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The Fall of the Byzantine Empire: The Greatest Story You’ve Never Heard

When people tell decline-and-fall stories, they discuss the Fall of the Roman Empire.

There are a million different versions of the Fall of the Roman Empire. People invoke loss of moral will to fight, absence of technical innovation, deforestation, the use of lead pots, and many other factors.


Fall of Rome stories show only half the picture. They talk about the Western Empire – the part ruled by Italy which fell in 476. They ignore the Eastern Empire, what we call Byzantium, which was based in Constantinople.

Byzantium lasted much longer than Rome. It survived until 1453. After Rome had completely collapsed, Byzantium was a center of power, prosperity and culture. There was a rough period in the 600's and 700's when it was victimized by invasion. But it recovered well. At its height in 1050, it reached from Southern Italy to Syria. They had a common legal and monetary system. Educational attainment was high. Nearly a third of the population was literate. This was higher than the literacy rate of 18th century France or that of the great dynasties of China. Numeracy was widespread. They built aqueducts and functioning clocks. Their silks were highly regarded. Their mosaics and religious art were magnificent.


Byzantium had natural economic advantages. They inherited the Roman educational system.  They preserved Roman engineering skills which made them skilled manufacturers. Byzantium included Greece, long a center of shipbuilding technology and sophisticated trade. The combination of manufacturing know-how and commercial acumen produced lucrative pottery, glass and silk industries with sales throughout the Eastern Mediterranean. 


Economic power led to military power, which led to ever-increasing cumulative advantage. A strong navy gave Byzantine merchants protection from piracy. Stable power also allowed for the creation of a stable monetary system backed by the good faith and name of the Byzantine Emperor. Systematic laws and the availability of courts guaranteed the enforceability of commercial contracts.


Byzantine treasuries were full, and they plowed this money back into the economy. The state was a freewheeling, free-spending consumer. The government built monumental structures, ports, aqueducts, and supported the Orthodox Church. Its military campaigns provided substantial employment to soldiers, sailors, weapon makers, shipbuilders and fortbuilders. Byzantium grew in no small measure from government expenditure, a policy we would now call Keynesian expansion.


The Byzantine Empire at its height, from the eighth to the tenth century, was remarkably egalitarian. The state went to great lengths to eliminate poverty, to protect workers and to prevent the creation of oligarchs and plutocrats. Wealthy farmers were legally prevented from exploiting the misfortune of their poorer neighbors by acquiring land at “fire sale” prices. Any land sales from poor to rich at “distress” prices would be voided by Byzantine judges without the purchase money going back to the buyer.


Urban merchants and workers were also protected. All goods in Constantinople had to be sold at a fixed margin over cost. With fixed profit margins and no competition, merchants never went out of business.


Working class was protected by welfare, job security and legally mandated wages. The government bought grain in years with good harvests, and sold grain in years of bad harvests keeping the food supply stable. Guilds were strong and supported by the government. They set wage rates and determined who could do what job. Employers were kept weak relative to the guilds by only being allowed to hire workers from one guild. Fixed profits and strong guilds probably led to inefficiency. This type of regulation keeps prices high and productivity low. But at the time, it kept the population of Constantinople economically secure. Standards of living  were essentially maintained by law. For a few centuries, it worked. Remember, a few centuries is a very long time.


Economic growth produced military power, allowing the Byzantines to raise huge armies. Military power also produced economic growth. Part of the financing of the Byzantine empire came through conquest. Wars were speculative profit maximizing endeavors. To be sure, war was expensive. One had to pay soldiers and pay for weaponry, armor, ships and fortifications. But if Byzantium won, it could loot and ravish the conquered territory. The stolen goods were used to pay the soldiers or make grants to the generals. Whatever was left paid the expenses of the imperial treasury and provided a greater tax base for future endeavors.


The actual resources that were conquered were useful. Obtaining land for farming was not that big a deal, since you could just as easily get more land by clearing wilderness. Precious metals, ports and skilled artisans were another matter altogether. Gold and silver mines produced the stuff of money. In the absence of financial notes or other forms of credit, actual hard currency was the only way to increase a nation’s money supply.


Ports were valuable since both Byzantium and its rivals worked under the logic of mercantilism. Whoever controlled a port gave 100% of the trade to their own nationals. Military control of a port opened up whole territories to Byzantines and closed access to everybody else.


Artisans and skilled workers could also be conquered. Acquiring a city with craftsmen was lucrative. Corinth, for example, provided a steady output of silk goods, highly decorated glazed pottery, and glass for both the mass produced and the elite market. (Elite glass was trimmed with gold). Silk goods were expensive, so much so that they were the basis of diplomatic gifts and barter.  The skilled workers who made this stuff could be moved. The Byzantines routinely moved conquered workers with useful skills to cities in the interior of the Empire. This put their manufacturing under safe imperial control and guaranteed the Emperor would get his share of the proceeds.


Using this system, Byzantium prospered mightily, notably between 800 and 1025. But then things began to fall apart. What went wrong?

