What Were the Financial Benefits of the Crusades
Of all the events, inventions, and personalities that defined the European Middle Ages, none did more so than the Crusades. Beginning in the late eleventh century, the many kingdoms of western Europe awoke from their collective slumber to assert their power and place in the world by engaging in a series of religious wars in the Middle East, Spain, southern France, and the Baltic region. The strategic and tactical benefits of the Crusades were nominal at best for the Europeans: Jerusalem, the primary objective of the Crusaders, was taken during the First Crusade but later lost to the Muslims, never to be in Christian hands again.
Although the Crusaders may not have been able to keep their primary target, they were able to drive the Muslims from Spain and brought Christianity to the eastern Baltic region. The Crusades also helped to elevate the standing of the Roman Catholic Church and the western European kingdoms in the eyes of the Islamic and Orthodox Christian worlds – the Muslims and Orthodox Christians may not have liked the western Christians, but they learned to respect them and deal with them as equals. The Crusaders also brought back new knowledge of the world, in the form of math, science, and maps of the previously unknown when they returned to western Europe. Indeed, the Crusades benefited western Europe in many different ways but often overlooked are the economic benefits that the wars brought to Europe.
The Crusades allowed Europeans who would have previously been unable to own land to acquire lucrative estates in the Middle East. Europeans from all classes of society found ways to profit from the holy wars, and as a result, new banking methods were developed by the Order of the Knights Templar. But perhaps the Europeans who benefited the most economically from the Crusades were the Italian city-states, especially Venice, Pisa, and Genoa. As a result of the Crusades, the Italian merchant warriors were able to develop long-distance trade routes with the Near East, which led to the development of the Italian republics and helped spur the Renaissance.
The Background of the Crusades
Today, the true history of the Crusades is often distorted by religious and political rhetoric that does no justice to the period or the people who fought in the wars. Simply put, the Crusades were a series of nine military campaigns conducted by Europeans and officially sanctioned by the Roman Catholic Church to take control of Jerusalem. Modern scholars often include several smaller, non-official, religious wars in Spain and the Baltic region, as well as the “Albigensian Crusade” in southern France as part of the Crusades since they were religiously motivated. The term is derived from the Latin word crucesignati, which means “those who sign the cross.” 
There was not any one single event that led to the Crusades, but it was instead the result of a civilization clash between the Islamic, Orthodox Christian, and Western Christian worlds. In the three centuries before the Crusades began, Islam had gained ascendency in the Near East and northern Africa through a series of wars and military campaigns. The concept of jihad or holy war was a central part of the growth of Islam and a fundamental tenet in its first few centuries of life.
According to jihadists, the kingdoms that upheld Islamic teachings were part of the dar al-Islam or “House of Islam,” while those that did not recognize Islamic law were part of the dar al-Harb or “House of War.” As the name implies, the House of War was such because it was acceptable for Muslim caliphs to wage war on the unbelievers. This principle was put into practice throughout Islam’s initial surge under the Umayyad caliphate, but first came into contact with European Christendom when the Muslim Moors from North Africa invaded Spain in the eight century.
Islam’s march north into the House of War of Europe was checked by the Carolingian French, who were led by Charles Martel in 732. Although western Europeans put a halt to Islam’s expansion into the West in Spain, nearly three centuries later the Seljuk Turks began a series of military campaigns against the Orthodox Christian Byzantine Empire in Anatolia (modern day Turkey), which ended in disaster for the Christians at the Battle of Manzikert in 1071.  As Islam marched and appeared to be encircling the Christian world in a pincer movement, the leaders of Christendom met in desperation.
Although the Roman and Greek churches officially split in the Schism of 1095, they retained friendly relations for the most part and continued to view each other as brothers in Christ. The Roman Catholic Church and its followers in western Europe did not threaten the lands held by the Byzantine Empire and the two churches did not compete for souls. On the other hand, the emperors of the Byzantine Empire were happy to work with the Muslims on the fringes of their kingdom and counted many Muslims among their subjects. Western Europeans, for the most part, viewed the Middle East’s importance from the perspective as the place where Christ lived and died and did not care about who controlled the region, as long as they were free to visit as pilgrims.
