Byzantine economy


The Byzantine economy was among the most robust economies in the Mediterranean and the world for many centuries. Constantinople was a prime hub in a trading network that at various times extended across nearly all of Eurasia and North Africa. It could be argued that up until the 7th century, the Eastern Roman Empire had the most powerful economy in the world. The Arab conquests, however, would represent a substantial reversal of fortunes contributing to a period of decline and stagnation. The Byzantine state restructured its administrative and fiscal systems, introducing the theme system, which organized land and military service in a way that ensured both local defense and agricultural productivity. Rural life revived as new lands were brought under cultivation, and local economies became more self-sufficient, reducing dependence on long-distance trade that had been curtailed by the loss of eastern territories. By the 9th and 10th centuries, the empire experienced a notable resurgence: agricultural output increased, population levels rose, and the circulation of coinage expanded once again. However, by the 12th and 13th centuries, the economic balance began to shift. Western maritime republics such as Venice and Genoa gradually overtook Byzantine merchants, largely due to the tax exemptions and trading privileges granted to them under the Komnenian emperors. This process accelerated after the Fourth Crusade and the establishment of the Latin Empire, during which Venetian traders gained control over key ports and commercial networks once held by the Byzantines. The Byzantines continued to face economic challenges during the Palaiologan era until its fall in 1453.
One of the economic foundations of the empire was trade. The state strictly controlled both the internal and the international trade. Constantinople remained the single most important commercial centre of Europe for much of the Medieval era, which it held until the Republic of Venice slowly began to overtake Byzantine merchants in trade; first through tax exemption under the Komnenoi, then under the Latin Empire.

Agriculture

From 4th to end of 6th century the eastern part of Roman Empire had demographic, economic and agricultural expansion. The climate was opportune for farming. Even in marginal regions rural settlements flourished. The Arab conquests of the 7th century and subsequent territorial losses disrupted traditional agricultural regions, particularly in Egypt and the Levant, leading to a decline in surplus production and forcing the empire to rely more on Anatolia and the Balkans. During the middle Byzantine period, agricultural recovery occurred alongside political stabilization. Reforms encouraged small-scale farming, irrigation, and improved crop techniques. Large estates still existed, but many peasants gained more autonomy, and the production of olive oil, wine, and cereals expanded to meet both domestic and trade demands.
The 12th century saw the development of tilling and milling technologies in the West, but there is less evidence for similar Byzantine innovation. Western advances like the windmill were adopted by the Byzantines, but, unlike the West, Arabic numerals were not yet implemented for double-entry book-keeping. There are illustrations of agricultural implements from illuminated medieval manuscripts of Hesiod's Works and Days including the wheel, mortar, pestle, mallet and some parts for carts and soleard plough, but, even centuries later, neither the plough nor wheeled cart were widely in use, possibly because of the nature of the Pontic terrain.
In the late Byzantine period, after the Latin occupation and territorial fragmentation, agriculture faced new challenges. Estates were often overtaxed, and warfare or raids disrupted rural life. Despite this, certain regions, particularly in western Anatolia and parts of Greece, remained productive, supplying local markets and urban centers. Throughout Byzantine history, agriculture remained the foundation of the empire’s economy, adapting to political and environmental pressures while sustaining urban populations, the military, and long-distance trade.

Economic and fiscal history

The Eastern Roman economy suffered less from the Barbarian raids that plagued the Western Roman Empire. Under Diocletian's reign, the Eastern Roman Empire's annual revenue was at 9,400,000 solidi, out of a total of 18,000,000 solidi for the entire Roman Empire. These estimates can be compared to the AD 150 annual revenue of 14,500,000 solidi and the AD 215 of 22,000,000 solidi. By the end of Marcian's reign, the annual revenue for the Eastern empire was 7,800,000 solidi, thus allowing him to amass about 100,000 pounds/45 tonnes of gold or 7,200,000 solidi for the imperial treasury. Warren Treadgold estimates that during the period from Diocletian to Marcian, the Eastern Empire's population and agriculture declined a bit, but not much. Actually, the few preserved figures show that the largest eastern cities grew somewhat between the 3rd and 5th centuries. By Marcian's reign the Eastern Empire's difficulties seem to have been easing, and the population had probably begun growing for the first time in centuries. The period encompassing Anastasius' and the first half of Justinian's reign saw further economic expansion, with state revenues increasing and a decline in land abandonment and complaints of overtaxation. Such growth would also explain the other signs of public and private prosperity at the time, including Justinian's ability to undertake so many costly activities at once.
