When trying to conjure up an image of an accountant in historic time, it’s Mr Cratchit, the father of Tiny Tim in Dickens’ A Christmas Carol, that comes to mind. There he is, leaning over his desk, with his shirt covered by protective half-sleeves in black. With a ruler he draws up nearly invisible lines in his ledger before using ink and pen to carefully enter each transaction. As Mr Cratchit was around long after the invention of double book-keeping, each entry is of course made twice (and so as not to risk losing my audience, I will not explain the intricacies of accounting in detail).
It very often was – wrong, I mean. Even today, when most accounting is done through fancy ERP systems, things end up being incorrect, which is why one needs that age-old profession – the accountant – to begin with.
So why this Italian interest in accounting? Well, it all comes down to banks. Banking is another very ancient profession – already in Mesopotamia there were “lending houses”, well-run businesses that made money out of money – or rather, someone else’s lack of money. These banks became increasingly more sophisticated, the Greek did their banking thing, the Romans did theirs, and then along came the Christian Church and banking went belly-up, overnight, almost.
|Christ driving out the usurers|
|Medieval Jews had to wear these hats|
Some generations down the line, mighty Edward I financed his martial activity by taxing “his” Jews more or less to death. The Jews were the king’s personal property (!), and once he had wrung them dry of money, Edward used them for political purposes. Ultimately, in 1290 the Jews were expulsed from England – as was happening throughout northern Europe.
While monarchs everywhere could congratulate each other on having rid their countries of the Jews, they were also faced with a long-term financing issue. Yes, ousting the Jews did wonders for their balance sheets in the short term (they appropriated all the assets the Jews couldn’t take with them, which was often most of their estate), but as the prohibition against usury still stood, there was no one to fill the Jewish moneylenders’ shoes.
The Italian banks became a force to be reckoned with throughout Europe. Kings, noblemen, merchants – they all lined up, cap in hand, eager to tap into this new source of money. Over time, the prohibition against usury was watered down – various Popes, eager for money, helped. Families such as the Bardi, the Mozzi, the Peruzzi and the Medici became synonym with banking, amassing not only wealth but power.
To add a British angle, there arose in England a banking system handled by the goldsmiths. Rich in ready cash, the goldsmiths acted as middle-men between those that had (depositing large amounts of gold and jewels with the goldsmiths for safekeeping) and those that wanted. A new-fangled financial instrument, the promissory note, saw the light of the day. These notes were to a fixed value and were signed by the debtor and the creditor. The note could be sold, passed on in lieu of payment, and so paper money was born.
Today, eight hundred years later, this system is still in use. What those long dead Italians invented, is what rules the world of Finance today, testament to just how excellent the system is. It has the further upside – from an accountant’s perspective – of being rather complex, ensuring that this, the oldest profession in the world, has a bright and lucrative future. But it is also that complexity which ensures most businesses adhere to the straight and narrow – being too creative in a double-entry book-keeping system has a nasty tendency to come back and bite you. Hard. Smart guys, those Italians…
And as to the Jews who brought their acumen to the nascent banking trade, many of them managed to hang on to an existence in Italy. In difference to other European states, the various Italian states never formally expelled their Jewish compatriots - at least not at the same time. Yet again: smart guys, those Italians...
A Rip in the Veil, Like Chaff in the Wind, The Prodigal Son and her latest release, A Newfound Land. Set in seventeenth century Scotland and Virginia/Maryland, the books tell the story of Matthew and Alex, two people who should never have met - not when she was born three hundred years after him.
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