Nature's Evil

Having secured a monopoly on silver, Fugger set his sights on gaining a monopoly on copper. To get the better of his few competitors in the Carpathians, he resorted to dumping. By saturating the Venetian market with copper, he was able to lower the price enough to force his rivals to declare bankruptcy, and their mines fell into Fugger’s hands. Another enemy was the Hanseatic League – it intercepted Fugger’s ships as they transported copper through Lübeck. But the might of the Hanseatic League was on the wane. In 1494 the tsar of Muscovy, Ivan III, had put a stop to its monopoly on trade in Novgorod, and a hundred years later Elizabeth I would follow his example in London. The traditional herring catch in Bergen was exhausted. Sweden, a rising star of imperial rivalry, was supporting the Dutch in the Baltic Sea. For his part, Fugger paid lavish sums to Danzig and Lübeck to deter them from supporting the monopoly rights of the Hansa. History was once again on Fugger’s side: in the sixteenth century the Hansa ceased to exist.

The Hansa had been the most powerful trade organisation of the Middle Ages. Trading in the Baltic and the North Sea, from London to Novgorod, the league had dozens of bases and warehouses, hundreds of armed ships, thousands of skilled workers. The Hansa’s strategy was diversification – herring in Bergen, fur in Novgorod, timber in Riga, grain in Danzig. With Fugger, monopoly on metals merged with monopoly of power. Charles V united the Spanish and the Holy Roman empires, and Fugger extended credit to him. In response, Charles gave him mercury mines in Spain. This mercury was used to purify silver in Potosí. Once he possessed mercury, Fugger had the whip hand over American and European silver.

The art of the financier consists in manipulating the future. In 1514 Fugger, in collaboration with Leo X, a son of Lorenzo de’ Medici, hatched a new financial scheme. It had long been a custom that the church would pardon sins in exchange for donations; now, this procedure was securitised. The sinner paid in silver and received a piece of paper stating the number of days that his soul would have to spend in purgatory. The indulgence was a security denominated in dark purgatory years: the more the sinner paid, the shorter would be his sufferings. Remarkably, the market in indulgences appeared in Europe before other securities, and even before paper money. Because it would happen in the future, salvation could be purchased at a discount in the same way as Fugger purchased metals that had not yet been extracted. The first indulgences were sold in Annaberg, a mining town near the Czech border. Then this profitable business spread throughout the German lands and the whole of Catholic Europe. Leo X announced that the profits from indulgences would be spent on building St Peter’s Basilica in Rome. In fact, this money was divided between the pope and Fugger. The merging of these two monopolies, on salvation and on silver, was a decisive step towards full monotheism. Thanks to indulgences, the Golden Calf miraculously merged with the wooden cross.

Fugger had his own social policies. In the suburbs of Augsburg he built the Fuggerei, an innovative social housing complex; it consisted of more than a hundred houses, built according to a standard plan and let for a peppercorn rent. His best workers, trusted people, veterans of labour, lived there. These low-rise apartment blocks exist to this day; people live in them and visitors are taken on guided tours where they hear that this social housing was the sign of progress. But Fugger could not atone for his sins in this way. Indulgences provoked furious rebukes from Luther’s followers; this was a crucial moment in the rise of the Reformation. In revolts of 1524, weavers, miners and farmers combined into a revolutionary movement that entered the history books as the Great Peasants’ War. In his Dialogues , the ideological leader of the uprising, the knight and poet Ulrich von Hutten, accused Fugger of creating ‘mercantile monopolies’, which robbed the miners, undermined the peasants and supported Rome. The biggest uprising experienced in Europe before the French Revolution, this Peasants’ War caused hundreds of thousands of casualties. Fugger paid mercenaries to fight against the people and armed his troops with cannons made from his own copper. The uprising was quashed – miners and weavers were no match for artillery. The leaders were tortured and executed, and the fields ran with blood. The Protestants loathed Fugger, seeing him as the incarnation of evil. In their minds, the resource economy as implemented by Fugger – mines, mercenaries, venal bureaucrats and priests, social housing for the chosen few, and monstrous indulgences – all blended into the kingdom of the Antichrist.

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