Byzantine Economy and Trade

The economy of the Byzantine Empire was the most developed in the early medieval Mediterranean. From the foundation of Constantinople in 330 to the territorial losses of the seventh century, the empire drew grain from Egypt, wine and olive oil from Syria and Anatolia, silk from China via Persia, and soldiers from the Balkans and the Caucasus. The capital city, possibly home to half a million people in the sixth century, was the commercial hub of the known world; the empire’s gold solidus was the most reliable currency in the medieval world; and Byzantine manufactured goods, especially silks, glass, and metalwork, were prized from Anglo-Saxon England to the court of the Tang Chinese emperor.

This article forms part of the broader survey of the Byzantine Empire and links to related treatments of the reign of Justinian, Byzantine government and administration, and Byzantine religion and the Orthodox Church. The role of trade in shaping early medieval Europe as a whole is also addressed in the broader article on the post-Roman geography of Europe.

The Late Roman Inheritance

The Byzantine economy inherited the mature, monetized, urbanized economy of the late Roman Empire. The eastern provinces — Egypt, Syria, Asia Minor, the Balkans — had long been the most prosperous parts of the Mediterranean world, and the late Roman state had built a tax system, a transportation network, and a market economy of a sophistication unmatched in early medieval Europe. Cities such as Antioch, Alexandria, and Ephesus had populations in the hundreds of thousands and were centers of long-distance trade, craft production, and intellectual life. The annual grain dole of Constantinople, which fed perhaps 80,000 citizens in the sixth century, required the state to manage the Egyptian grain harvest, the shipping of grain across the Mediterranean, and the storage and distribution of grain in the capital’s porticoes.

The tax system of the late Roman Empire was, by medieval standards, exceptionally elaborate. The capitatio and iugatio, a combined tax on persons and on land, was assessed every five years by imperial officials and collected by local tax farmers. The annona, the grain tax, supported the army and the capital. Customs duties, port dues, and excise taxes produced additional revenue. The coins in which these taxes were paid were the gold solidus (a stable, high-purity coin weighing about 4.5 grams), the silver siliqua and miliarense, and a range of bronze coinage. The solidus in particular circulated widely, and its imitations or derivative issues were used from Anglo-Saxon England to the caliphate of Córdoba.

The economic geography of the empire in the late fifth and early sixth centuries is described in post-Roman geography of Europe. The eastern empire’s prosperity in this period stands in striking contrast to the ruralization and monetization crisis of the Latin west.

Silk and the Eastern Trade

Silk was the most valuable commodity of the late antique Mediterranean, and the control of silk was both an economic and a political question. Before the sixth century, raw silk reached the Mediterranean only by the long overland route from China through Central Asia and the Sassanid Persian Empire, and the Persians controlled access to the source. The Sassanid kings used the silk monopoly as a diplomatic tool, raising and lowering the price at will. Justinian’s famous acquisition of silkworm eggs, smuggled from Central Asia in the 550s by two Nestorian monks (and a few sticks of bamboo, by tradition), allowed the empire to produce its own silk and to break the Persian monopoly.

The imperial silk factories (gynaecia), supervised by the Comes Sacrarum Largitionum and later by imperial euthyniarii, became a major source of revenue. Silks were produced in state workshops in Constantinople, in Thebes, in Antioch, in Corinth, and later in the Peloponnese, and they were exported throughout the known world. The imperial purple dye, produced from murex snails harvested along the coasts of the eastern Mediterranean, was reserved for the imperial family; the production was a state monopoly, and the export of purple cloth was severely restricted. By the tenth century, however, the production of silks for the imperial wardrobe and the imperial gifts had become an industry in itself, with imperial workshops, master weavers, and elaborate designs.

The broader eastern trade brought the empire into contact with China, Central Asia, and the steppe peoples. The Silk Road, with its several branches, linked Constantinople indirectly to the Tang and Song empires through the intermediary trading cities of Central Asia, and Byzantine silks have been found in tombs in southern Siberia and western China. The diplomatic relations between Byzantium and the Tang, mediated by Sogdian merchants, are some of the great examples of early medieval long-distance trade. The relations between Byzantium and the various peoples of the steppe, the Khazars, the Pechenegs, the Cumans, and later the Rus’, were managed in part by the lure of imperial gold.

The Seventh-Century Crisis

The Arab conquests of the seventh century transformed the Byzantine economy. The loss of Egypt, Syria, North Africa, and the Mediterranean islands stripped the empire of its richest provinces, eliminated the grain of Alexandria, and made Mediterranean trade vastly more difficult. Constantinople was, in the eighth century, a much smaller and poorer city than it had been two centuries before, and the state was repeatedly on the verge of bankruptcy. The new theme system, examined in the Byzantine government and administration, shifted the economic base of the empire to the Anatolian themes, where soldier-farmers cultivated the land in exchange for military service.

