Economy of the Kingdom of Jerusalem: Trade and Tribute

Introduction: A Commercially Oriented Latin Kingdom

The Kingdom of Jerusalem was a Latin Kingdom founded in 1099 as the result of the Crusades to the Middle East. It was a kingdom, but it lacked the power of its European counterparts in the West. This was largely because its economy was fairly weak, relying often on Europe for financial support. The economy was also heavily reliant on trade, and although there were agricultural estates, agriculture was not as important to the Kingdom as commerce. Trade was likewise beneficial to the European markets that profited from the Latin presence at the trading crossroads of the Middle East.

Furthermore, the Kingdom of Jerusalem's economic character was defined by its available resources and its existence as a Latin Kingdom, which heavily contributed to its nature as a vassal and feudal state that relied on tribute and taxes to function. Overall, the economy of the Kingdom of Jerusalem was considered successful during many periods of its existence, but it remained in a precarious situation. It closely resembled the European feudal states of the West, but without the agricultural backing. Taxation, tribute, and trade were more important than agriculture, as the Kingdom occupied a vital commerce crossroads while possessing relatively little land suitable for farming by the nobility. This made the economy significantly more urban than rural.

Geography, Organization, and Economic Structure

The organization, history, and geography of the Kingdom of Jerusalem went a long way in determining its economy. Roughly the size of modern-day Israel and Palestine, the Kingdom was small. It was, however, situated in an area of great importance to both Europe and the Middle East. Due to its proximity to the Byzantine Empire and other neighboring states, the Kingdom of Jerusalem was far more oriented toward the East than its European counterparts. This orientation resulted in greater trade and economic support that came not solely from the West, but from all surrounding areas.

Additionally, the Kingdom of Jerusalem's unique position as a Crusader Kingdom greatly influenced its economic standing. The Church functioned as a "power independent of the kings," giving the Latin Church a great deal of influence in the region (Brèhier). This meant that the King's powers were greatly reduced, though he retained adequate resources for the defense of Jerusalem. The financial situation of the Kingdom resembled that of the Principalities of Europe, with the "most profitable sources of income being the customs duties enforced at all the ports" (Brèhier). The King and the Templar rulers held powers that were sometimes, but not always, subordinate to the Pope, and they were frequently forced to extract money to defend their kingdom militarily. Overall, the Kingdom of Jerusalem was organized like a European Principality, meaning that raising finances followed much the same pattern — though the Pope and other Latin Catholic authorities exerted considerable sway over the economic sphere through their political and military influence.

Royal Revenue: Taxes, Trade Caravans, and Pilgrims

The King also had the unique advantage of finding revenue through additional means. One was taxing the traveling trade caravans that passed through his Kingdom (Brèhier). This allowed the King to acquire greater resources than his European counterparts. He also held a "monopoly of certain industries" as well as the "exclusive right to coin money" (Brèhier). The King had authority to create additional taxes, especially when his Kingdom was threatened by outside forces. A significant portion of the economic resources of the Kingdom of Jerusalem was therefore directed toward military defense in order to preserve its borders. Pilgrims also bore a heavy share of the Kingdom's financial burden through taxes levied upon their arrival (Kjeilen).

Commerce Between Europe and the East

The factors that created the Kingdom of Jerusalem produced an economy that was primarily commercial. By the twelfth century, the prosperity of the Kingdom had reached its peak. This was largely due to economic benefits derived from interaction with Italy. In the Italian cities of Genoa, Venice, and Pisa, as well as the French city of Marseilles, local merchants received houses and districts administered by their own councils within the ports of the Kingdom (Brèhier). These arrangements, combined with the region's longstanding history as a center of commerce, meant that the Kingdom of Jerusalem engaged in extensive trade with Europe — trade that spread beyond the Mediterranean to other parts of the continent. Goods from Northern Europe were exchanged within the Kingdom, opening up markets in the Middle East and Asia now that the Palestinian area was under Latin control. The region thus became a crossroads for trade between West and East (Kjeilen).

