Decline of Venice's Economy

There were many factors that caused the decline in Venice’s economy and industry - Decline of Venice's Economy introduction. During the sixteenth century Italy was one of the most powerful and technologically advanced countries in the world, but during the seventeenth century other countries were becoming equally or more advanced than Italy. England, France, and Holland had started producing materials for a cheaper amount of money because of the new technology they were using to manufacture their goods.

Since England, France, and Holland could make their materials for less money it meant that they could sell their materials for less money and still make a profit, whereas Venice stayed with the same manufacturing style and could not afford to cut their costs. Part of the decline in the economy was there was also a drop in productivity because of the aging factor of the labour force after 1650 and faulty government policies. Venice had run out of lumber for building ships and was forced to buy foreign ships.

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Venice’s hold on international trading was no longer as prevalent as it used to be because of the increase in production from other countries. Venice also never changed the wages for their employees, even though they were not making as much money as they had been during the sixteenth century. The plague in 1630-31 in Venice had an impact on production because of the loss of people. The biggest reason Venice’s economy and industry was declining was their lack of ability to change their style of manufacturing and trading.

Venice’s lack of ability to change their way of transportation and manufacturing helped England and Holland become the new trading powers in the Mediterranean. Venice had run out of lumber to build their ships and was forced to buy foreign-built ships. The reason this had an impact on trading was because they no longer were building their own ships and therefore they did not have as many skilled ship builders. If Venice had more skilled ship builders they would have been able to build ships that were more stable and faster, which would have helped them get their goods to their trading partners faster.

Venice’s ship operators were not as skilled as Holland’s or England’s. Many of the people that were trading with Venice had stopped because they could no longer trust their ships or their crews. “A combination of factors—old-fashioned designs for over-large ships, expensive construction due to the shortage of timbers, unskilled or halfhearted crews, inefficient operation, and too few guns—all these made shipping a vulnerable sector of the Venetian economy even during the boom years of the sixteenth century. England and the Dutch had found better and quicker ways to travel for their trade routes; they no longer had to pass near Venice, which meant that fewer ships were coming into port. Venice was losing bidding wars to other countries as well because their way of manufacturing was more expensive than the other prominent countries and were therefore, always undercut by England, Holland, and France. “The French, English, and Dutch outbid the Venetians in the Ottoman empire and became masters of its supplies of silk and cotton.

Even Germany no longer looked to Venice for these wares but obtained them from the western nations through Frankfurt. ” Venice was losing their customers, which meant there was less demand for their goods, and because there was less demand for their goods they did not need as many people working in their factories. If Venice would have found a way to decrease their cost in making their materials they would have been way better off. The cost of Venice’s goods was much higher than what England and Holland were offering.

The reason that England and Holland had lower prices on their goods was that they had better technology in manufacturing. England and Holland could produce more product in less time for less money than Venice could because they had better technology in the manufacturing industry. The cities of London and Amsterdam were cutting costs of their products, whereas Venice could not, and Venice started losing work and could not afford to pay their employees. London and Amsterdam had cut costs on Venice’s most significant exports, which were cloth, silk, and wool. Venice’s failure to respond effectively to the commercial challenges posed by London and Amsterdam was shared by Milan, Genoa, and Florence, while Braudel has emphasized that the adversities of the Italian peninsula were shared by communities thought the Mediterranean region. ” Now Venice had competition from London and Amsterdam, but also from cities in its own country. Venice was losing the bidding wars, which meant that Venice was losing customers and money. Due to the lack of demand from other trading countries, Venice started losing money and could no longer afford some of their employees in the manufactures.

Venice could not compete with England and Holland’s ability to produce cheaper products and employ their workers for a lower cost as well. This was a huge change considering they were an economic powerhouse during the sixteenth century. Venice also lost some employment due to the plague. During the seventeenth century Venice had come in contact with the plague. They had lost around one third of their population. Before the plague hit Venice they had a population of 158,000 people. After the plague went through their population went down to 102,000 people.

There was now a lack of population in Venice, which meant that there were more jobs open and many of the people who were working at the manufacturing companies had died. The manufacturing companies were looking for more workers because they had also lost many of their skilled workers from the plague. The lack of skilled workers in the work place meant that the products were not as good as they once were. Venice was always known as having the best cloths and wool, but with the lack of skilled labourers their quality had went down, until their workers got accustomed to their new jobs.