The economy adapted. The grain of Egypt was replaced by grain from Anatolia, Thrace, and the Crimea. The trade of the eastern Mediterranean shifted to new centers — Damascus, Baghdad, Alexandria under the Caliphate — and the empire developed new trading partnerships with the Slavic Balkans, the Italian maritime cities (Venice, Amalfi, Naples), and the Umayyad and Abbasid caliphates. Constantinople, even in its reduced state, remained a major commercial city; the Persians, the Avars, and the Rus’ all besieged it in part because the city was so rich.

The Iconoclast Centuries and the Macedonian Recovery

The iconoclast period (726–843) saw the further contraction of the Byzantine economy and the loss of the surviving Byzantine holdings in the western Mediterranean, including Ravenna in 751 and parts of southern Italy. The Macedonian dynasty, beginning in 867, presided over a long economic recovery. Population grew, Anatolian cities were rebuilt, and new themes were created on the recovered frontier. The Macedonian emperors presided over a vigorous commercial expansion: new coinage (the histamenon of Constantine IX and the hyperpyron of Nicephorus II and Basil II) replaced the older gold issues; new trade routes with the Caliphate, the Slavic Balkans, and Kyivan Rus’ brought new wealth to Constantinople.

The reign of Basil II in particular saw a fiscal and military recovery that allowed the emperor to crush the Bulgarian Empire and to extend Byzantine authority across the Balkans. The hyperpyron of his reign became one of the most stable gold coins in the medieval world, and the financial system of his reign is sometimes considered the high point of medieval Byzantine fiscal administration. The Macedonian economy was, however, also characterized by the increasing concentration of land in the hands of a few powerful families, a process that the empire’s later centuries would never fully reverse.

Agriculture, Industry, and the Cities

The economic base of Byzantium was, throughout its history, agriculture. The Anatolian themes produced wheat, barley, wine, and olive oil; the Balkans produced wheat, wine, and pastoral products; the Aegean islands produced wine and olive oil. The state depended on agricultural production both for the tax revenues that supported the army and for the food supply of the capital. The Macedonian emperors, especially Basil II, attempted to limit the accumulation of land in the hands of monasteries and powerful aristocrats, with mixed results.

Manufacturing in the Byzantine Empire was concentrated in the cities. Constantinople, Antioch (until its loss), Thessalonica, Corinth, and Thebes were major centers of silk, glass, metalwork, ceramic, and manuscript production. The state regulated industries in which it had a particular interest (silk, purple dye, mints, arsenals), but the rest of the economy was in private hands. The guilds of Constantinople, mentioned in the Book of the Prefect, an early tenth-century commercial regulation issued by Leo VI, were well-organized institutions that participated in the commercial life of the city.

Trade with the Caliphate and the East

Throughout the Umayyad and Abbasid periods, the Byzantine Empire traded extensively with the Caliphate. The two great powers exchanged envoys, gifts, and prisoners; their merchants traded silk, glass, ceramics, gold, and slaves; and the frontier was crossed, at least in times of peace, by caravans of merchants and by diplomatic missions. The Caliphate of Córdoba, the Fatimids of Egypt, and the various Turkish dynasties of the Islamic east were all involved in Mediterranean trade. The Byzantines were not always able to protect their merchants from Muslim pirates and corsairs, but the commercial relationship was a real and important part of the medieval Mediterranean economy.

Trade with Italy and the West

The trade between Byzantium and the Italian maritime republics of Venice, Amalfi, Naples, and (later) Genoa and Pisa was one of the most important economic relationships of the early Middle Ages. The Italian cities provided the Byzantine Empire with naval support, especially against the Arabs, and in exchange they were granted commercial privileges in Constantinople. The Venetians had a fondaco, a trading quarter, in Constantinople from the late tenth century; the Amalfitans and the Genoese had similar privileges. The relationship was, in the long run, the source of increasing political tension, but in the early Middle Ages it was, on balance, profitable to both sides.

Trade with the Slavic and Norse Worlds

The Byzantines also traded extensively with the Slavic Balkans, with Bulgaria, with Kyivan Rus’, and with the Norse peoples of the Baltic. The great Rus’–Byzantine treaties of 907 and 911 regulated the commercial and legal relationship between the two powers; the famous account of the Russian Primary Chronicle records that the Rus’ merchants who visited Constantinople were housed at the monastery of St. Mamas, fed at imperial expense for six months, and provided with baths and supplies. The commercial ties between Constantinople and Kyivan Rus’ were supplemented by religious ties, and the conversion of the Rus’ in 988 brought Rus’ merchants, pilgrims, and students into the orbit of Byzantine civilization.

The Slow Decline

The Macedonian recovery, which lasted into the eleventh century, gradually gave way to a long economic decline. The defeat at Manzikert in 1071, the loss of Anatolia to the Seljuk Turks, the corruption of the later Comnenian and Angeloi dynasties, and finally the sack of Constantinople by the Fourth Crusade in 1204 all damaged the Byzantine economy. But the empire’s economic life was, throughout the early Middle Ages, the most developed in Europe, and its gold coin was the standard of value for centuries.