In the early Middle Ages most trading was local and conducted through barter. With the growth of agricultural specialization, this form of commerce expanded without changing its essential principles. Villagers brought their surplus goods to weekly markets held in a nearby town and exchanged them for clothing, tools, or agricultural products that they could not produce efficiently themselves. Larger transactions were conducted at great annual fairs, such as the one at Champagne that attracted merchants from all over Europe until well into modern times.

At first, long-distance commerce was largely in the hands of Jews. Though Jews were not invariably barred from holding land, Christian hostility kept them socially peripheral and reinforced the natural cosmopolitanism of a people in exile. Their wide-ranging contacts, reinforced by strong kinship ties, gave them a powerful advantage when virtually everyone else was bound by interest and circumstance to the locality of their birth. This situation began to change in the eleventh century. The increased volume, safety, and profitability of trade began to make it more attractive to Christian entrepreneurs who were able to squeeze out their Jewish competitors by securing favored treatment from Christian authorities. The anti-Semitic persecutions that began in the twelfth century arose primarily from the crusading impulse, but they coincided with a perceived decline in the economic usefulness of the Jews.

The most aggressive of the new traders were the inhabitants of the Italian coastal towns. By the beginning of the eleventh century, a number of Italian cities had outgrown their local food supplies and emerged as net importers of agricultural commodities. Grain, oil, and other commodities had to be purchased abroad, usually in Spain or Sicily. Ports such as Pisa, Amalfi, and Genoa possessed the maritime skills necessary for this trade and were often forced to engage in it for their own survival. Only the threat of Muslim piracy stood in their way. By combining their fleets and taking advantage of political disorder in North Africa, the three cities were able to drive the Muslims from their bases in Sardinia, Corsica, and the Balearic Islands by 1088.

Venice, the greatest trading city of them all, had no contado or agricultural land of its own. It produced little more than glass and sea salt, but being located at the head of the Adriatic, it was the perfect center for trade between the eastern Mediterranean and central Europe. Dependent upon commerce almost from its beginnings, Venice, like other Italian ports, owed its eventual success to sheer necessity, maritime skill, and location. By the beginning of the twelfth century, the Italians were dominant in the Mediterranean carrying trade and were beginning to extend their routes northward. . .

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