The Brutal Trade War Between the Byzantines and the Venetians

The Byzantines and the Venetians were the undoubted trade masters across the Mediterranean during the Middle Ages. Understandably, their relationship was far from harmonious, as both nations were competing to dominate the world’s most important trade routes of the time. And this led to a devastating trade war.

The relationship between the Byzantine Empire and Venice had both its ups and downs, with the two engaging at some point in the most consequential trade war of history, fundamentally shaping and changing the balance of power in the Mediterranean.

This fascinating chapter of medieval history teaches us valuable lessons about economic freedom and protectionism, especially at a time when these trends are coming back stronger than ever on our global stage.

The good years between the Byzantines and the Venetians

During the late 10th century and more specifically in 992, Byzantine Emperor Basil II (the Bulgar Slayer) made a groundbreaking treaty with Venice, offering the Venetians exceptional trade privileges in exchange for their naval support to the Byzantine Empire, which was still known as the Roman Empire, at the time.

This diplomatic arrangement was strengthened further with the Golden Bull of 1082. This agreement allowed Venetians to trade tax-free throughout the Byzantine Empire, effectively creating a free-trade area that covered most of the Central and Eastern Mediterranean. This agreement helped turn Venice from a modest maritime republic into a dominant Mediterranean power ruling the lands and the seas for centuries.

The first clouds between the Venetians and the Byzantines

By the 12th century, the free-trade arrangements between the Byzantines and the Venetians had become increasingly problematic. Nearly 80,000 Western merchants, including 20,000 Venetians, had made Constantinople their home. This number was exceptionally large if we consider that Constantinople’s population at the time was half a million.

Local Byzantine merchants struggled to compete with their tax-exempt Venetian counterparts. This slowly but steadily created a simmering resentment within the capital of the Byzantine Empire for the privileged Venetians.

The breaking point

The situation became untenable in 1171 when Byzantine Emperor Manuel I Komnenos made a bold and controversial move.

Following a series of obscure and mysterious attacks on the Genoese area at Galata, the emperor directly blamed the Venetians for the unrest and ordered the mass arrest of all Venetian citizens who were residing within Byzantine territories.

This hugely escalating and dramatic action was indeed a severe diplomatic breach of the well-established good relations between the two Mediterranean powers.

Understandably, Venice responded quickly and aggressively. The republic dispatched a powerful fleet to confront the Byzantines who, according to their view, so blatantly disrespected the Venetians.

However, the campaign ended disastrously for the Venetians due to hasty planning and disease outbreaks. Despite their naval superiority, they failed to secure victories against the Byzantines, marking one of their most humiliating military setbacks.

The consequences of the Byzantine – Venetian trade war

The aftermath of this brief and yet consequential military stand-off reshaped Mediterranean politics for the centuries to come.

The deterioration of Byzantine-Venetian relations was significant, profound, and irrevocable, even with the establishment of a formal truce six years later in 1177.

The war’s most significant outcome in terms of trade emerged later when Venice significantly influenced the Fourth Crusade, leading to its unexpected and hostile diversion to Constantinople in 1204. This event resulted in the catastrophic sack of one of the world’s most prominent cities.

The trade war between the Byzantines and the Venetians made the Byzantine Empire’s vulnerabilities evident. Their previous concessions to Venice had severely diminished their ability to recover from the financial losses of so many decades, which helped the Venetians tremendously in accumulating wealth and therefore power and military might.

The Byzantines’ unjustifiable dependence on foreign merchants and mercenaries instead of their power had created a dangerous economic imbalance that played a crucial role in the Eastern Roman Empire’s steady decline in the decades to come.