Usury and public debt in early Renaissance Florence

"Money, politics and law were intimately linked in the merchant republics of medieval and Renaissance Italy. Nowhere was this more evident than in the realm of public finance. Beginning in the twelfth century, governments borrowed money from citizens to meet expenses that exceeded ordinary revenues; by 1350, most had converted their outstanding debts into permanent funds serviced by consumption taxes and levies on subject territories. Loans were usually compulsory, but ruling classes preferred them to taxes: not only did loans pay a return in the form of interest, but they could also be sold to recoup part of the lender's capital." "Despite the blessing of elites, deficit financing was highly controversial. In Florence, the creation of the funded debt was associated with social upheaval and remained a factor in political struggles for over a century. Debts in Florence and elsewhere also raised legal and moral questions that became the focus of growing controversy in the later Middle Ages. Lawyers and theologians rarely questioned the reliance of governments on debt, but many considered the payment of interest to government creditors a violation of the ban on usuary, which law and t