The Hidden History of Money in Medieval Europe

Is money a commodity or credit. I think both. But the commodity story is told everywhere whereas the credit story is not well known. This video therefore fills that gap by explaining the re-emergence of credit in Europe.

BIG SHOUTOUT to Professor Dirk Bezemer, with whom I collaborated to create the script for this video.

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SOURCES:
I've linked my sources in the blog that goes along with this video. Most links are in the text. But, I added some extra literature and data sources to the end of the blog.

Timestamps:
0:00​ - introduction & theories
2:55 - rise of the money changers
5:38 - rise of bill-dealers
7:46 - rise of bankers & conclusion

Attribution:

Narrated and produced by Dr. Joeri Schasfoort (University of Cape Town & University of Groningen)

[Skedz]

As someone who desperately was looking for quality, non-sensational economic videos on YouTube I am so glad I found your channel.

[MrXignacioX]

Actually, my bachelor's degree thesis was based on medieval credit between Spain and Flanders, focusing on exchange lettets and its moral implications. Great video!

[MstlyHarmless]

Great video. One point I would add is that metal coins almost always traded at a greater value than the metal they contained. For example, per the wiki on Roman Currency, the Denarius traded at between 1.6 to 2.85 times the value of the metals it contained. You touch on this briefly, but this is due to the fact that not only did the minted coins have use-value as a unit of exchange, but they were also demanded in tax payment by the sovereign. In this way, even metal coins were a form of credit in the sense that they were tax credits issued by the state. I.e, they were redeemable for settlement of tax liabilities, giving them a value greater than their underlying metal content.

[forthelasttimeisfedericono]

Greetings from Florence! I salute the use of Cosimo the elder of Medici portrait as “standard” banker. I just want to add that the competing families of bankers de facto fueled the renaissance and made this city rich, still more than 500 years thanks to Tourism! Great job and Ciao!

[EusebiusAT]

As a young uni student (sociology), just getting into economics, your videos have got to be some of my favorite on this platform! You are a good communicator, yet you don't shy away from diving deep and telling some of the more untold stories of economics. Economics is always portrayed like it's math, and while math is of course an important tool of economics, it is really a kind of sociological or anthropological field and I think you are very good at incorporating that human side, so it doesn't all become tables and models in the abstract. Keep making these and I'll keep enjoying them!

[TuomasStarck]

This and other videos of yours are invaluable to me! I've wanted to understand the fundamental nature of money for a long time and I've even finished a minor in economics as part of my studies, but that never really addressed my questions about money. With these videos I'm finally starting to get a picture.

If I may suggest, the editing could be slightly more relaxed occasionally. For this kind of information heavy content having a bit more space between some cuts would allow the viewer to absorb and process the input better.

But overall fantastic stuff and please keep making more!

[HarveyDangerLurker]

This was a really great overview of Medieval European banking. I have been really enjoying your content, can't wait to see more.

[mpireoutdoors]

Absolutely loving your realistic topic selection. Please don't give in and start making "viral economics" videos - ok maybe just a few for the algorithm.

[krissp]

This feels like an explanation of the Spice and Wolf anime, which also covers the mechanics and factors of trade. Thanks for explaining the links between trade and credit! It builds on what I've read in textbooks about consumption smoothing. :)

[IllIl]

Fascinating video! I've come across bits and pieces of this history so it was great to see it all synthesised in this presentation. The insight that anyone can create credit 'out of thin air' was a crucial one for me, and it was great to see it expanded here with a logical progression in the historical example. Thanks!

[JohnCooganPlus]

Recently found your channel and instantly subscribed. Amazing content! Please do more response videos / correcting the record. It’s super interesting to walk through common misconceptions with a concrete example. There are tons of videos you could review and they would probably perform well too! I don’t see it as drama or negative, I think the channels you talk about are well intentioned but everyone makes mistakes!

[blasty]

The word "bank" originally meant "bench" and comes from benches in Venice where early money exchangers were sitting :)

Another product of late medieval are shares and investments. Italian city-states became extremely wealthy thanks to trade, mostly in the Black Sea and East Mediterranean, where they could buy exotic goods and then resell them at higher prices elsewhere. But the problem with this was that it required a lot of money to purchase those goods and most ship owners didn't have that money. Therefore before going on a trip, they would sell "shares" of future profits on the docks, and people would buy shares based on their trust in ship-owners knowledge of prices and demands. Since there was always a possibility that a ship would sink in a storm, be looted by pirates or enemies, investing a lot of money in a single voyage was risky so people preferred buying smaller shares in many different ships as that minimized the risk. It's pretty much the same basic principle how modern stock market investment works.

[SW-fkrb]

I've now watched every video on this channel. The content can't come fast enough. It's been 3 weeks and I'm starting to come unhinged.

[unkouwnfigure]

Great vid, professional quality, happy to see your channel grow!

[murraykeith]

You're videos are helping a simple village boy like me gain some clarity on how money evolved and how we can use it to our advantage. Thank you.

[Caius]

Reminds me of my malfeasance and misbehavior financial history module.

Another wonderful video! Moving to NL soon; hope to somehow bump into you to ask for an autograph

[Merle]

Credit being the original medium of exchange in customary and informal economies never occurred to me, at least not in those terms. But it is so true.

[teejin]

Another amazing video. I really appreciate the fact you have taken the time to tell the history as well.

[krisbrox]

Fantastic explanation and history lesson. Thank you for creating quality videos like this!

[dan]

Honestly this just shows how reliant we were on derivatives contracts for much of European history. It also shows how we sort of had fractional reserve banking.