This was the just the beginning of the lack of productivity in Venice during the seventeenth century. Productivity in Venice had begun to decline shortly after the start of the seventeenth century. “In Venice the woollen industry at the beginning of the seventeenth century produced an average of 20000 cloths annually. At the beginning of the eighteenth century the average annual output had come down to about 2000 cloths. ” Venice had lost a lot of business during the seventeenth century. In the first two decades of the seventeenth century there passed through the Venetian customs an average of about 100,000 bales; in about 1675 the figure was around 70,000. ” Their total cloth export had declined a significant amount between the seventeenth and eighteenth centuries. During the sixteenth century Venice was the biggest supplier in cloth to the Near East. “By the beginning of the eighteenth century Venice was exporting to the Near East an average of no more than 100 cloths a year (about 50 to Constantinople and the same number to Smyrna). With the lack of business their profits went down considerable amounts when compared to what the French and English were making. “The total business of the Venetians in the two markets of Constantinople and Smyrna had fallen to an average of about 600,000 ducats a year, while that of the French was worth about 4 million and the figure for the English was probably little less than that for the French. ” For Venice to get out of this economic decline they would have to cut costs on their products and reduce the wages of their employees. There was also blame on the government interaction with the trading regulations.

The Venetian government had prevented Venice from competing with England and Holland for trade prices. The guilds have often been blamed for not wanting to change technologies and not wanting to produce low-cost materials. Other researchers have come to the conclusion that it was not the guilds that prevented Venice’s improvement in trading, but it was the government. “Rapp musters a great deal of evidence to show that Venetian guilds did not fix wage rates above the free market level, that they did not restrict entry, and that they were eager to innovate. The government also prevented the guilds from making any improvements in Venice’s trade networks and trade costs. The government would not allow the guilds to produce a cheaper and lower quality of product that would have been able to compete with England and Holland’s low priced products. The government also taxed all exporting products, which of course increased the cost, so it was not that Venice’s products were more expensive it was that the government put more taxes on the product to make it much more costly. It was the government also that through its tax policy contributed to the high price of Venetian exports—nearly one-half of the cost of a piece of wool cloth could be attributed to taxes. ” This was one of the main factors that caused other countries to buy their products somewhere else where because they paid a lower cost and did not have to pay any taxes on the product they bought. The Venetian government was also quite prominent that the qualities of the products stay higher than the other countries.

The government thought that if their products were superior to everyone else’s then the other countries would eventually pay the extra amount of money for a better quality of cloth. The government had caused a bit of an economic decline, but some people feel that even with trading and production declining, Venice still was very stable during the seventeenth century. Richard Rapp is one researcher who feels that Venice did not decline, it just slowed down. “In the purest economic sense, Venice did not decline.

If income and population levels are constant, a sustained decline in output cannot have occurred. ” Rapp also says that if the population, amount of product made and the standard of living in the sixteenth and seventeenth centuries are compared they will see there is very little difference. Venice neither declined or grew it stayed the pretty much the same. They lost lots of skilled workers to emigration, but grained about the same amount through immigration. Some people feel that the loss in manufacturing was made up in other aspects of the economy. The losses suffered by manufacturing, however, were made up by the expansion of other sectors of the economy, namely food processing and selling, retailing, and construction. As a result, population, overall levels of employment and real income per capita remained unaltered. ” It is also felt that domestically Venice stayed relatively strong throughout their adjustment period with new technologies and employment, even though they had lost most of their trade exporting. However, it still seems that without being one of the top trading cities Venice’s economy had still dropped a considerable amount.

Venice’s economy throughout Italy may have stayed the same, but between other countries their economy had dropped. Countries that were the most successful during the seventeenth century had great trade routes and trading partners and at this time Venice had lost some of their trading partners and their trade routes were not as convenient as England’s, Holland’s, or France’s. Venice’s economy had been through quite a bit during the seventeenth century. At the beginning of the seventeenth century Venice was one of the most powerful cities in the world, when it came to export and producing the finest products.

England, France, and Holland had come up with new technologies which helped them produce their goods for much cheaper and they also paid their workers less money as well. Since they could make their product for less and put less money into their workers they began making a much bigger profit than Venice. Venice felt that they did not have to change the way they made their cloth or change how much they were paying their workers. In the end, the poorer quality of cloth from England, France, and Holland was much more successful than the better quality and more expensive cloth from Venice.

The government did not help Venice recover from their loss in trading goods, they put tariffs on almost everything and every product made the government put tax on it. On some of the products the taxation was just as much as the product itself. The government did not let the guilds work on new ways of manufacturing or let them produce a lesser quality of cloth so they would not lose as much money. The government felt that if they had a better quality of product eventually they would regain their customers back.

Holland and England also had found better routes of transportation, routes that did not have to go through Venice. Since there were less routes coming through Venice there were fewer ships in the port and therefore less people stopping in to get other supplies from Venice. There were other countries that stopped trading with Venice because Venice had fewer ships than England and Holland because they were lacking building supplies. Since Venice had fewer ship builders that meant they had fewer skilled ships builders and they were still using ships that were too big and not as stable as the ones used by other countries.

Venice also did not have as many skilled oarsman and many countries felt they could not rely on people who were not as skilled. Venice’s productivity had decreased significantly during the century because of the superior trading from England and Holland. Rapp feels that Venice’s economy did not decline as much as everyone once thought it did, but after researching it looks like they lost a lot of their income. There may still have been jobs for everyone in Venice and everyone had work, but if there is not as much foreign income coming in as there once had been, that means that the economy had to have declined.

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