London is the new Venice

London matches the glory of Venice in its prime

11 July 2007

Ross Clark says that our capital has the geographical, economic and social conditions that made the Venetian city-state of the 14th century — but all this is vulnerable

Already by the 14th century, however, attitudes towards immigration were changing. Until 1395 Venice had welcomed Jews and, with Catholics banned from usury, had relied upon their loans to oil the wheels of the economy. Then, in a fit of regulatory fervour, the city authorities decided that there was too much money-lending. Jews were banned from taking up permanent residence and, when they did visit the city, made to wear yellow symbols. Thereafter, Jews did return to live, albeit to the ghetto.

Meanwhile, the regulatory burden grew, while enforcement became more sporadic. Out of the good times grew a culture of dependence. By the end of Venice’s life as a city-state in 1797 one in six was living on welfare benefits. Sound familiar? They are the same pressures as on London today: a grudging attitude towards economic migrants, ever more rules but increasingly unreliable enforcement of them — sometimes weak, sometimes vindictive. Less immediately obvious, at least while the economy is booming, is the growing dependence upon welfare. Should the economy turn, on the other hand, it will become a lot clearer just how many Londoners have become reliant on Gordon Brown’s tax credits and on subsidised housing. In fact, Gordon Brown’s failure to address house-price inflation may turn out to be his eventual undoing.

It is a rare set of circumstances that goes towards creating a Venice or a modern London: a combination of the right geographic, economic and social conditions that create a powerful city-state. And they are conditions which can easily be changed by ham-fisted interference on the part of the authorities. Jealousy of London’s wealth, and a desire to level down to the considerably less buoyant economy in the rest of Britain, could easily kill the great Rialto that has grown along the Thames. As Venice proves, all that is left then is eternal tourism.