The Medici Production Function
No accountancy, no culture.
"He's not a prince or a king. He is the de facto ruler of Florence because he's the head of the bank and he's the head of the political network."
This is the central Medici production function. Forget the formal titles; the real currency was, well, currency. And networks. Cosimo de' Medici’s power stemmed not from a crown but from the ledger book and the intricate web of amici—friends who owed him.
This is a model of influence that feels strikingly modern. Power resided with the mercantile elite, not the landed nobility; in fact, becoming a noble was a punishment that excluded you from office. It’s a republic where the ultimate status is derived from commercial and financial acumen, not inherited titles. The state is, in essence, a venture to be managed, and the most successful manager is the one who controls the capital flows.
What was the return on this investment? Not just wealth, but a dynasty that sponsored the Renaissance. The art, the architecture, the philosophy—all underwritten by a sophisticated understanding of double-entry bookkeeping and the strategic deployment of capital. No accountancy, no culture.
For a deeply engaging narrative on how this all played out—the triumphs, the conspiracies, and the eventual decay of the family firm—check out The Rest is History's recent series on the Medici. It's a masterclass in the economics of power.
Listen to the full series here.