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Mission Accomplished.

Venice Grand Canal

June 13, 2012
New York City

In Medieval Europe when most people were living short, brutish lives wallowing in muddy serfdom, there was one city that served as a shining economic beacon for the rest of the continent: Venice.

At the time, Venice was one of the richest places in the known world, underpinned by its dominance in trade and the upward mobility of its citizens.

The concept of what we know today as “America” was alive and well in Venice during the Middle Ages; Venice was a place where, with guts, hard work, and a little bit of luck, you could become very wealthy and live the Venetian Dream.

The modern Limited Partnership structure, in fact, is derived from an early Venetian model called the ‘commenda’, a sort of special purpose vehicle for trade missions.

A standard commenda involved young entrepreneurs with a lot of energy but no capital partnering with older veterans with a lot of capital but no energy. The old guys would finance a trade mission to Asia, and the young guy would head off to foreign lands to make money.

If/when he returned, they would split the profits, the young guy receiving 25% to 50%.

A lot of people became very wealthy through this model, and even the poorest serf could come to Venice and rise up in social and financial status.

As you could imagine, though, they managed to find a way to screw it up.

In the early 1300s, the ruling elite eliminated the commenda structure that had made so many people so much money. Shortly afterward, the state started charging exorbitant taxes to merchants and nationalizing trade.

A police force was introduced in 1310 for the first time ever… not to protect the people from criminals, but to protect the criminals (government) from the people.

It didn’t take long for Venice to decline into insignificance. Any opportunities to create wealth and live prosperously vanished as Venetian politicians engaged in the wholesale destruction of their economy, the livelihoods of its participants, and the ‘Venetian Dream.’

With 20/20 hindsight, we can look back upon medieval Venice and pinpoint the early 1300s as the turning point to rapid decline… when there was a great unraveling of economic foundations and personal freedom.

It certainly makes one wonder whether future historians will look back upon this period in Western civilization and draw the same conclusion.

While I’m no fan of economist Joseph Stiglitz or the neo-Keynesian ideals he espouses, his new book proves this point more than just about any other recent work.

In ‘The Price of Inequality’, Stiglitz provides copious data showing that individuals in the United States now have a lower likelihood of moving up in social/financial status than any other developed country in the world.

This fact is reinforced by the Federal Reserve’s most recent Survey on Consumer Finances, which showed that median US household net worth fell nearly 40% from 2007 to 2010.

This is the natural effect when you base an entire system on the whims of a very small elite that has awarded itself the ability to spend recklessly, rack up unsustainable levels of debt, and conjure money out of thin air.

As in Venice before them, US politicians have been engaging in the wholesale destruction of their economy, the livelihoods of its participants, and the American Dream.

Mission accomplished.

Our goal is simple: To help you achieve personal liberty and financial prosperity no matter what happens.

If you liked this post, please click the box below. You can watch a compelling video you’ll find very interesting.

Will you be prepared when everything we take for granted changes overnight?

Just think about this for a couple of minutes. What if the U.S. Dollar wasn’t the world’s reserve currency? Ponder that… what if…

Empires Rise, they peak, they decline, they collapse, this is the cycle of history.

This historical pattern has formed and is already underway in many parts of the world, including the United States.

Don’t be one of the millions of people who gets their savings, retirement, and investments wiped out.

Click the button below to watch the video.

About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

Comments on this entry are closed.

  • http://www.facebook.com/people/Christopher-Neal-Wyatt/1104489568 Christopher Neal Wyatt

    As Venice was the center of the European economy, the destruction from within of it’s economic model led not only to it’s own fall, but very nearly to that of all of Europe.

    Flush with unprecedented wealth during the 13th Century, Venice’s greatest merchants began purchasing large tracts of European farmland. These merchants then allowed their land to lay fallow, in an attempt to corner the market, and raise the value of their own produce.

    The resulting food shortages eventually led to widespread famine- and ultimately the rise of the Black Plague, which decimated as much as 60% of Europe’s population.


