Why is the city of Florence considered so important during the Renaissance? How did so many Italian merchants make so much money?

The city of Florence was so important during the Renaissance because it was a banking and financial center. Italian merchants made their money both through providing financial services and through cloth manufacture, but the city was chiefly renowned as a financial powerhouse, much as Wall Street is today.

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Florence was one of the primary cities in Italy during the Renaissance because of it prominence in banking and commerce, its leadership in the patronage of the arts, and its participation in the spread of humanism.

During the Middle Ages, Florence's currency, the florin, became one of the most stable and widely used currencies in all of Europe. Florence's bankers made good use of their florins, too. Led by the wealthy and powerful Medici family, they established a network of banks with branches that served not only Florence but also other Italian cities as well as major cities throughout Europe. Merchants and political leaders borrowed large sums of money from these Florentine bankers, who did not hesitate to charge interest. Interest means wealth, and wealth means more money to lend, and the cycle continued.

The influx of money into Florence allowed families like the Medici to sponsor artists and their work. In fact, Florence was home (at one point or another) to many of the greatest Renaissance artists, including Leonardo da Vinci, Donatello, Michelangelo, Botticelli, and Brunelleschi, who created some of their greatest masterpieces under the patronage of the Medici.

The Medici and other Florentine residents also widely supported the spread of Renaissance humanism. They built libraries and academies to provide places of learning, beautified the city through the endowment of churches and public buildings, and generally contributed to the spread of Renaissance culture. In so doing, they used their material wealth to increase the cultural, intellectual, and spiritual wealth of Florence and the world.

Last Updated by eNotes Editorial on February 1, 2021
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Florence was one of the main centers of the Renaissance largely due to the relatively large size of its population and its extraordinary wealth.

Florence was the cradle of capitalism, the center of the European banking industry. Firms and individuals from all over Europe borrowed huge sums of money from Florentine bankers, which could be used not just to start businesses, but to fund the raising and maintenance of armies.

For centuries, the most famous banking family in Florence were the Medici. They used their extraordinary wealth to establish a political dynasty that dominated not just Florentine politics, but the European political scene as well. Although the Medici are most famous for the bank that they established, they initially made their fortune from the lucrative textile trade, one of Florence's most important industries.

With the huge wealth they amassed from their various business interests, the Medici were able to become patrons of the arts and letters. Cosmo de Medici, the patriarch of the family, become renowned for his generous financial support of great Renaissance artists such as Donatello, Fra Filippo Lippi, and Fra Angelico.

In keeping with the spirit of learning and hunger for knowledge that characterized the Renaissance, Cosmo also used his phenomenal wealth to establish the first public library in Florence. In doing so, he preserved many ancient Greek and Roman manuscripts, the extensive study of which formed the basis of Renaissance humanism.

Last Updated by eNotes Editorial on February 1, 2021
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Florence was one of the largest, if not the largest, city in Europe in its heyday in the 1200s and 1300s, reaching as many as 100,000 people. While that seems small by today's standards, the world population was much less then, and Florence was known as a mega-city because of its size, wealth, and influence.

Banking and cloth manufacture were both important industries in the city that made merchants wealthy. However, the city is most renowned as a financial empire, with the Medici family at the forefront.

The Medicis did not invent double-entry booking, in which both profits and debts are tracked in the same place so that a company can quickly assess its bottom line and know what is bringing money and what is causing it to flow out again, but they made this innovation an essential component of their business model. This way, they were able to keep close track of their business operations and maximize their profitable endeavors, becoming very wealthy.

In addition to this, the Medicis pioneered letters of credit. While lending money at interest, called usury, was banned by the Church, letters of credit allowed the Medicis to skirt this ban. Most merchants didn't want to carry large amounts of cash across Europe, due to unstable conditions and fear of robbery. Instead, they would put the money to pay for goods in a Medici bank and carry a letter of credit that the seller could then cash like a check. The Medicis charged a fee for this service that merchants were very willing to pay for the convenience of the system.

Fortunately for us, the Medicis invested much of their wealth in the arts, allowing the new ideas of the Renaissance a place to flourish.

Last Updated by eNotes Editorial on February 1, 2021
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Florence was an important city during the Renaissance. The Renaissance first began there and was very strong in Florence. As the Renaissance spread throughout Europe, Florence became a model for other places to copy.

Florence was very prosperous during the Renaissance. There were many guilds that were very successful in Florence. The textile guild was very powerful. Florence became a very wealthy city because of the trade of textiles, especially the trade of wool. The workers took untreated and unfinished wool from other places and worked it into high quality wool that was sold in many places.

Florence was also an important banking center. Florence wasn’t a port city, so banking became an important industry. Florence’s bankers had influence throughout Europe.

Culture also flourished during this time in Florence. Its artists and writers became very well known.

As a result of these factors, Florence was an important city during the Renaissance.

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Florence was very important during the Renaissance because it was a major center of Renaissance culture.  For example, the three men who some say were the greatest writers of the era were from Florence.  These were Dante, Petrarch, and Boccaccio.  There were many churches with Renaissance religious art as well.

All of this was possible because of Florence's dominance of the wool trade.  Wool from the area around Florence was sold all over Europe and even over to the Middle East.  This brought a lot of money to Florence, which allowed rich people to support artists who made Florence important.

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