Trade between Asia and Europe was therefore what greatly sustained the otherwise fragile economy of the Kingdom of Jerusalem. The cotton, silk, and spice trades were particularly important, as new goods became available to Europe from the East for the first time. Jerusalem utilized its relationships with all its neighbors and benefited both from direct trade and from taxes on trade caravans passing through. A monopoly on trade was granted to colonial merchants from Europe, and the most costly merchandise was the preferred commodity. Agricultural products were traded as well, but they were secondary in importance to goods that were exotic, unique, and new to European consumers. This included silk and cotton — unique to Syria at the time — the dye-works and glass factories of Tyre, and precious spices, silks, and stones from places as far away as China (Kjeilen).

Commerce between Europe and the Kingdom of Jerusalem also included goods necessary for the Kingdom itself. The Knights in Jerusalem took advantage of their position at the crossroads of affluent trade by surrounding "themselves with gorgeous equipments and choice furniture," such as those crafted by Arab artisans (Brèhier). Much of this trade was cemented in formal treaty. The most notable was the Pactum Warmundi, a treaty of alliance between the Republic of Venice and Jerusalem. This treaty illustrates the level of autonomy granted to foreign — particularly Italian — merchants within the Kingdom of Jerusalem to encourage trade. It also demonstrates that taxing pilgrims was a priority for the King, not to be foregone regardless of any impact on commerce (Prawer). The results of this extensive trade allowed the Kingdom of Jerusalem to maintain a positive economic situation despite its limited agricultural capacity.

Conclusion: Trade, Colonialism, and the Kingdom's Economic Legacy

The Kingdom of Jerusalem can be understood as having an economy based largely on trade, with agriculture and tribute also playing important roles. It is also significant as an economy run by Europeans — as a Latin and Christian Kingdom — in an area that was predominantly Muslim. This meant that while Christian and European feudal customs were transplanted to the region, the Kingdom became vitally important as an area that opened up trade between the Middle East and Asia and Europe.

The organizational factors underlying the Kingdom of Jerusalem played a key role in shaping its economy. Because of its Latin and Christian roots, Italian merchants were granted favorable terms of trade and came to dominate the commerce that was predominant in the Kingdom. Because of the scarcity of land and the unwillingness of the nobility to maximize its agricultural potential — relying instead on Muslim traditions and European feudal models — agriculture remained limited. And because a large mercenary military was required for protection, there was a continual need for substantial tribute and taxation to fund the Kingdom's military operations.

Despite these factors, which might have contributed to a weaker economy, the Kingdom of Jerusalem maintained a tenuous but functional economic position and was able to prosper — especially in the twelfth century — as a result of its trade and its realization of the commercial potential of the Middle East. This brought wealth to merchants, colonizers, Europeans, and nobles alike, who could not only tax those passing through but also introduce new and valuable products to European markets. Trade between Europe and the East improved substantially, and the Kingdom of Jerusalem drew much of the Middle East and even China into a commercial relationship with Europe from which the Kingdom and the European kingdoms both benefited.

This early opening of trade routes was also historically significant in another respect. It has been argued that the Kingdom of Jerusalem, "established as a result of the First Crusade," represented one of the "first attempts made by Europeans at colonization" (Brèhier). The economy of the Kingdom can therefore be understood as a precursor to later colonial economic models, in which Europeans took over new lands and shaped their economies to benefit Christian and Latin colonizers. This dynamic is reflected in the trade agreements that advantaged European merchants while Muslims faced increased taxation under Christian rule. Overall, the Kingdom was thus one based upon trade and tribute and, to a lesser extent, agriculture — but also an early example of European colonization. By entering another region militarily and instituting their own customs and economic preferences, the ruling classes of the Kingdom of Jerusalem, operating under the guise of Crusaders, functioned as economic colonizers intent on maximizing trade through newly acquired Eastern territories. That even pilgrims bore an economic burden imposed by the Kingdom suggests that economic motives were at least as significant as religious ones in sustaining its existence.

Works Cited

Brèhier, Louis. "Latin Kingdom of Jerusalem (1099–1291)." Catholic Encyclopedia. 2007. New Advent. 28 Apr. 2007 <

Heidemann, Stefan. "Financing the Tribute to the Kingdom of Jerusalem." School of Oriental and African Studies (2007). 28 Apr. 2007.

Kjeilen, Tore. "Kingdom of Jerusalem." Encyclopedia of the Orient. 2007. 28 Mar. 2007 <

Prawer, Joshua. The Latin Kingdom of Jerusalem: European Colonialism in the Middle Ages. Phoenix P, 2001.