Friday, March 10, 2017

The Richest Man Who Ever Lived

Jacob Fugger of Augsburg (1459 – 1525) must be considered one of the wealthiest people, if not the wealthiest, to ever live. You can likely mention a few other individuals that surely, you would argue, were (or are) richer. But I don’t think so. Why? Because he arrived at a time when the rules of business were not clearly understood. Entrepreneurial savvy was not common. He was like a wolf among sheep. There were few restrictions to rampant wealth accumulation and he had business acumen to spare. His money touched everything—politics, religion, art, the military, natural resources, kings and queens, banks, transportation, legal systems, entire national states—everything!

You haven’t heard of Jacob Fugger “The Rich”? Neither had I until I read a book about the Medici (a wealthy and influential renaissance family—see my review of The Medici: Power, Money and Ambition in the Italian Renaissance). The Medici were wealthy, most definitely, but Fugger was richer. Like the Medici, Jacob Fugger entered the banking trade (he had started life in the family’s textile trade). He proved in the long run to have had better business sense than Giovanni, Cosimo or Lorenzo de' Medici. Jacob had an uncanny ability to smell a good deal.  He bought mines, funded merchant ships, acquired jewels and much more—and it all turned a profit. He collected castles. Collected them! Five hundred years on and his descendants are still reaping the benefits of his property owning activities.His money begat more money, which begat more money. And on and on. Martin Luther hated his guts.

In The Richest Man Who Ever Lived author Greg Steinmetz describes how Jacob Fugger amassed his wealth at a time when individuals were only slowly realizing that wealth could be pursued as an end in itself and that having a lot of it could win you the king’s ear. Jacob was low key. He made his money quietly all the while staying in the shadows and influencing politics. He pulled the (coin) strings to ensure legislation matched (that is, didn’t impede) business enterprise. He made emperors. Charles V would not have made it to the imperial heights he did without Fugger money.

Jacob’s life was full of incident and he seemed to get caught up in the middle of world altering events. One example will suffice to show you what I mean. There was a revolt in the German states; historians call it the German Peasants War. “The peasants” had the wonderful idea that wealth should be shared equally by all. We call that communism today. The conceptual apparatus of communism didn’t exist in Fugger’s time but the animating idea was the same. Fugger, capitalist that he was, thought that the imposition of forced sharing would inhibit business creativity; it would quash the incentive to find new products and new efficiencies in manufacturing goods, it would hurt investment. Simply put, it would be bad for business. So Fugger money funded the army that went on to crush the revolt.

Jacob Fugger wasn’t the nicest guy. He didn’t have many friends. When he lay in bed dying his wife was off with her lover. He breathed his last surrounded by paid assistants. Money, ultimately, didn’t make him happy (at least it seems that way to this reader). The sense I have of the man after having read this book is that wealth accumulation was a kind of addictive game for Jacob. He was good at it. He was aggressive and sharp eyed and ambitious. He liked what money could do. Nowadays there are plenty of people who chase after wealth for its own sake. Jacob Fugger was the first and perhaps the supreme model of this personality type.

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