Visitors to the Croatian city of Dubrovnik are struck by the magnificence of the stone walls that surround its Old Town, the beauty of the red-tiled roofs against the blue sea and the stunning view of the entire city from the nearby mountain.
Dubrovnik is a jewel to the eye from any angle.
As I walked through its streets and alleys just last week, I knew I was in the heart of Ragusa – the name of the republic headquartered there for 450 years. At its height in the 15th and 16th centuries, it was one of the freest and most prosperous enclaves on the planet.
The Republic of Ragusa’s motto was “Liberty is not sold for all the gold in the world.” Its flag proclaimed “Liberty.”
The hundreds of ships in its commercial fleet exceeded those of Venice, a city-state boasting 10 times the population of Ragusa. The republic’s leaders and diplomats negotiated trade agreements that kept it prosperous and at peace.
The secret to Ragusa’s success was its liberty. Its government was small, limited and almost corruption-free. Term limits ensured that the top official, the rector, served only one month before he passed the office on to his successor. The rector barely moved his stuff into the palace before he had to pack up and move out. He couldn’t run for the office again for at least two years. Such restraints on power and a focus on trade made Ragusa the Hong Kong of the Mediterranean.
This was a place that appreciated the importance of private enterprise and encouraged it by leaving it alone to invent, innovate and prosper.
Slavery was common the world in the Middle Ages, as it had been since ancient times. Ragusa abolished it in 1416.
The tiny republic pioneered in bankruptcy law. While debtors’ prisons were ubiquitous in medieval Europe, Ragusan law established procedures for the settling of debts without incarceration.
Taxes were low, and capital was safe from the arbitrary confiscations by royalty all too common in the rest of Europe. State finances in Ragusa were known for their prudence. Balanced budgets and minimal debt were normal.
For centuries, kings and parliaments routinely debased money in numerous ways – including the reduction of precious metal content, cutting coins and melting the clippings into smaller coinage and the issuance of irredeemable paper. By contrast, Ragusans were sound money people, establishing a solid silver standard from early in the 14th Century.
The mint of Ragusa produced quality silver coin for more than 500 years. In large letters on the stone arch where the city-state’s public scales were once positioned is this inscription – in Latin – still readable today: “If our weights cheat, then we are cheated; as we weigh goods, God is measuring us.”
So what happened to Ragusa? In 1667, a massive earthquake devastated the city and surrounding area. The city-state rebuilt itself but never recovered its former glory. Then Napoleon seized and occupied it in 1808, extinguishing the republic.
Freedom works, and that’s a lesson than can be found no matter what era or corner of the world you examine. Long live the spirit of Ragusa!
Lawrence W. Reed, a resident of Newnan, is president of the Foundation for Economic Education. He writes about exceptional people, including many from his book, “Real Heroes: Inspiring True Stories of Courage, Character and Conviction.” He can be reached at email@example.com .