Latest / Economy & Finance / The richest man ever The story of Jakob Fugger _ The Story of Money

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The richest man ever The story of Jakob Fugger _ The Story of Money · Economy & Finance

• 0:00
  Speaker 1: He would be worth about $ 4 trillion.
• 0:02
  Speaker 2: Wow.
• 0:03
  Speaker 1: Compared to poor Elon at only $ 900 billion.
• 0:06
  Speaker 2: God, pathetic. Elon needs to get his finger out, really.
• 0:09
  Speaker 1: Fokker was a glorified peasant. There's a risk of him
• 0:12
  Speaker 1: being hauled off in chains and having a hot poker
• 0:14
  Speaker 1: shoved through his cheek on the whim of the emperor.
• 0:18
  Speaker 1: And he's saying, listen, buddy boy, I gave you this money.
• 0:20
  Speaker 1: You got to pay back or else. Here's a banker
• 0:23
  Speaker 1: who started probably the most seminal event in European history.
• 0:31
  Speaker 2: Today on the story of money. If you want to
• 0:34
  Speaker 2: understand how modern billionaires weaponise money, create monopolies and use
• 0:39
  Speaker 2: politics to their advantage, well, you don't need to listen
• 0:42
  Speaker 2: to a tech podcast. Nope, you just need to listen
• 0:45
  Speaker 2: to us and look to the Renaissance.
• 0:48
  Speaker 3: Because although everyone's heard about the Medicis and how they
• 0:52
  Speaker 3: revolutionised banking in medieval Italy, there was actually another family
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  Speaker 3: operating in Europe's north at the same time in the 1500s.
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  Speaker 3: And they were the most influential family you've never heard of,
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  Speaker 3: called the Fuggers.
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  Speaker 2: They were a textile and mining dynasty in the 1500s,
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  Speaker 2: who at their peak, depending on how you measure it,
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  Speaker 2: were richer than the Medicis. Way richer. And in fact,
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  Speaker 2: richer even than Elon Musk or Bill Gates today. They
• 1:19
  Speaker 2: were fabulously wealthy.
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  Speaker 3: They were also richer than the Trump family, if you
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  Speaker 3: can believe it. But the point is, 500 years before
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  Speaker 3: Silicon Valley... the man at the center of the Fugger family,
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  Speaker 3: a man called Jakob Fugger, built a business empire that
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  Speaker 3: dwarfed today's tech titans. And that's whose story we're going
• 1:37
  Speaker 3: to tell today, because actually this is a saga which
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  Speaker 3: might sound alarmingly familiar.
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  Speaker 2: Yes, and to introduce us to the Fuggers, and in
• 1:47
  Speaker 2: particular Jakob Fugger, we're joined by the former journalist and
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  Speaker 2: historian Greg Steinmetz, author of The Richest Man Who Ever Lived.
• 1:55
  Speaker 2: Hi Greg, thanks so much for being here today.
• 1:57
  Speaker 1: Thank you very much for having me. You know, I
• 1:59
  Speaker 1: love the Financial Times. I've been reading it forever. And
• 2:01
  Speaker 1: this is an honor as well.
• 2:03
  Speaker 2: As a privilege.
• 2:04
  Speaker 3: Okay, that was not a paid advert, but thank you.
• 2:06
  Speaker 3: And we're fascinated by what we're going to be talking
• 2:09
  Speaker 3: about today, because there's such a lively debate about billionaires
• 2:13
  Speaker 3: right now. And we need to look back to try
• 2:17
  Speaker 3: and frame this more accurately.
• 2:24
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• 2:58
  Speaker 3: So before we go any further, the Fuggers are not
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  Speaker 3: as well known as other rich historical dynasties like the
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  Speaker 3: Medicis or the Rothschilds. And then Jacob was known as
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  Speaker 3: Jacob the Rich, Jacob Fugger, wasn't he?
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  Speaker 1: Yeah. And he gave himself that name. He was very
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  Speaker 1: proud of his wealth. That's all they cared about was
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  Speaker 1: making money. And he wanted to be known. And in fact,
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  Speaker 1: on his tombstone, he points out that he was second
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  Speaker 1: to none in the creation of extraordinary wealth. and for
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  Speaker 1: that reason should not be numbered among the mortals.
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  Speaker 3: Elon Musk, eat your heart out.
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  Speaker 2: I'm curious, how wealthy was he?
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  Speaker 1: The way that economists and historians compare wealth through the
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  Speaker 1: ages is to take someone's net worth and divide it
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  Speaker 1: into the size of the economy at the time. If
• 3:44
  Speaker 1: you take his wealth, divide it into the size of
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  Speaker 1: the European economy, it came out to 2%, which is
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  Speaker 1: an enormous, enormous number. And that's even more than Rockefeller
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  Speaker 1: had at his peak. And if you just work the
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  Speaker 1: math on that, that comes out to about 400 billion.
