In 1204, under the disguise of the Fourth Crusade, a Venetian force sacked Constantinople, the capital of the great Byzantine Empire, greatly weakening it. Despite their oath not to attack fellow Christians, crusaders under Venetian command looted, terrorized and vandalized the city for three days. They destroyed or stole many ancient Roman, Greek and Byzantine treasures. Among the stolen works were the famous horses of the Hippodrome, which were shipped back to Venice and today adorn St. Mark's basilica there. Crusaders also destroyed the great library of Constantinople. Additionally, they raped and massacred thousands of the city's inhabitants. Ironically, the Fourth Crusade originally sailed from Venice to protect Christendom (and Constantinople) from the Muslims. In effect, the assault on Constantinople greatly weakened the Byzantine Empire, led to its decline and probably contributed to its fall to the Ottomans two centuries later (see Chapter 4).

Ironically, Venice was the western outpost of the Byzantine Empire, which gained its independence from the empire only in 814. An agglomeration of marshy islands, Venice lacked the landmass for agricultural produce, which was the primary source of wealth in those times. How did this relatively poor backwater grow to become the capital of an empire that ultimately brought Constantinople to its knees?

This chapter argues that innovations in shipbuilding and finance were primarily responsible for the rise of the Venetian empire from the eleventh to the fifteenth century. Venice developed the technology for designing and efficiently building the Venetian galley, the most important ship in the merchant and military navies of the state (see Figure 6.1). The galley was built in the Arsenal, which at its peak could turn out about a galley a day (see Figure 6.2). The Arsenal was most responsible for Venice's rise as an empire, distinguishing the state from all other city- states in the Mediterranean. Merchant galleys carried its trade, while military galleys protected it against enemies. Financial innovations enabled risk sharing and triggered merchant entrepreneurship in trade. Trade was the other major source of Venice's wealth and power.