August 25, 2015
By James Srodes
THE RICHEST MAN WHO EVER LIVED: THE LIFE AND TIMES OF JACOB FUGGER
By Greg Steinmetz
Simon & Schuster, $27.95, 304 pages
Many years ago James Bond and I used to retreat to the same spa in the English countryside to recover from our various adventures. Bond’s fictional Shrublands offered erotic massage therapy. My East Anglia stately mansion was a sedate way to take off the pounds I gained lushing it up as a financial reporter at monetary conferences.
Being abstemious is boring business. During an early stint at Shrublands I wandered into its lending library for guests and was drawn to a series of volumes with an arresting title – “The Fugger Newsletters.” Translated and edited between 1924 and 1926 these digests of more than 16,000 privately circulated 16th-century news bulletins presaged today’s up-to-the-minute market data from around the known world. There also was the kind of celebrity tittle-tattle from royal courts that would amuse a Kardashian. The report on the 51-day celebration staged in 1582 by a Turkish sultan to mark the circumcision of his son had me laughing out loud. Who wouldn’t laugh at dwarfs popping out of baked pies?
Happily, old copies of those volumes still can be found on used book sites, but before delving into this glutinous feast of financial and political history, one should have an appetizer taste of this just-published biography of the man who started it all, Austrian mega-financier Jacob Fugger (pronounced fog-er). Jacob Fugger was so rich that 007’s nemesis Goldfinger is chump change. But more than rich, Fugger can be said to have invented the modern economic world we live in. He invented us as we are today.
Author Greg Steinmetz is a former Wall Street Journal reporter-turned financial analyst, and this is a respectably researched and easy reading first attempt at biography. Here is how he describes his subject:
“We can easily see in Fugger a modern figure. He was at his core an aggressive businessman trying to make as much money as possible and doing whatever it took to achieve his ends. He chased the biggest opportunities. He won favors from politicians. He used money to rewrite the rules to his advantage. He surrounded himself with lawyers and accountants. He fed on information. These days billionaires with the same voracious instincts as Fugger fill the pages of the financial press. But Fugger blazed the trail. He was the first modern businessman in that he was the first to pursue wealth for its own sake and without fear of damnation. To understand our financial system and how we got it, it pays to understand him.”
That is not the half of it. Indeed, one faint criticism of Mr. Steinmetz’s narrative is that he uses anemic current comparisons of mega wealth, noting that Fugger’s empire would equal 2 percent of today’s European gross domestic product. That’s not even close to what Fugger commanded when he died in 1525 at the age of 66; his was a global market force that spanned nearly 150 years and took the Thirty Years War to destroy.
With obsessive calculation and cruel tactics Jacob Fugger built mining, trading and banking networks that stretched beyond Europe to South America, India and the Middle East. He shaped the policies and determined the outcome of wars between great powers. He directed the destiny of dominant Western institutions – the Vatican and the Holy Roman Empire, to name two. To do this he perfected currency exchange trading, lending at loan shark rates, building monopolies in critical commodities and, through the newsletters, maintaining the first intelligence service that brought vital information to enable inside trading maneuvers on a grand scale.
Jacob came from an established family of Swabian weavers (which meant guild membership), but after learning the rudiments of finance in Venice, he moved to Augsburg. He perfected the tactic of luring investment partners to put far more into a venture than he risked, though he managed to reap the larger profits. His earliest and longest-lasting clients were several popes, plus emperors like Frederick III, his son Maximillian I of what would become Austria-Hungary and Charles V of Spain. Each would award him with concessions in fabulous mining ventures in copper, silver and spices, whereupon he drove the competition to the wall by slashing prices.
He won an end to the Vatican’s ban on charging interest on loans, determined the outcome of wars and was so notorious for his cold greed that he became the lightning rod of complaints from Martin Luther and other leaders of the Protestant Reformation. In his public persona he was unashamed greed incarnate and reveled in the nickname “Jacob the Rich.”
Wall Street and its penchant for shortsighted greed pales before the world that Jacob Fugger created. Read his story and see today’s reality – finance, politics and ethical – writ large.
• James Srodes’ latest book is “On Dupont Circle: Franklin and Eleanor Roosevelt and the Progressives Who Shaped Our World” (Counterpoint).