Powers and Thrones: A New History of the Middle Ages

by Dan Jones

financial instruments are small potatoes indeed to us today—but in the Middle Ages they were truly revolutionary. They were a safe way to move credit over long distances, and could be secured against fraud with seals and code words. They allowed Christian merchants to get around the Roman Church’s strict prohibition on usury—for when money was changed between currencies, exchange rates could be manipulated artificially in the lender’s favor, effectively allowing profit to be baked into the trade without officially defining this as interest. Better yet, bills of exchange could also be traded and circulated—sold at a discount to third parties who could go on to cash them themselves. This allowed for flexible, adventurous deals to be struck across long distances. Groups of merchants could act as truly international entities, with sprawling webs of commercial activity but scant need for international travel, save to transport stock. The merchant who availed himself of the fourteenth century’s financial innovations was free as never before to become “sedentary”—based in a single city but