• 4:02
  Speaker 1: I think as of this morning, Elon is worth about 900.
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  Speaker 1: But here's an interesting distinction. Fugger kept a balance sheet.
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  Speaker 1: That's how we know how much money he had. And
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  Speaker 1: what I'm giving you is what's called the book value
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  Speaker 1: for Fugger. That's just everything he owned minus what he
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  Speaker 1: owed other people. Now, Elon's, if you just look at Tesla's,
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  Speaker 1: Tesla sells for about 13 times its book value. In SpaceX,
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  Speaker 1: we didn't even know what the book value is, but
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  Speaker 1: that sells at an even higher multiple. So if we
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  Speaker 1: were to apply the same sort of math to Fugler's
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  Speaker 1: book value, he would be worth about $ 4 trillion more.
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  Speaker 3: Wow.
• 4:46
  Speaker 1: Compared to poor Elon at only $ 900 billion.
• 4:48
  Speaker 2: God, pathetic. Elon needs to get his finger out, really.
• 4:51
  Speaker 3: I'm more curious, to be honest, about where he came
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  Speaker 3: from and how he got this money.
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  Speaker 1: He was born in the right place at the right time. Augsburg,
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  Speaker 1: let's say maybe it's sort of a distant suburb of Munich,
• 5:02
  Speaker 1: takes an hour by train to get there. At the time,
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  Speaker 1: it was a great place. It was at the crossroads
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  Speaker 1: between Venice, which handled all that Silk Road business, and
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  Speaker 1: the rest of Europe. It was fairly close to the
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  Speaker 1: passes you needed to get over the Alps. But you
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  Speaker 1: could also get access up to the north, up to
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  Speaker 1: the Netherlands, Belgium. So that was a good place to be.
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  Speaker 1: Augsburg had carved out a niche as a textile center.
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  Speaker 1: That put Augsburg in a good place to build industry.
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  Speaker 1: And from that, we had banking. Another advantage that Augsburg has,
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  Speaker 1: it was an imperial city. Instead of answering to a
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  Speaker 1: duke or a bishop, it would answer directly to the emperor.
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  Speaker 1: And that gave them a lot of freedom. So they
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  Speaker 1: could pursue their capitalist dreams in a way that the
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  Speaker 1: city controlled by a bishop or a prince could not.
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  Speaker 1: So he was in the right place at the right time.
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  Speaker 1: His grandfather was a peasant, moved to Augsburg. with a
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  Speaker 1: bunch of looms, got into the textile business, started getting
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  Speaker 1: other people to make textiles for him. And from that,
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  Speaker 1: they got into financing. So Jacob and the third generation
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  Speaker 1: took everything to a much higher level.
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  Speaker 3: And just to go back, this was in 1367 that
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  Speaker 3: the grandfather Hans Fugger moved to Augsburg. So we're talking
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  Speaker 3: about really the 14th and 15th century as they developed.
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  Speaker 1: His grandfather lived in sort of the outskirts of town.
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  Speaker 1: Every day, the city walls would open up. All the
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  Speaker 1: peasants would come streaming in. They'd do what they had
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  Speaker 1: to do in town, provide services for the rich people
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  Speaker 1: who lived behind the city walls. And then at night,
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  Speaker 1: they would get kicked out again, shoot out the back door.
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  Speaker 1: His grandfather made enough money that he was able to
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  Speaker 1: afford living within the city itself. And then his mother,
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  Speaker 1: she was a great businesswoman in her own right. because
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  Speaker 1: it was an imperial city, women could own businesses, they
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  Speaker 1: could sign contracts, and she kept the thing together.
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  Speaker 2: I promise this is my only off-color joke here, but
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  Speaker 2: isn't there some funny gag about when Hans Fugger first
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  Speaker 2: arrives in Augsburg and how his name is written down
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  Speaker 2: in the tax registry?
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  Speaker 1: The Latin name is fucker, okay? Let's say it.
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  Speaker 2: Yes, let's get it out there. Sorry, I was pushing
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  Speaker 2: for it.
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  Speaker 5: Let's get it out there. And.
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  Speaker 1: Some argue that the derivation of the word fucker came
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  Speaker 1: from Fugger. You know, it's a disparaging comment about bankers.
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  Speaker 5: Oh, wow.
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  Speaker 2: That is amazing trivia.
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  Speaker 1: I didn't know that. I don't know what you think
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  Speaker 1: about bankers, but some people describe them with the F word.
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  Speaker 2: Yes, exactly. It was lots of people's favorite word. And
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  Speaker 2: if it derives from banking, then y'all can figure that's fantastic.
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  Speaker 2: I love that. Okay, so Jacob is born in 1459 Augsburg,
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  Speaker 2: and it's a wealthy town. It's kind of a metropolis, really,
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  Speaker 2: at least for the era. What kind of childhood did
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  Speaker 2: he have? Was he spoiled, or were the Fuggers quite strict?
