How the Renaissance Paved the Way for Modern Finance

The Renaissance is largely remembered for the larger-than-life personalities such as Michelangelo and Leonardo da Vinci who defined it, as well as for their immortal works in painting, sculpture, architecture, which stand as monuments to man’s innate creative forces.  However, the Renaissance was equally as important, if not more so, to modern ideas of education, science, and finance.  During the Renaissance, modern ideas such as growth-oriented tax policy, data-based commercial and fiscal policy, and the welfare state all took seed, and laid the foundation for modern society.

In his magisterial The Civilization of the Renaissance in ItalyJacob Burkhardt addresses these topics and more.  Though it is dated (it was published in 1860), Burkhardt’s work is still largely unsurpassed in its scope and depth.  Below are a few of his observations regarding the Renaissance’s impact on modern society and financial systems:

Regarding indirect taxation and increasing government revenues by promoting growth:


Regarding the rise of merit-based advancement over hereditary preferences:


Regarding the idea of the omnipotent State as the solver of all problems, and the curer of all ills:


Regarding the advent of statistics-based policy and commerce:


Regarding the rise of the professional society, or bourgeoisie:

“In 1478 we have again a most important and and in its way complete view of the commerce and trades of this city [Florence], some of which may be wholly or partly reckoned among the fine arts such as those which had to do with damasks and gold or silvery embroidery, with woodcarving and ‘intarsia,’…The inborn talent of the Florentines for the systematization of outward life is shown by their books on agriculture, business, and domestic economy…”

Regarding the identification of education as a necessity in modern life:

“The Florentine merchant and statesman was often learned in both the classical languages…even the daughters of the house were highly educated.  It is in these circles that private education was first treated seriously.”

It is fair to say, contrary to the misconceptions of many, that modern life is a bit older than we’d like to think.  As Burkhardt wrote, the men of the Renaissance, spurred by the regenerative powers of conflict and struggle, embraced anew the idea of the individual and his capabilities, and whether through commerce, science, or art, pursued knowledge and understanding in a way hitherto unimaginable to their predecessors.  Technological advancement, necessary in order to assure the survival of their respective city-states, helped to unleash their energies, and set the stage for modern Western life.