Middle Ages (10th-15th centuries)
Beginning in the 10th century, Italy's population and economy began to grow again. A number of technological innovations improved agricultural productivity: the three-year crop rotation and improved plowing through the adoption of the heavy wheel plow and a greater use of horses rather than cattle. Industrial use of the water mill in textile, metal, and other manufactures also became widespread.
At the beginning of the late Middle Ages, the most prosperous region in Italy was Sicily. During the period of Islamic rule Palermo became the second largest city in Europe after Cordoba (its population has been estimated between 120,000-350,000).
According to many scholars, the Italian population doubled between the 10th and 14th centuries (similar to other European countries). It has been estimated that in 1300, 21% of the Italian population (estimated at around 13 million) lived in cities: the rate of urbanization was similar in Spain, but much lower in France, Germany and the U.K. At the beginning of the 14th century, Milan, Venice and Florence had more than 100,000 inhabitants; there were 43 cities with at least 15,000 inhabitants..