Everything changed for both halves of the Christian world by the late eleventh century. The Arab Muslims, who had an agreement with the Byzantine Empire not to encroach on their territory and with Christians, in general, to allow pilgrims to visit shrines in Palestine, were replaced by the Seljuk Turks, who were much more militant in their religious beliefs. The Turks ended the safety of Christian pilgrimages, destroyed some churches, and began encroaching on Byzantine territory, culminating in the Battle of Manzikert. It was at this point when the Byzantine Emperor Alexius I Comnenos (ruled 1081-1118) appealed to the Roman Catholic Pope Urban II (1088-1099) for aid against the Turkish Islamic threat. 
The appeal from Byzantium led to Urban II calling the Council of Claremont in France, where he called for the First Crusade on November 27, 1095. The immediate goals were to help the Byzantine Empire reclaim lost land, capture the Holy Sepulcher where Christians believe Jesus was buried, and to open the land routes between Europe and the Middle East once more for Christian pilgrims. Over 100,000 people answered the call for the First Crusade, which included men and women from all classes of European society. Most of the fighting men were from what is now France and Normandy, but there were also a sizable amount of Germans, English, Hungarians, and Scandinavians who answered the call. 
A Chance for Glory and Wealth
Embarking on the Crusades could be a very costly endeavor, especially for the knights who were expected to pay for the campaigns out of their own pockets, so there needed to be potential for great reward to entice so many people. Of course, at the top of the list of benefits was the Church’s absolution of all sins to those who died on a Crusade, but more mundane benefits also attracted numerous Christian fighters. Since crusading could be quite expensive, knights often went into debt in order fund their own armies. For many of these knights, the Church absolved all debts by crusaders, even debt incurred before the Crusades. 
The Crusaders’ first major stop was the Byzantine capital of Constantinople, where the leaders planned to formulate a long-term strategy and to stock up on provisions for their final push into the Holy Land. The various western European counts were astonished by the grandeur and wealth of the city, which was reinforced when Alexius I promised to make the Crusaders wealthy beyond their dreams if they could help him reclaim his lost land from the Muslims. According to Alexius I’s biographer and daughter, Anna Comnena, the Crusaders were genuinely impressed.
“Alexius set aside a room in the palace precincts and had the floor covered with all kinds of wealth: clothes, gold and silver coins, objects of lesser value filled the place so completely that it was impossible for anyone to walk in it. He ordered the man deputed to show Bohemond these riches to open the doors suddenly. Bohemond was amazed at the sight. ‘If I had such wealth,’ he said, ‘I would long ago have become master of many lands.’” 
After the Norman knight Bohemond viewed Alexius I’s ostentatious display of wealth, he began plotting how to acquire similar riches, to the detriment of Alexius I if necessary. Bohemond, Raymond of Toulouse, and the other European counts next led the vast Christian host through Seljuk territory until they arrived in the Levant. It was there that the crusaders first learned that the Middle East was perhaps as wealthy as Byzantium.
Many Muslim emirs were willing to pay the mercenary crusaders to leave their cities untouched, but ultimately the Christians conquered the entire Levant, including Jerusalem, and then divided the lands to reflect the feudal structure of western Europe. Although Bohemond and the other counts were supposed to give the lands back to Alexius I, the new acquisitions were just too tempting for the western Europeans, many of whom had titles in name only for lands back home. In unison, the crusaders all stated that Alexius I repudiated his oath to assist the crusaders when he failed to relieve the siege of Antioch. With that argument, the Crusaders took control of the region, and there was nothing Alexius I could do about it. 
A New Economic Order in the Levant
When the First Crusade was successfully completed by the Europeans in 1099 with the taking of Jerusalem, the counts imposed a new political and social order on the region. The counts established their rule in the image of western Europe by creating the following four kingdoms: the Kingdom of Jerusalem, the County of Edessa, the County of Tripoli, and the Principality of Antioch.
Of course, Jerusalem was the most important of these and ruled by Baldwin I (1100-1118), but nearly important was Bohemond I’s (1098-1111) Principality of Antioch. Bohemond I and the other European counts were finally able to possess some of the wealth they coveted since they were shown the riches of Alexius I in Constantinople, but they had to do so through a feudal system they imported to the region.
