19. The Fourth: The Banker’s Crusade (1202-04)

The Rise of the Merchant

So which cultures have collided in the crucible of the Crusades? The Byzantium Empire, the bastion of Eastern Christianity, was in the middle between Holy Roman Empire of the Western Europe and the Islamic Empire to their east. Byzantium was gradually crumbling – eventually crushed by the growing militarism of the empires that surrounded them. There were also the 3 castes of the Holy Roman Empire – each with distinctly different motivations – the Catholic Church, who just wanted converts, the military aristocracy descended from the northern tribes with their warrior ethic, who wanted to battle for kingdoms, and the peasantry with their fervent belief and nothing to lose. A fourth Western European caste was to be the key player in the Fourth Crusade (1201-1204) – deemed the Banker’s Crusade, for reasons that will become apparent.

The Italian maritime city states, notably Venice and Genoa, also played a crucial role in the Crusades. They provided vital assistance from the sea, the Mediterranean, supplying the Latin troops with arms and supplies, as well as military support. Without their control of the water, the Crusaders would have been doomed. However it came at a great price. The Italian city-states did not provide their services for free – as part of the grand and glorious crusade to reclaim Jerusalem for the righteous. Instead they charged dearly for their services. Indeed part of the reason that the Kingdom of Jerusalem failed was the exorbitant prices charged by the Italian merchants – draining the tenuous wealth of the city into their greedy hands. They were motivated by profit, not religion – as witnessed by the easy fortunes they made selling fellow Latin Christians into slavery.

Note that the European military aristocracy based in the Nordic/Germanic warrior cult looked down on the materialism of the Italian merchants. As mentioned the warrior does not work for a living, but takes through plunder and looting. Most of the early armies got their pay when they sacked a city. There were no salaries, just the biggest cut of the booty after the victory. So this idea of charging for military services, independent of plunder, seemed almost unethical to the warriors – a corruption of their urge to prove themselves in battle. Unlike the warrior and like the merchant (a lower class in the Nordic mythology) the Italians were loaning their services for pay – perhaps even to the highest bidder, independent of patriotism or loyalty. All these tendencies explode in the 4th Crusade – topsy-turvy – up side down – forever and ever. Amen.

The Multiplication of Crusades

By the turn of the 13th century Jerusalem was still in Muslim hands – although Saladin had provided safe passage for unarmed Christian pilgrims to the Holy Land, as it had been before the 1st Crusade. However the success of the Crusades had inspired the Pope to call for many more crusades against any presumed enemy of the Church. (As late as the 16th century the Pope called on the King of France to go on a Holy Crusade against King Henry VIII of England for breaking with papal authority.)

Further before the 1st Crusade the Pope had already called for religious wars against the Islamic Empire and blessed anyone who participated. The difference between these wars and the First Crusade was the influence of the populace. In the prior the Pope had only been appealing to the Christian knights under his sway, as we was before the initial Crusade. But the political landscape changed when the people responded so enthusiastically and successfully in the First, pressuring their leaders to move on to Jerusalem, and in the subsequent Crusades pressuring their reluctant leaders to participate. This was a first in political history – the direct involvement of the people in the wars of the aristocracy.

Flexing his political muscles the Popes had used this technique to marshal the support of the populace behind him, which undermined the influence and power of the political leaders – a win-win for the papacy. Over the centuries the technique became less effective with overuse, but the Pope still had huge political clout at this time – just a little over a century after the First Crusade.

Islamic Jihads for control – Catholic Crusades for conversion

Note there was also a huge difference between the holy jihads of the Muslims and crusades of the Christians. The jihads of the Muslims were a military attempt to establish political control of a territory, whether it be city-state, kingdom or empire. However they did not demand mass conversion or death. Like the military conquerors before them they wanted political control, but were tolerant of religious differences, at least the monotheism of the Christians and the Jews. This was true throughout the Middle East and especially in Spain, where they established a golden age of literature and learning based on religious tolerance – where Jewish and Christian scholars were respected and allowed as much intellectual freedom as the Islamic philosophers.

The Crusades were totally different. The leaders demanded conversion of the conquered territories or death, ala Constantine, Clovis, and Charlemagne. This tendency was especially notable in the Spanish Crusades of Isabella and Ferdinand, where the Moors and Jews were expelled from the territory – the Jews after some had converted. So the Islamic rulers could live side by side with the Bible based religions as long as they respected their political control while the Christian rulers demanded that the conquered bow to their Christian rulers and to the Pope, as God’s representative on Earth. While the Muslims just wanted political control, the Christians wanted both political and religious control – a much more intense arrangement.