The wealth of Constantinople can be seen by how Justin I used pounds/1.66 tonnes of gold just for celebrating his own consulship. By the end of his reign, Anastasius I had managed to collect for the treasury an amount of 23,000,000 solidi or 320,000 pounds/144 tonnes of gold. At the start of Justinian I's reign, the Emperor had inherited a surplus from Anastasius I and Justin I. Before Justinian I's reconquests the state had an annual revenue of solidi, which further increased after his reconquests in 550. At the height of Justinian's reign in 540, the state revenues of the Byzantine Empire were estimated to be as high as 11.3 million solidi. Due to the empire's affluence, Justinian was able to undertake costly building projects. The church of the Holy Apostles in Constantinople and the church of Saint John at Ephesus likely cost 1 million solidi each, and the Perpetual Peace with Persia cost 792,000 solidi. Nevertheless, Justinian I had little money left towards the end of his reign partly because of the Justinian Plague, and the Roman-Persian Wars, as well as his wars of reconquest in Italy and North Africa, all of which greatly strained the royal treasury. In addition to these expenses, the rebuilding of Hagia Sophia cost pounds/9 tonnes of gold. Subsidies to enemy states were also paid by Justinian's successors: Justin II was forced to pay 80,000 silver coins to the Avars for peace; his wife Sophia paid 45,000 solidi to Khosrau I in return for a year's truce, and then Tiberius II Constantine gave away pounds of gold each year for four years, on top of giving away the treasure of Narses and 1,000 centenaria to the poor. The East Roman Empire's aristocratic language of Latin began to erode and give way to the native language of Greek starting during the Roman-Persian Great War of 602-628, the solidus would begin to also be known by its Greek name, the nomisma. For all of the financial difficulties the empire faced, the government kept its revenues at a remarkably high level under the circumstances and was able to pay their soldiers. The government would have been functioning at a high level of efficiency to handle its fiscal problems well and avoid financial collapse and bankruptcy.
However, after the deposition of Maurice and the ascension of Phocas to the throne, the empire's financial situation worsened. During the final Byzantine Sassanid War, Egypt, Syria and Byzantine Mesopotamia were lost to the Persians, and these territories must have made up more than half of the empire's total revenues. Heraclius was able to avert bankruptcy through unprecedented borrowing from the church, substantially reducing state salaries and melting down statues in order to pay the empire's soldiers. Although Heraclius regained those territories following his victory in the war, the Arabs would conquer those territories a few years later.
The Byzantine-Arab Wars reduced the territory of the Empire to a third in the 7th century and the economy slumped; in 780 the Byzantine Empire's revenues were reduced to only nomismata. The main reason for such a drastic decline in revenues was due to the conquest of Syria, Egypt and Africa by the Arab invaders. Additionally, most cities shrank, and the trade volume declined greatly. The revenues of the empire in the year 641 dropped to 3.7 million nomisma, and dropped further to 2 million nomisma during Constans II's reign. It was only from the 8th century onward the Empire's economy improved dramatically. This was a blessing for Byzantium in more than one way; the economy, the administration of gold coinage and the farming of the Anatolian peninsula served to meet the military's constant demands. Since Byzantium was in a constant state of warfare with her neighbours the military required weapons to be manufactured by the bigger cities whilst the smaller towns were subject to grain, wine and even biscuit requisitions by Imperial officers. Even though the soldiers' pay was minimal, large armies were a considerable strain on Byzantium. But soldiers were paid to serve in the army; they would in time spend the money acquiring their own goods. As a result, the Byzantine economy was self-sufficient, allowing it to thrive in the Dark Ages. The success of the Byzantine army was in no small part due to the success of her economy.
Around 775, the land and head taxes yielded an estimated 1,600,000 nomismata/7.2 tonnes of gold annually for the empire. Commerce during this period slumped, therefore only contributing 200,000 nomismata annually. The expenditures of the period were quite large when compared to the annual revenues. Approximately 600,000 nomismata went to the payroll of the army annually while other military costs took another 600,000 nomismata annually. Supporting the Byzantine bureaucracy needed 400,000 nomismata. Also, imperial largess cost the treasury 100,000 nomismata every year. All of these expenses meant that the Byzantine government had only about 100,000 nomismata in surplus revenue each year for treaties, bribes, or gifts.