While they were held by the Europeans, the lands in the Levant proved to be quite lucrative and although the feudal structure was essentially European in nature, the counts learned that there were some fundamental differences. Muslims were not only allowed to continue to practice their religion, they were also taxed at the same rate as Christians.  The low number of European nobles in the Holy Land also meant that the counts had to adapt new laws of inheritance. In the crusader kingdoms, women were allowed to inherit land, which was practically unheard of in Europe. 
As the counts benefitted financially from the new lands they acquired in the Levant, other people of less noble birth also benefited during the crusades. Thousands of artisans found the holy wars to be an economic boon for their businesses as blacksmiths, cooks, and even prostitutes were in high demand. Some members of the religious orders that fought in the battles and cared for the wounded also profited from the Crusades.
In particular, the often talked about but usually misunderstood order known as the Poor Fellow-Soldiers of Christ and the Temple of Solomon, or simply the Knights Templar showed an especially high business acumen during the Crusades. The Knights Templar received a Rule and papal recognition between the First and Second Crusades in 1128. Immediately after receiving Church sanction, the Templars set about building a series of churches in Europe and the Middle East that resembled the Holy Sepulcher in Jerusalem. The churches were used to house members of the order, to care for the sick, and to provide safe waystations to pilgrims going to and from the Holy Land. 
In addition to martial and spiritual functions, the Templars’ churches also served as banks. Pilgrims and crusaders headed to the Middle East could deposit money in a Templar church in Europe, receive a deposit slip, and then withdraw their money from a Templar church in the Levant minus a small service charge. The process allowed the Templars to attain wealth without having to pillage for it and since they did not charge interest, they avoided the charge of usury from the Church.  The Knights Templar and the European counts who conquered and inherited land in the Middle East truly profited from the Crusades, but perhaps the biggest winners financially speaking were the Italian city-states.
The Role of of the Italian City States in the Crusades
During the Crusades, the three most powerful Italian city-states were Venice, Pisa, and Genoa. The men from these cities proved to be both able warriors and businessmen, but it was their activities in finance during the Crusades that made them among the most powerful people in Europe. The Italians helped finance many of the European counts’ armies and in the process developed new financing techniques that were used throughout the Middle Ages and into the Renaissance. The commenda was a technique whereby an investor provided all of the capital needed for a campaign in return received three fourths of the profits.
Another Italian financing technique was known as societas maris, which is where an investor provided two-thirds of the capital for the campaign and received half of the profits.  The Italian merchant crusaders developed relations with Muslims and Jews in the Holy Land and as a result were able to establish long-distant trade routes that lasted well into the modern era. By the end of the Crusades, the Italians had a monopoly over trade in the Holy Land among Europeans, which led to conflict between the three primary city-states of Venice, Pisa, and Genoa. Venice won the conflict and established itself as the premier Italian-city state well into the early stages of the Renaissance. 
The Crusades were a series of holy wars where hundreds of thousands of Europeans fought for control of Jerusalem. Although the Crusades were conducted for religious reasons, many Europeans benefited financially as a result. Many knights were able to have their debts absolved by the Church while others acquired new lands in the Levant. Aside from the nobles, many Europeans of all classes were able to profit by selling their much needed skills and wares to the crusader armies. New forms of banking allowed the Knights Templar to rise from an obscure religious order to a wealthy brotherhood of knights. Finally, the warrior merchants of Italy probably benefitted the most financially from the Crusades as they were able to establish trade monopolies and long-distance merchant routes that ultimately helped kick-start the Renaissance.
- Madden, Thomas F. The New Concise History of the Crusades. Updated Edition. (New York: Roman and Littlefield, 2005), pg. 2
- Madden, pgs. 4-5
- Madden p. 8
- Madden, p. 9
- Heston, Alan. “Crusades and Jihads: A Long-Run Perspective.” Annals of the American Academy of Political and Social Science 53 (2003) p. 117
- Comnena, Anna. The Alexiad. Translated by E.R.A. Sewter. (London: Penguin, 2009), Book 10, xi
- Madden, p. 37
- Heston, p. 119
- Morris, Rosemary. “Northern Europe Invades the Mediterranean, 900-1200.” In The Oxford History of Medieval Europe. Edited by George Holmes. (Oxford: Oxford University Press, 2001), p. 209
- Madden, p. 48
- Madden, p. 49
- Morris, p. 215
- Heston, p. 121
Updated January 3, 2018.