So, from what I know, there were plenty of merchant republics (being Venice the most important one) in Northern Italy, the cradle of renaissance. What I don't understand is, how could such small states be able to fuel an important intellectual revolution? I know their trade power was important, but how developed was trade in the pre-capitalism world? Usually when I hear someone talk about any kind of economy pre-modern times, agriculture was always the centre, and I assume these merchant republics (just by their size) weren't so strong in that aspect.
If possible, could you please provide some sources? Thanks in advance!
The answer, in short, is money and competition. What funds the Renaissance, at least in the arts, is a huge amount of money, and a desire to use it. This was a desire to outshine not just rival families within a city, but also rival cities themselves. This type of spending on art and architecture was nothing new in Europe; it was a common throughout the medieval period as well as dukes and kings spent lavishly as a demonstration of their power. In Italy, this was magnified, as you had a large number of wealthy families and a large number of wealthy cities with those families, all competing on various levels to outshine the others. Sometimes this was to the point of rediculousness such as in Bologna: http://upload.wikimedia.org/wikipedia/commons/d/da/Medieval_Bologna.jpg
Italy also had one more thing that undoubtedly contributed to the Renaissance: access to the east. Through their trading relationships they were able to important more than just wealth but also culture. When they sacked Constantinople in 1204, huge numbers of ancient texts flooded into Italy, which were quickly copied and disseminated.
So here we have the perfect storm of a large number of polities, each with a significant number of ruling caste members, all of whom were competing for prestige (both with each other, and on a polity vs polity basis), with access to a huge amount of wealth and culture thanks to their contacts with the east.