  • Use critical thinking skills

    It’s always nice to oversimplify.  Oh and to ignore other facts.  To blame Venice’s decline ONLY on internal policies would be more than a little shortsighted or one-sided.  It might be important to mention that Venice’s overseas wars cost it dearly (maybe also applicable to the current U.S. example).  It might also be wise to mention that Venice’s advantage in overland trade with the East was circumvented by Portuguese ships that found a way to sail to the East around Africa, and that the rapid expansion of trade by sea (and not overland) drastically cut into the lifeline of Venice’s trade. Oh and don’t forget that far stronger military powers Spain and France fought for dominance of the entire Italian peninsula in the same time period.  Oh and don’t bother to mention that the plague devastated Venice’s population… TWICE…  Does Simon Black suggest that none of those developments had any sway on Venice’s demise?  No, let’s blame it all on raising taxes and paying for a police force.  Did you notice a lack of citations in the article?  That’s because it’s presenting half-truths and exaggerations.

    This entire website contains of a pattern of exaggerated misinformation designed to scare you and then look into what the site constantly suggests, buy precious metals, open overseas accounts, and buy property or invest in places that are far less stable or investor friendly than the United States.  

    Think about it.

    • Info

       Typical Liberal Leftist (aka: communist) response to the truth

      • Jammer

        at least he provided some information, “info.” Empty knee-jerk retorts make you sound foolish and ignorant.

      • Use critical thinking skills

        Please explain how pointing out truthful information that is significant historical facts that the original author ignored with the purpose of misleading you…. is a “typical Liberal Leftist (aka: communist) response to the truth.”  
        That statement makes little sense.  Read some history.

    • li_bri

      You’ll be staying behind, then. That’s good because there aren’t enough lifeboats.

      • Use critical thinking skills

        I’m sorry, does your reply have anything to do with explaining why Black left out significant, major facts about the history of Venice in an obvious ploy to misinform you?  

    • http://disqus.com/dashboard/#account Dennis Paul Habern

      If citical thinking is globaly, so important, why did American voters vote for this

      unknown wanta-be Moron, that currently resides in the White House, but not for

      long, and secondly, why was this Moron not properly vetted in accordance with

      the duties prescribed by law, for the U.S. Senate to follow. This Moron was

      given an illegal pass, and therefore, the culprits in the Senate at the time, need

      to be investigated to identify whether or not, George Soros, the traitorous

      Hungarian/American influenced and intimated any senator with his monetary

      power. Nobody talks about how this other Moron, Soros, is permitted to

      influence other countries so that this traitor can continue to place his personal

      vendetta of ruining countries with his payoffs. The Moron that currently resides

      in the White House has certainly paid-off to play ball with the world’s billionaires

      or suffer the same fate at JFK, if you follow. The Bilderberger Group at work.

      Money talks in MOST cases in politics, but so do our military in ALL cases.

      Myself and 99% of Americans are tired of being held hostage by the so called

      elite in Washington, D.C. and in addition, the radical Muslims. How is the United

      States going to retaliate against these two entities if we are to remain free.

      Examples must be made to teach the perpetrators a hard lesson.

      • Use critical thinking skills

        While I fully understand why many Americans are frustrated with the President or the current state of American politics and its economy, and I fully support anyone’s right to consider the president a “moron”… I’m not sure how your reply addresses that the original author of this article completely misconstrued the history of Venice.  That was the main point of my reply and to suggest that most of the information on the site is in fact misinformation designed to scare you.  

        Again, I agree that there are legit reasons to be concerned in America.  But that is not an excuse to deliberately ignore or misconstrue facts, whether those facts are about the history of Venice or about current politics or economics.

    • James Bilezikian

      the point that can not be overstated is that when liberty abounds, challenges, new technology, new discoveries become a normal issue of cultural life.  when Venice was challenged by the above listed history, her ability to respond to the challenge was curtailed sharply when the creativity and energy of its citizenry was no longer of primary concern.  compare hong kong with venice.  hong kong was desperately poor half a century ago.  they employed free market policies, low taxation, rule of law, and inviolability of contract, and they are among the richest in the world, and with no natural resources of a mineral kind.  the greatest natural resource that any polity can have is the creative energy of its citizenry.  unleash that and almost any storm/challenge can be met.  Liberty wedded to the rule of law first and prosperity follows

      • Use critical thinking skills

        Thanks for a thoughtful reply.  
        I still judge the original article to be misinformation with the purpose of scaring its readers… However you have made a strong and valid point.

