Financial History Issue 114 (Summer 2015) | Page 23

The Life and Times
of Jacob Fugger
the money which I have paid out, together
with the interest upon it, shall be reckoned
up and paid without further delay.”
People become rich by spotting opportunities, pioneering new technologies or
besting opponents in negotiations. Fugger
(rhymes with cougar) did all that but had
an extra quality that lifted him to a higher
orbit. As the letter to Charles indicates, he
had nerve. In a rare moment of reflection,
Fugger said he had no trouble sleeping
because he put aside daily affairs as easily as he shed his clothing before going to
bed. Fugger stood three inches taller than
average and his most famous portrait, the
one by Dürer, shows a man with a calm,
steady gaze loaded with conviction. His
coolness and self-assurance allowed him
to stare down sovereigns, endure crushing
amounts of debt and bubble confidence
and joviality when faced with ruin. Nerve
was essential because business was never
more dangerous than in the 16th century. Cheats got their hands cut off or a
hot poker through the cheek. Deadbeats
rotted in debtor’s prison. Bakers caught
adulterating the bread received a public
dunking or got dragged through town to
the taunts of mobs.
Moneylenders faced the cruelest fate.
As priests reminded their parishioners,
lenders — what the church called usurers — roasted in purgatory. To prove it,
the church dug up graves of suspected
usurers and pointed to the worms, maggots and beetles that gorged on the decaying flesh. As everyone knew, the creatures
were confederates of Satan. What better
proof that the corpses belonged to usurers?
Given the consequences of failure, it’s a
wonder Fugger strove to rise as high as he
did. He could have retired to the country
and, like some of his customers, lived a life of
stag hunting, womanizing and feasts where,
for entertainment, dwarfs popped out of

pies. Some of his heirs did just that. But he
wanted to see how far he could go even if
it meant risking his freedom and his soul.
A gift for rationalization soothed his conscience. He understood that people considered him “unchristian and unbrotherly.” He
knew that enemies called him a usurer and a
Jew, and said he was damned. But he waved
off the attacks with logic. The Lord must
have wanted him to make money, otherwise
he wouldn’t have given him such a talent for
it. “Many in the world are hostile to me,”
Fugger wrote. “They say I am rich. I am rich
by God’s grace without injury to any man.”
When Fugger said Charles would not
have become emperor without him, he
wasn’t exaggerating. Not only did Fugger
pay the bribes that secured his elevation,
but Fugger had also financed Charles’s
grandfather and taken his family, the
Habsburgs, from the wings of European
politics to center stage.
Fugger made his mark in other ways,
too. He roused commerce from its medieval slumber by persuading the pope to
lift the ban on moneylending. He helped
save free enterprise from an early grave
by financing the army that won the German Peasants’ War, the first great clash
between capitalism and communism. He
broke the back of the Hanseatic League,
Europe’s most powerful commercial organization before Fugger. He engineered a
shady financial scheme that unintentionally provoked Luther to write his “Ninetyfive Theses,” the document that triggered
the Reformation, the earth-shattering
event that cleaved European Christianity
in two. He most likely funded Magellan’s
circumnavigation of the globe.
On a more mundane note, he was
among the first businessmen north of the
Alps to use double-entry bookkeeping
and the first anywhere to consolidate the
results of multiple operations in a single

financial statement — a breakthrough that
let him survey his financial empire with a
single glance and always know where his
finances stood. He was the first to send
auditors to check up on branch offices.
And his creation of a news service, which
gave him an information edge over his
rivals and customers, earned him a footnote in the history of journalism. For all
these reasons, it is fair to call Fugger the
most influential businessman of all time.
Fugger changed history because he
lived in an age when, for the first time,
money made all the difference in war and,
hence, politics. And Fugger had money.
He lived in palaces and owned a collection
of castles. After buying his way into the
nobility, he lorded over enough fiefdoms
to get his name on the map. He owned
a breathtaking necklace later worn by
Queen Elizabeth I. When he died in 1525,
his fortune came to just under 2% of European economic output. Not even John
D. Rockefeller could claim that kind of
wealth. Fugger was the first documented
millionaire. In the generation preceding
him, the Medici had a lot of money but
their ledgers only report sums up to five
digits, even though they traded in currencies of roughly equal value to Fugger’s.
Fugger was the first to ͡