In just about everything it did, Venice contradicted the current model that ascribes to unregulated private markets’ unique efficiencies.

"Where trade was concerned, the state left nothing to chance; and by 1470 it was taking over more and more of Venetian economic life. The days of private enterprise on the grand scale were almost gone. All the merchant galleys were built in the Arsenal and were state-owned; the Republic kept the monopoly on many of the most profitable routes and cargoes. Even the ships that remained in private hands were obliged to conform to the strict specifications laid down by the Senate. The advantages were obvious. Given such conformity, all the vessels in a given convoy could be trusted to behave similarly in bad weather and so, with luck, to stay together; the convoy’s speed, and consequently its arrival dates, could be more accurately estimated; standardized spares could be kept available in agencies and outposts overseas and quick convertibility to warships guaranteed in an emergency. By the end of the fourteenth century there were normally six of these trading convoys a year, each consisting of up to 500 ships – and each bound for a different destination, but each sailing on appointed dates, and following specified routes, fixed months ahead. Most would be state-owned, their command – which was open to the nobility only – leased by auction to the highest bidder for the duration of the voyage; but every merchant and captain involved, whether owner or lessor, was bound by oath to obey the instructions issued by the Senate and to uphold ‘the honour of St. Mark.’

"As always, increased public ownership led to increased taxation. A hundred years before, Venetian taxes had been among the lowest in Europe. No longer. Not only were there the soaring costs of the Arsenal and its 16,000 workers to be met; but the spread of state control had spawned an army of eagle-eyed tax collectors famous for their niggling accuracy – all of whom had to be paid by the Republic. Small traders continued to be encouraged; if they could not afford, or spare, ships of their own for their ventures they always enjoyed the right – so long as they were Venetians – to demand cargo space on the state-owned convoys at fixed and reasonable rates.

"The most important branches of industry were rigidly protected, with bans on the export of certain raw materials; skilled artificers were forbidden to leave the city, while to reveal the secrets of key manufacturing processes was an offence punishable by death. (Foreign craftsmen, on the other hand, such as German makers of looking glasses and the silk workers from Lucca were encouraged to settle in Venice and even, as a special inducement, exempted from taxation for the first two years of residence.)"

Pioneers in Public Health

"Public health was early accepted as a state responsibility, and to the Venetian Republic must go the honour of having founded the first national health service in Europe, if not in the world. After the establishment of the state-run School of Medicine in 1368, licensed medical practitioners were required to attend monthly meetings to exchange notes on new cases and treatments.

"Alone of all the states of Catholic Europe, [Venice] never burned a heretic. Alone she maintained that moderate, humanist outlook which had sprung from the Renaissance and which must have seemed oddly out of place in the world of the Counter-Reformation. She allowed the Greek Orthodox community a church of their own, the Jews their synagogues in the Ghetto, the Muslims their mosque in the Fondaco dei Turchi, the Armenians their monastery on the island of San Lazaro. That made her a centre both for enlightened liberal thought and – through her printing houses – for its dissemination. That gave her university at Padua (there was none within the lagoon) a prestige unrivalled in Europe." 1

The end to her period of glory came when her very successes involved her in the politics of mainland Italy. Her paramount strength lay in the sea, but to fight wars on the mainland she became dependent on hiring mercenaries and their paymasters – the condottieri who were the curse of Renaissance Italy. Even more serious, the Portuguese discovering the sea route to Indian and Eastern Asia around the Cape of Good Hope, shattered Venice’s monopolist access to the land caravans from India and China. Central and Northern Europe were no long dependent of getting their imports from Asia by the land routes across the Alps through Venetian-controlled territory.

However, the echo of its glory perdured. Though plundered by Napoleon (who put an end to its 1,000-year independence), and generations of British collectors, it remains in the opinion of many the most beautiful city in existence. It taught Europe manners and the art of living. "Like most intelligent young men of the age (circa 1730), Horace Walpole learned more from his Grand Tour than at university (Cambridge)."2 And the climax of the obligatory Grand Tour was, of course, Venice "where every rich British visitor longed for at least one picture of the city to remind him of one of the most remarkable experiences of his lifetime. Virtually all Antonio Canaletto’s best work is in England – Venice possesses scarcely a single canvas." Giovanni Gabrieli and Claudio Monteverdi had been organists at St. Mark’s, and it is only since World War II that the world came to appreciate that Antonio Vivaldi, dismissed as a rather minor composer by British musicologists, was in fact considered by Bach and other pinnacles of German music as their peer. Titian, Tintoretto and Veronese adorned the city with their genius. Its wedding of sea and land, of the Byzantine and the Renaissance have no equal elsewhere.

And to economists of the West intent on constantly ever-sputtering growth, it is a reminder that much of society’s survival-craft has to do with nurturing the legacy of the past.

1. Norwich, John Julius (1983). A History of Venice. Harmondsworth, England: Penguin Books, pp. 282, 283, 284.

2. Hobson, Dominic (1999). The National Wealth. London: Harper Collins Publishers, p. 179.

— from Economic Reform, May 2003