When the news reached Venice in 1497 that Vasco da Gama had doubled the Cape and sailed to Calicut, the Venetian stock market collapsed: the Venetians understood that their monopoly on the spice trade was broken, and that their world would never be the same. Or so I heard somewhere, sometime. True? Actually, after a desultory review of some standard sources, I can't pin it down, at least not in its dramatic form. I gather the Venetians did understand that Gama's achievement was molto bad news for them, and they did undertake various devices to cope with it. They sent out a highly skilled diplomat as ambassador to Lisbon. They suggested to the Muslims at Cairo that they might want to cut the customs duties on Venetian shipments (heh, and good luck with that).
But two things. One, Gama's achievement can hardly have come as a shock, in 1497. The Venetians had already taken a huge body blow when the Turks, after centuries of struggle, finally conquered Constantinople in 1453. And Gama's voyage was only the capstone of a long process: the Portuguese had been scratching their way down the West African coast already for at least a generation. So a good guess would be that the Venetians had already discounted their misfortune into the market price.
And two, the Venetians were already at work shifting their focus of action: from the East to Europe, from invasion and trade to passive investment=-notably, land rents. From 100 percent returns, one might say to two percent--but two percent steady is better than two percent of 100 percent with a 98+ percent chance of total washout. Oh, and the museum thing. Venice had already begun to establish itself as the world's first great modern cultural Disneyland. So Venice after Venice could look forward to a long and bright future; Venice the undead continues to stalk the earth.
That's an interesting enough story but where have I heard it before lately? Oh, right: the Dutch. The great age of Dutch shipping/trading/buccaneering ended in--oh, say 1700, at a stretch 1800. After that? After that, Amsterdam did not exactly go poor. Well: there was a core of poor Amsterdamers, but a lot of them had been poor all along and would simply remain in their familiar misery. A small tranche, left behind with the money, became rentiers, passive investors, coupon clippers, living comfortable, if boring, lives long after anybody remembered the reason why.
Is there a pattern here? Is it characteristic of societies to grow and flourish, to mature and loose their oompah--but then to continue more or less indefinitely, under inertial force? Remind you of anyone you know?