Expenses again soared, when a massive Muslim army invaded the empire in 806, forcing Nikephoros I to pay a ransom of gold coins and a yearly tribute of gold coins. In order to impress the Caliph of Baghdad, Theophilos distributed 36,000 gold coins to the citizens of Baghdad, and in 838, he was forced to pay gold dinars to the Caliph. The Byzantine economic recovery in the early 9th century can be seen by the fact that Emperor Theophilos was able to leave 7,000,000 nomismata/31.5 tonnes of gold in the imperial treasury for his successor in 842. After Theophilos' death his wife Theodora II continued his successful policies and even increased the imperial reserves to 7,848,000 nomismata.
Around 850, the land and head taxes yielded an estimated 2,900,000 nomismata annually for the empire. Commerce during this period increased dramatically, therefore contributing 400,000 nomismata annually. The expenditures of the period were large, but manageable by the treasury. Approximately 1,400,000 nomismata went to the payroll of the army annually while other military costs took another 800,000 nomismata annually. Supporting the Byzantine bureaucracy needed 500,000 nomismata. Also, imperial largess cost the treasury 100,000 nomismata every year. All of these expenses meant that the Byzantine government had about 500,000 nomismata in surplus revenue each year, much more than in the 8th century.
Unfortunately under their son Michael III the reserves dwindled to about 100,000 nomismata. However, under Basil I's prudent economic policies, the state quickly raised 4,300,000 nomismata, far more even than the empire's annual revenue of nomismata. During the period of the Macedonian Emperors, internal trade within the Byzantine Empire grew, which increased the wealth of the Byzantine Empire. State revenues during this period grew rapidly, increasing from 3.1 million nomismata in 842 to 3.9 million nomismata in 959, to 5.9 million nomismata in 1025.
When Liutprand of Cremona was sent as an ambassador to the Byzantine capital in the 940s, he was overwhelmed by the imperial residence, the luxurious meals, and acrobatic entertainment.
Sviatoslav I was paid pounds of gold by Nikephoros II to invade Bulgaria in 968. John Tzimiskes received the equivalent to 3,000,000 gold coins from the Muslims of the city of Ecbatana. By the time of Basil II's death in 1025, the annual income had increased to - 7,000,000 nomismata, which allowed him to amass a large gold reserve of 14,400,000 nomismata in the treasury for his successor. Even then, Basil II had waived two years' worth of land and hearth taxes, which would have been worth 8 million more nomismata. The wealth of the empire at Basil's death was so immense that it impressed the Muslims, such that a late eleventh-century Arab source informs us that “When Basil, son of Romanos, the emperor of Byzantium, died... he left ten thousand qintars of gold coins and jewels worth 54 million dinars.” Constantine IX was also able to send the Caliph 30 quintars of gold and 300,000 gold dinars.
Nevertheless, the Byzantine economy went into a long decline until the Comnenian Dynasty was able to revive the economy. In the aftermath of the Battle of Manzikert, Alp Arslan at first suggested to Emperor Romanos IV a ransom of gold coins, but later reduced it to gold coins with a further gold coins annually.
In exchange for an alliance, Alexios I sent gold coins to Emperor Henry IV. The wealth of the empire under the Comnenians can be seen by how Emperor Manuel I was able to ransom some Latin prisoners from the Muslims for dinars, then dinars for Bohemond III in 1165, dinars for Raynald of Châtillon, and dinars for Baldwin of Ibelin in 1180. When Manuel became emperor he ordered 2 gold coins to be given to every householder in Constantinople and 200 pounds of gold to be given to the Eastern Orthodox Church. When his niece Theodora married King Baldwin III of Jerusalem in 1157, Manuel gave her a dowry of gold coins, gold coins for marriage expenses, and presents which were worth gold coins total. The expense of Manuel's involvement in Italy must have cost the treasury a great deal. Then he also promised to pay pounds of gold to the Pope and the Curia. During his reign, Manuel bought a very rich jewel which was used during the coronation of the Latin Emperor Baldwin I. The main source of the state's wealth in the 12th century was the kommerkion, a customs duty levied at Constantinople on all imports and exports, which was stated to have collected hyperpyra each day. This, combined with other sources of income, meant the empire's annual revenue was at 5,600,000 hyperpyra in 1150. Under the Komnenian emperors, many exemptions of trade duties were given to the Italian traders, which meant the loss of about 50,000 hyperpyra annually. A Venetian embassy visited Constantinople in 1184 and an agreement was reached that compensation of 1,500 pounds of gold would be paid for the losses incurred in 1171. By the end of Manuel I's reign the amount of money used to maintain the Komnenian imperial family is said to be able to maintain an army of 100,000 men.
