skills were developing. Late medieval Italy is the home of modern diplomatic institutions, with their resident embassies, conventions of immunity, and intelligence-gathering. The system was already perhaps sophisticated enough to replace, or at least to supplement, warfare as a prime means of conducting international affairs. The peace was also possible because the major powers, and the lesser ones, were in many ways becoming rather similar. They were all territorial states (even if the papacy's claim to this position looked weak), they were almost all governed by princes (for foreign policy purposes the Medici in Florence assumed this role), all of whom were diverting increasing energy and funds into the splendours of the court and courtly culture, another channel for rivalry. It may be, as has been suggested, that this closed court life increasingly began to isolate the rulers and their entourages from some of the pressures which were beginning to tell on their subjects. By the second half of the fifteenth century Italy's commercial position was weakening and being overtaken. The famous collapse of the Medici bank was not just due to mismanagement; newer and stronger rivals, in Germany and elsewhere, were emerging, new trade routes were being established. Yet the aristocracy continued to pour spectacular amounts of money into 'luxuries': buildings, paintings, the patronage of literature, feasting, and spectacle on an extravagant scale. Funds were increasingly being diverted from the land, and from raised taxation, but were less and less channelled into economically productive use.
The Italic League also worked, most obviously, because a balance of power had been achieved. The five major powers were of roughly equal political or strategic weight, and had indispensable functions to play. But there remained weak points. In Ferrante ( 1458-94) Naples once more acquired an aggressive monarch, while the papacy saw both threats to stability on its southern flank and renewed unrest among its vassal princes in the papal states. Repeatedly it was this part of the peninsula which destabilized the balance of power, and it was the initiative of the notorious Sixtus IV which caused the first serious threat to the alliance when he caused a rift with Florence which then dragged the other powers into conflict.
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