*  *  *


Not all wars were victories, and not all military campaigns paid for themselves. Previously, the emperor didn’t have to pay nobles to get nobles to fight. He would give the nobles conquered land that was conquered plus whatever they could loot. When Byzantium lost, none of that was possible. Now the emperor had to find some other way to pay for military and governmental expenses. The Byzantine Empire crested and began to fade under the rule of Basil II.


Basil’s innovation was to give the nobles tax relief rather than direct payment. He also got them to fight “for free” by letting them take land from smaller peasants. Social equality had been a key feature of Byzantine society on the upswing. Now the plan was to create nobles with vast estates and regular farmers who would have little.


Promising nobles permanent tax relief mortgaged the future to meet the expenses of the present.  Future wars would have to be financed with a dwindling rather than increasing economic base.


Increasing the size of noble estates increased the power of regional aristocrats. This gave them independent power bases which increased their capacity to hold back resources from future wars – or to try to take over the Empire for themselves. Civil wars and regional uprisings flourished.  A particularly nasty civil war between 1341 and 1354 gutted Byzantium’s military strength and led to gains by the Serbs, the Venetians and the Genoese.


Basil II favored both slavery and discouraging small farmers from becoming independent owners. He intentionally moved farmers from estate to estate to prevent them from developing legal claims on their land. He undid the policy of “no fire sale” land transfers. As land tenure became more and more insecure, the motivations for small holders to invest in capital improvements was reduced. In theory, this could have been counteracted by large farmers investing in improving the productivity of their large estates. While some of this did happen, in general, there were few returns to scale in growing olives, or wheat or raising sheep. Land concentration simply reduced the number of farmers willing to or capable of making agricultural improvements. The increase in slavery reduced local demand for manufactured products. Free-owning farmers had disposable cash income which could be used to purchase the products of local industry. Slaves by definition had no disposable income. The creation of an underclass reduced the capacity of Byzantine nationals to buy Byzantine products.


This made manufacturers increasingly dependent on foreign sales. Because lower tax revenues were reducing Byzantium’s military effectiveness as well, the adverse commercial settlements resulting from Byzantium’s military defeats reduced the export market just as internal poverty was reducing the size of the domestic market. Byzantine artisans and craftsmen faced a market that was at best stagnant, and at worst in steep decline.


Constantinople fell in 1204. Although the city itself was later retaken, the economic functionality of the empire never came back. With reduced tax collection came reduced infrastructure, and reduced capacity to patrol the high seas against piracy. Raids along the border increased. Critical mines were lost to enemy powers.  Money became cheapened, with ever-decreasing amounts of gold and silver content. Weights and measures became non-standard, increasing the amount of commercial fraud.


With military loss came Venetian and Genoan economic dominance. The latest pottery technology involved using alum to make advanced ceramic glazes. But Byzantium's alum mines had fallen into Italian hands. Having lost their alum, the Byzantine potters were out of business. 


The Venetians came to dominate the once great Byzantine glass industry as well. The Venetians banned imports into Venice of finished glass only permitting imports of Byzantine raw material. In contrast, the Venetians were selling thousands of pieces of glassware in the former Byzantium, imports that the Byzantines were helpless to stop. With complete Italian domination of both the popular and the elite glass markets, the Byzantine glass industry practically disappeared.


The Italians banned the import of finished Byzantine silk – and ultimately took over the Byzantine-Greek cities where the silk was made. The Greek textile studios all closed. Local observers despaired of the collapse of traditional Byzantine manufactures. The philosopher George Gemistos Plethon noted

"It is a great evil for a society which produces wool, silk, linen, cotton to be unable to fashion these into garments and instead to wear the clothes fashioned beyond the Ionian sea in wool produced in the Atlantic."

(Laiou and Morrisson, p. 192)


With warfare and economic dislocation came plague. Warfare promoted disease through the presence of festering corpses. Economic dislocation promoted disease by weakening the population through malnutrition. Pestilence was both a literal and an economic kiss of death. Plague concentrated in the cities, where population density and poor sanitation produced mass contagion. Given the absence of antibiotics the only practical response to an epidemic was to evacuate the plague city. Between death and out-migration, the Byzantine cities shrank dramatically.  Constantinople shrank from 400,000 at the end of the tenth century to 50,000 in 1423. With the abandonment of urban settlement came the abandonment of urban occupations, urban skills and urban technology. Of all the trades that had thrived in the Byzantine heyday, only mosaic work and a limited amount of pottery survived. Some vestiges of commerce survived. Some locals allied with the Venetians or the Genoans, representing those interests in Turkey or abroad. Italy was willing to purchase a few Byzantine raw materials such as foodstuffs and dyes.


While Constantinople did not disappear entirely, Byzantium did. The egalitarian society, the mass literacy, the high standards of living, and the local arts and sciences disappeared. The region was conquered politically by the Ottomans; economically, by the Italians.  Byzantium went from being a center of power, wealth and culture, to a subordinate outpost of an Atlantic economy. Much of its fall was of its own making.


For More Information

Laiou, Angeleki and Cecile Morrisson, Byzantine Economy. New York, Cambridge, 2007 for the intellectual interpretation and basic historical facts presented here.

I differ from Laiou and Morrisson in placing greater emphasis than they do on the Keynesian benefits of social equality and government expenditure.

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