File:Venice – The Tetrarchs 03.jpg|thumb|The porphyry statue of the Tetrarchs was plundered from Constantinople and placed on the façade of Saint Mark's Church, Venice.
After the demise of the Komnenoi, the Byzantine economy declined under the impact of several factors: the mismanagement under the Angeloi, the dismemberment of the Empire after 1204, the successive territorial losses to the Turks, and the Italian expansion in the Mediterranean and the Black Sea. When Isaac II Angelos became Emperor in 1185, a mob broke into the palace and carried off pounds of gold, pounds of silver, and 20,000 pounds of bronze coins. In 1195, Holy Roman Emperor Henry VI forced Byzantine Emperor Alexios III Angelos to pay him a tribute of pounds of gold and in 1204 Alexios III took pounds of gold when he fled Constantinople, leaving the treasury empty. Fires ravaged the northern and central sections of the city, resulting in a steady exodus of residents. The sack of Constantinople by Latin crusaders in 1204 was an economic catastrophe. However, even with the empire at its poorest in 1203, Alexios IV managed to pay 440,000 hyperpyra out of silver marks to the Crusaders. The official tally of plunder from Constantinople was about silver marks, the equivalent of about 3,600,000 hyperpyra or 50,000 pounds/22.5 tonnes of gold, although this figure likely does not include the value of the countless icons and books destroyed, ancient statues melted down, and the destruction of other cultural artifacts. In 1237, Latin Emperor Baldwin II pawned the Crown of Thorns to a Venetian merchant for gold coins.
By the time the Palaiologoi took power, Italian merchants had come to dominate the trade by sea whilst Turkic incursions prevented any success from trade across roads. Michael VIII Palaiologos strove to restore the capital, but lacked the resources to do so. In 1282, Michael VIII was forced to drain the treasury to pay the enormous bribe of hyperpyra to King Peter III of Aragon to invade the Kingdom of Sicily. By 1303, the empire's annual revenue dropped to less than 1,800,000 hyperpyra, under Andronikos II Palaiologos. In 1321, only with extreme effort was Andonikos II able to raise revenues to 1,000,000 hyperpyra.
The Byzantine economy had declined so much that by 1343, Empress Anna of Savoy had to pawn the Byzantine crown jewels for Venetian ducats, which was the equivalent of 60,000 hyperpyra. In 1348, Constantinople had an annual revenue of hyperpyra while across the Golden Horn in the Genoese colony of Galata, the annual revenue was hyperpyra. When Emperor John VI Kantakouzenos attempted to rebuild the Byzantine navy, he was only able to raise an inadequate hyperpyra. The only success during this period was when the Republic of Genoa agreed to pay a war indemnity of hyperpyra in 1349. When Emperor John V Palaiologos was captured by Ivan Alexander in 1366, he was forced to pay a ransom of florins. In 1370, the empire owed Venice, hyperpyra for damage done to Venetian property. In February 1424, Manuel II Palaiologos signed an unfavorable peace treaty with the Ottoman Turks, whereby the Byzantine Empire was forced to pay silver coins to the Sultan on annual basis. In 1453, the economy of the Genoan quarter in Constantinople had a revenue almost 7 times greater than that of the whole Empire — not even a shadow of its former self. Emperor Constantine XI owed Venice 17,163 hyperpyra when he died in 1453.
The exact amount of annual income the Byzantine government received, is a matter of considerable debate, due to the scantness and ambiguous nature of the primary sources. The following table contains approximate estimates.
YearAnnual Revenue
3059,400,000 solidi/42.3 tonnes of gold
4577,800,000 solidi
5188,500,000 solidi
5335,000,000 solidi
54011,300,000 solidi/50.85 tonnes of gold
5556,000,000 solidi
5658,500,000 solidi
6413,700,000 nomismata
6682,000,000 nomismata
7751,800,000 nomismata
7752,000,000 nomismata
8423,100,000 nomismata
8503,300,000 nomismata
9594,000,000 nomismata
10255,900,000 nomismata
11505,600,000 hyperpyra
13031,800,000 hyperpyra
13211,000,000 hyperpyra