Byzantium’s Downfall


Let’s Make a Deal

Early in the 13th century Pope Innocent III, flexing his political clout, called another crusade against the Muslim Empire to recover Jerusalem. But this time the Latin Europeans decided to go against the entire Muslim Empire, not just territories on their perimeter, like the Holy Land. With this in mind the leaders decided to attack Egypt, the present capitol and heart of their empire. Because Egypt was located on the southern Mediterranean they were required to employ the Italian naval, specifically the Venetians, which came with quite a cost – 85,000 marks and one half of the conquests.

Enrico Dandolo, the doge of Venice, blind and in his 80s, was a shrewd businessman. When the Crusaders couldn’t make the exorbitant payment, he suggested that he would forego the money if they would attack Constantinople instead. Although Innocent III strongly opposed this course of action, the Holy Roman Emperor and many of the German princes supported it. Seeing his temporal power undermined the Pope employed all his resources to pressure the Crusaders, but they were in an untenable position with their huge financial commitment and had to bow to the demands of the Doge of Venice. Evidently greed has no age limit.

Although there were many contributing factors to this shift in direction from a Holy War against the Islamic Empire to an attack on the capital of the supposed religious brothers in Eastern Christendom, the main impetus was greed, as Constantinople was a wealthy trading center. Resentments concerning Byzantine obstructions in the prior Crusades, the revoking of trading privileges to the Genoa, Pisa, and Venice, old military grudges were all used as excuses, but the overriding theme was to obtain control of the wealth of the city.

Promising to put a rival claimant on the throne of the Byzantine Empire the Crusaders were not met with much resistance as the pretender to the throne fled. But the Doge of Venice had charged the new Emperor Alexius a high price as the cost for restoration to his ‘rightful’ position. When he couldn’t make the payments – ala the Crusaders, the Western army decided to take the city instead. They established a Latin king (Baldwin IX) of Byzantium for the first time; a Venetian became the Patriarch of Eastern Christendom, with all the revenue this entailed; and the Doge was given ‘a quarter and a half’ of the Eastern Empire for services rendered. The Pope also profited inadvertently because he was now the spiritual ruler of both Western and Eastern Christendom, which had been united by this somewhat accidental invasion.

The Church/Banker Alliance & the Fall of the Warrior-King

This was another first – the financier calling the shots. But it would not be the last. Prior to this war had been motivated by the greed of the powerful warrior. A general mustered up an army and promised them booty if they succeeded in conquering territory for the city-state, kingdom or empire. Of course armies needed money, which was raised in a variety of manners, but the generals were calling the shots, not the moneylenders. Although they may have made huge profits, they were always subservient to the political powers for their wealth and so were minor players in this time of the Warrior. This signified another huge change in the political landscape. Religious or national loyalty became secondary to the accumulation of wealth – i.e. Greed. And this tendency has continued to grow to this day. The Warrior is not in Charge anymore, as he was for so many millennium, instead it is the international financiers and businessmen, the Bankers, who call the shots – just like the Doge of Venice 8 centuries ago.

Strangely enough the West’s overthrow of Eastern Christianity due to the power of Money was the beginning of a long, fruitful, and influential relationship between the Pope and the Bankers – the merger of Money and Church. Prior to this the Church had been aligned with the Warrior Rulers, as epitomized by the Pope’s coronation of Charlemagne as the Holy Roman Emperor. It was essential to have a warrior ruler as an ally for survival. Else another warrior ruler would surely take over. Better to be proactive than reactive. But circumstances had changed in the three centuries since the tenuous position of the Pope had required a military alliance.

Although Charlemagne was the undisputed political leader of Christendom at the time of his coronation, the Western European political leadership had fragmented into many parts since then – with many kingdoms of varying size vying for control of a larger section of the geography. There was no one ruler of Western Europe. Indeed although the Pope was the undisputed spiritual head of the domain he was just one of the players in the political game. Because of the multiplicity of alliances that he could call upon for assistance, he was not dependent for survival upon any one king or emperor, as even the Holy Roman Emperor was just another player. (This was very different from Byzantium, where the Emperor was the absolute ruler of the Empire – with every other political entity subservient to his power.) The Church had become less dependent on any one Warrior Ruler for survival.

