A Short Economic Histroy of Budapest Pre 1200


In the heart of Hungary runs one of Europe’s most influential and valuable assets, the River Danube. Playing a critical role in the economic development of nations along its shores, the Danube played the pivotal role in the makings of the first Hungarian settlements. Running between the towns Buda and Pest, this body of water was the apex of early settlement and economic development for numerous populations and tribes coming to this region during the tenth and eleventh centuries.

By the early tenth century the nomadic Hungarians from the east (tribes were made of men of Finno-Ugrian and Turkish descent), known then as Magyars had completed settled into the area of Budapest and a century later established the Kingdom of Hungary.[1] Previous tribes as well as the Romans had settled this land before for its rich soils and ideal climate. The Danube as well was naturally resourceful with its abundance of fish and length extending beyond the borders of Hungary into Europe. Furthermore settlements could not have been better situated as the hills of Buda on the western portion provided natural defenses against the Roman Empire. Previous settlements established themselves in Buda for sometime before the arrival of the Magyars leaving land that had been used to farming and better for future urbanization.[2] The Danube also protected Buda’s eastern border thus safely encasing a settlement more so than Pest which was protected by the Danube in the west but lay defenseless on its eastern front. By the time of the Magyar’s settlement Pest had been cleared by Marcus Aurelius Probus of dense forestation leaving the once timber driven town open to the new economic exploitation of wheat.[3] Through development in farming and increase in population the Magyars were able to take advantage of their new lands and developed proficient growing techniques including three course crop rotation. Ultimately and forever Pest played an essential role in the economic establishment and endurance of the Hungarian Kingdom and served as the producer of Budapest’s most successful economic export, wheat.

It would not be until 1000 that Hungary received its first “formal” king; King Stephen I.[4] Stephen became the most influential public figure bringing enormous changes to the Hungarian society via political and economic revisions. His renovations allowed for the growth of Hungary and further promoted its stability in government and economy. The original founders of the Hungarian Kingdom failed to successfully govern tribes and by 917 had spread themselves so thinly across the Carpathian Basin that it lost all form of civil government.[5] Stephen represented order and stability politically and economically as Hungary became independent of Byzantium and the Roman Empire.

Conversion to Christianity was one of Stephen’s first moves after his enthronement as he ordered to be ordained by the Roman Catholic Church.[6] Though obviously politically charged in order to avoid confrontation with local Christian states in Europe particularly the growing Roman Empire in the northeast, it is said that Stephen personally embraced Christian ideals as well unlike his predecessors.[7] His conversion led to the slow social shift from Paganism to Christianity thus allowing for economic opportunities such as new trade markets with outside Christian states. With Stephen’s conversion he enrolled the Church in all kingdom transactions. New laws mandated tithing to the Church while bishops were dispersed throughout towns in order to participate in civil government affairs therefore including money transactions.

In order to stimulate his economy Stephen enforced new fiscal policies. His nobles were allowed to slip under the radar escaping from taxation. All of the lower classes and peasants were not so fortunate and paid hefty tolls. Stephen however was a fair king and unlike others before him ruled with a hand that was just across all of his subjects. Nobles were exempt from taxes but still were forced to tithe to Church like the rest of the population and due to tax immunity were forced to also to tithe to the Kingdom. This policy applied to even his highest high consuls and all military leaders. Lower classes and Hungary’s peasants avoided this at the expense of taxation instead.[8] Through this new and successful strategy of monetary collection from all subjects Stephen laid the foundations for the best serving government structure therefore allowing for economic development to take place. In fact by the reign of Bela III in the twelfth century, the kingdom had profited from coinage, toll and taxation in excess of thirty thousand silver marks.[9]

With the aid of a stable government and economy, the Kingdom of Hungary focused itself on its own growth. Markets cropped up and manufacturing began along the Danube. Soon after, Stephen permitted trade along the river allowing for even greater prosperity. A valuable resource for not only water and food (the large sums of fish population) the Hungarians held the advantage of a river easily navigable by vessel allowing for easy transportation of goods to neighboring markets. This also cut transportation costs thus maximizing returns from sales. Markets in Buda and Pest in particular began to establish themselves and quickly grew in size and popularity thanks to the close position to the Danube’s banks. Pest began such a lively trading post that it was granted certain commercial liberties from the monarch and even their own civic seal.[10] Establishments of markets for hides, slaves, metals and agriculture as well as craftsmen of saddles allowed for further development in the two towns aiding in their population increase.

The main export of Hungary’s kingdom, wheat, was cultivated in the plains of Pest. Though protected by the Danube to the west, low lying Pest was left completely vulnerable in the east. In fact the highest point of Pest sat lower than the lowest elevation of Buda’s landscape.[11] With the acknowledgment that the kingdom’s economic stronghold could easily be compromised, Stephen allowed for much of the kingdom’s wealth to be spilled into establishing a fortress to protect the agricultural wealth in the Great Plain. After fortification the Magyars lived in a prosperous as well as well guarded land. The plains of Pest were easily cultivated thanks to the flow of the Danube from the north and the ideal topography of Pest as it lay completely flat and seemingly untouched as opposed to the hillier Buda. A cooler spring and summer along with little rain generated fields of grain that were easy for upkeep. So much could be produced within a season that the prices of grain were dramatically cheaper than anywhere elsewhere.[12] This led to the area of Budapest becoming the foremost market for all grain trade. Through the expenditures of fortifications the economy would be guarded and the people of the villages could enjoy a prosperous and as long as Pest continued to produce, stable economy.

The Hungarian Kingdom however would not be without attack and other struggles. Other nations were not blind to the great value that the Danube held and the great wealth it could create for their own settlements should they conquer it. Just as the Magyars had conquered the land for themselves, others prepared to move in as well.

[1] Gyula Kristo ,The Magyars- Their Life and Civilisation, (Corvina, 1996)

[2] Martyn C. Rady, Medieval Buda, (NYC: Columbia UP, 1985) 1

[3]The Catholic Encyclopedia, Vol. 12 “Marcus Aurelius Probus” (New York: Robert Appleton Co., 1911) and Encyclopedia Britannica, “Budapest” http://www.britannica.com/EBchecked/topic/83080/Budapest, Accessed 5/12/09

[4] Rady, 2

[5] Rady, 11

[6] Henry Hart Milman, History of Latin Christendom, (London: John Murray, 1867) 398

[7]The Catholic Encyclopedia, Vol. 14(New York: The Encyclopedia Press Inc.)

[8] Rady, 11

[9] Rady, 12

[10] Rady, 9

[11] Marton Pesci, Physical and Economic Geography of Hungary (Corvina, 1977) 24

[12] Pesci, 45

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