        I agree completely with the concept of unleashing human ingenuity and energy through liberty and the rule of law.  I would caution that those who vilify taxes as something along the lines as ‘the source of all evil,’ should look for more facts.  The quality of a state’s management and the political culture matter significantly in its success as well.  Some countries have high tax rates (including corporate tax rates) that are higher than the United States.  Denmark is one example.  They are free, they have a heavy state involvement in the economy, and they have high taxes.  They are but one example of a country with significant government regulation and intervention in the economy, and Danes have not lost their freedoms they way that we are being told to fear.  

        I would dare to say that there is not a country on the planet where it is possible to maintain liberty and the rule of law, without some kind of tax/revenue structure for that country’s government.  However, there are some that have no effective taxes, but also no rule of law… Somalia would be an example.  

        So as a caution, we should be critical and even suspect of new regulations, or state intervention in the economy, etc.  Because we want to be sure that we maintain liberty within the rule of law.  But we should not be running scared from the idea that big government equals a government that eliminates liberty  (it’s not a ‘rule’,,, Denmark is but one example that disproves this.)  Or that new regulations or reforms mean the end of freedom.  We should not be debating these things in such apocalyptic terms.  We should be debated them in terms of their practicality, or utility, without wild-eyed, irrational fear based on bad assumptions.

        I would also caution those interested in following Black’s advice that his ideas of where to invest or gain a second citizenship are not so helpful, and when you consider the way he wildly misinforms in this or other posts, you should probably also question his motivation about advising places like Chile so strongly.  That is a bit suspect.

  • USMCFreedom55

    Simon. Great Article! I have learned so much from your articles and also from seeing how much the news is parroting what the uncle sam says. Any thoughts on making an article on the best books to read that emphasize freedom?. Also how about an article on the best ways to protect yourself on the internet from hostile parties. I use an anon search engine but would like more ways to protect myself. Thanks!

  • JohnD

    Let’s not forget that the “very small elite that has awarded itself the ability to
    spend recklessly, rack up unsustainable levels of debt, and conjure money
    out of thin air” includes bankers, as well as politicians.

  • Pacific_waters

    Stigltitz’ error is that he attributes the growth in equality to the lack of government programs. It was the interference of the government in the mechanisms that promoted Venetian prosperity that resulted in its decline, not the LACK of government programs. A different version of that is happening today. Regulations become more and more complex and difficult to adhere to. I experienced that myself toward the end of the real estate boom. A piece of property that we owned was being developed for residential housing. We were informed that a new flood plain had been determined which resulted in the loss of some 45 units. No one at the county could tell us who had changed the rule,only that had been changed.

  • http://pulse.yahoo.com/_3ZZTMNN5NP6Y5YKP4EF4OHELHQ M

    Hey Simon, question for you. 

    What are you thoughts on giving your fingerprints and being added to national and international databases just for visiting a country? Or in order to get permanent residency or citizenship in a foreign country? 

    It just grates against some of my deepest held values that we are people and shouldn’t be tracked and cataloged. But I’ve noticed it’s a requirement of at least one of the two countries where I’m considering foreign permanent residency. And I’ve also noticed that Panama announced a few months ago that now all foreign visitors even will be fingerprinted, photographed, and added to their new national database (like the US does for foreigners, which I’ve always found creepy too). So much for Panama remaining a bastion of freedom.

    How have you justified or gotten past this mental roadblock of being added to these databases? Is it just a necessary evil to get the greater freedom allowed by foreign residency and citizenship?

  • Jay2

    Very good, as a history major and one who studied the Great Depression, (forgot much) but what I remembered is similar to what the heck is going on in the Western World today. Repeat, Rhyme… down the same backward road all over again.   ~~Jay.

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