The Growing Power of the Pope

Further the Pope’s political power was in the ascendancy. This was in part due to the Crusades. The populace heeded his call to the cross and demanded that their leaders do the same. For obvious reasons the Pope’s power base shifted to include his flock – the People. So not only was he not dependent on a single Warrior-King for his power but he was now able to include the People in his arsenal to keep his Warrior-Kings at bay. This was why excommunication became such a powerful tool. As the spiritual ruler of Western Europe the Pope was able to turn the king’s subjects against him with a simple proclamation.

Note too that the Pope was the only force tying all of Western Europe together under one roof. Although there were a multitude of nationalities, languages, customs and diverse territories with competing claims and historical rivalries they were all united behind the Pope, as their spiritual leader. Although Latin Europe could be viewed as theocracy, it was actually more feudal in nature. Multiple power centers with continually shifting alliances were only loosely tied to the Papacy. His power was in no ways absolute. No position in Europe commanded the political authority of the Byzantine, Islamic or Chinese Emperor. That is why feudal is the best description for the political system of the time.

Merchant replaces Warrior in Importance

With this changing landscape came the rise of the wealthy merchant. During the Era of the Warrior Ruler in the West the merchant was totally subservient to the Military. After raided prosperous trading centers at will for centuries the northern tribes eventually remained as rulers, still fighting amongst themselves over the loot. With the Crusades an equilibrium was reached amongst the combatants with small amounts of land regularly changing hands due to the influence of a strong ruling family inevitably followed by weak heirs. Political boundaries and rivalries had become somewhat fixed with no new aggressive Players entering from the boundaries to refresh the Warrior cult that had dominated political landscape for so many millennium.

While the infighting continued the rulers now needed financing to further their schemes. Prior pillage and plunder was the name of the game. It was a ruthless time when might determined the outcome. This was one reason that Constantine moved the Roman Empire east – to escape the growing savagery from the northern tribes. However with the 1st Crusade came the realization that there was no new territory to conquer – as shown by the inability of the Norman’s to expand further into the Byzantine or Islamic territory and of the relative political equilibrium between the Byzantines and the Muslims. No military power reigned supreme. As a result military power turned inward to merely raid and plunder the territories of fellow warriors. With no opportunity for instant loot, as reveled by the Crusades the Warriors desperately needed funds to finance their endless barbarism.

With this need came the ascendancy of the businessman. The Doge’s financing of the 4th Crusade epitomized this trend and pointed the direction to the future. Although the Pope had resisted and fought this direction – partially from somewhat moral reasons (not indiscriminately attacking fellow Christians) the Pope benefited tremendously from this maneuver. Money as personified by the Venetians asked for the Pope’s blessing on their victory thereby giving his office even more credibility. The obvious was made manifest. Money and Church made better bed partners than the Warrior. For one the Warrior was constantly attempting to seize the Money with force and was continually competing with the Papacy for temporal control. Money however had congruent desires with Church – increase the number of subjects to increase the profits from member contributions. The Medicis, the powerful Italian family who drove the Renaissance, epitomized and culminated this trend, as their clan included 3 Popes and countless bankers. Indeed it took a banker’s wealth to buy the papacy.

Banking & War: A Continuing Relationship

The 4th Crusade might have been one the first major wars directed by Money, but it was certainly not the last. As Money became intimately linked with the Papacy it became transnational like the Pope. The lenders of money knew no boundaries or loyalties except the increase of revenue to satisfy endless greed. With this trend the bottom line became the determining factor – not compassion, not morality, not even religious belief or cultural superiority, just the size of the profit.

And the driving force behind banking, the creation of paper currency and endless credit was the need to finance wars. A good investment for the winner – potential ruin for the loser – but the banks always profited no matter who reigned victorious. Hence it was in their best interest to encourage war – lending money to both sides – demanding vital concessions when the money came due – just like the blind Doge of Venice so many centuries before.

Besides the Medici family the most notable example of this strategy was the Rothschild clan, who became rich by establishing a family run bank in each of the major European countries designed to raise money for war. The French Rothschilds were even decorated by the government for efforts to raise money on behalf of the country. So the circumstances of the 4th Crusade revealed another of the roots of corruption – International Money devoted to Profit – unattached to moral consequence.

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