What the Renaissance Taught Me About Leverage

The Medici Bank collapsed in 1494, taking with it the financial empire that had underwritten the Renaissance for over a century. The immediate cause was prosaic enough - bad loans to English kings, overextension in Bruges, and the chaos of the Italian Wars had finally overwhelmed even the Medici's sophisticated risk management.

Lorenzo de' Medici, the Magnificent, had died two years earlier at forty-three. He left behind debts of 74,000 florins, a sum that would have bankrupted most European principalities; and a cultural legacy that would define Western civilization for centuries.

Between 1397 and 1494, the Medici bank financed kings, popes, and merchants across Europe, but their most consequential investments were of a different nature: thousands of florins for manuscripts, modest rooms where scholars could gather and debate, stipends for artists who might never sell a painting.

The Medici had started as wool merchants in thirteenth-century Florence, one family among many in a city that barely registered on maps of European power. By Lorenzo's death, they had become de facto rulers of Florence, cultural leaders of Europe, patrons to Michelangelo and Botticelli, and architects of a cultural movement that would spread from Italy to transform how humans thought about art, science, politics, and themselves.

The Medici weren't conquerors. They didn't possess Europe's largest fortune - the Fuggers of Augsburg were wealthier, the Venetians controlled more trade routes. Instead, the Medici had discovered something far more powerful: how to use strategic positioning, resource multiplication, and network effects to amplify individual efforts into civilizational transformation.