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  Speaker 1: I don't know, but I imagine as the 10th of
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  Speaker 1: 10 children, and being a young boy, he probably was spoiled.
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  Speaker 1: But on the other hand, the Fuggers hadn't returned one
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  Speaker 1: of their own to the priesthood. And Jacob was the
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  Speaker 1: one designated to go into the priesthood. And he was
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  Speaker 1: all set to do that. But then his mother recognized
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  Speaker 1: that he had a talent for business. And she sent
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  Speaker 1: him down to Venice to work in the German trading
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  Speaker 1: house there. And the Fondaco de Tedesco, whatever it was
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  Speaker 1: called down in Venice, served as the Harvard Business School
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  Speaker 1: of the day. Not only because of the knowledge you
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  Speaker 1: would pick up there, but because of the connections you
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  Speaker 1: could make.
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  Speaker 3: Tell us a bit more about why Venice in particular.
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  Speaker 3: Why was it like Harvard Business School at this time?
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  Speaker 1: Geography. Venice was as far north as you could get
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  Speaker 1: in that Mediterranean area to the rest of Europe. It
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  Speaker 1: was also being on the eastern side of the Italian boot.
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  Speaker 1: The closest you could be to the Silk Road and
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  Speaker 1: all the trade coming in from there. Venice, like Augsburg,
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  Speaker 1: was structured as a city-state. They could make their own rules.
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  Speaker 1: They were also very much driven by the profit motive.
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  Speaker 1: They wanted to make as much money as they can.
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  Speaker 1: They had all this trade coming in. They had the spices.
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  Speaker 1: They had the textiles. They had everything coming from the.
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  Speaker 5: East.
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  Speaker 1: And it was the crossroads. There is no greater financial
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  Speaker 1: center on Earth.
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  Speaker 2: And they loved finance in Venice, right? They were incredibly
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  Speaker 2: inventive and creative.
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  Speaker 1: Yeah. The Italians, they set the standards for banking and bookkeeping.
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  Speaker 1: Fugger learned accounting in Venice. And that was very important
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  Speaker 1: because unlike a lot of German merchants of his day,
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  Speaker 1: he was very meticulous in how he kept his books
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  Speaker 1: and kept his numbers. And he was honest with himself.
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  Speaker 1: If someone wasn't going to pay him back, he wrote
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  Speaker 1: it down. The other, his competitors just wrote numbers here
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  Speaker 1: and there on little scraps of paper and forgot what
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  Speaker 1: they had. Now, what Fugger did with bookkeeping, he took
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  Speaker 1: it to an even higher level because he was the
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  Speaker 1: first one to create a consolidated balance sheet. So he
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  Speaker 1: got a big picture view of his financial situation at
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  Speaker 1: any moment in time. Other people didn't have that. So
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  Speaker 1: he could make better decisions because he had better information.
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  Speaker 3: I'm a bit confused, though, because there was this flourishing
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  Speaker 3: financial industry then. But wasn't there a ban in Christianity
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  Speaker 3: at the time on charging interest or usury? How did
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  Speaker 3: they get around that?
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  Speaker 1: Well, they fudged. We have Islamic banking today, and there's
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  Speaker 1: workarounds for that. They were doing workarounds. But where this
• 11:03
  Speaker 1: gets interesting is Fugger, like all the other bankers, knew
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  Speaker 1: that they were sort of in a gray area. And
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  Speaker 1: this comes later in Fugger's life. But Fugger lobbied. to
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  Speaker 1: get Rome to change the rules. The Pope came out
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  Speaker 1: with a decree that says, okay, you can charge interest
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  Speaker 1: if you're putting your own money at risk. And the Pope,
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  Speaker 1: as the representative of God on earth, could put out
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  Speaker 1: these rules and people believed that that was the voice
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  Speaker 1: of God speaking. And Fugger got the voice of God
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  Speaker 1: to legalize money lending and make the world safe for banking.
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  Speaker 1: So we have him to thank for that.
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  Speaker 3: 15th century equivalents are trying to lobby the Basel Banking Committee.
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  Speaker 3: on behalf of the banks or something like that. I mean,
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  Speaker 3: it sounds crazy. So if we go to the 1480s,
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  Speaker 3: we've got Jacob leaving Venice and he starts working for
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  Speaker 3: the family firm with his brothers Ulrich and Georg. Are
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  Speaker 3: they still dabbling in cloth or have they moved beyond
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  Speaker 3: nice soft shirts?
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  Speaker 1: They're dabbling in everything. They had a monopoly on a
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  Speaker 1: Brazilian tree bark that was a supposed cure for syphilis. Jewels, textiles, spices...
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  Speaker 1: And then, of course, mining, which was the basis of
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  Speaker 1: their giant fortune.
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  Speaker 2: Yeah, because this is where the Habsburgs come into our tale, right?
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  Speaker 2: Because they really are the enabling force or they have
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  Speaker 2: a mutually beneficial relationship. And they're the ones that really
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  Speaker 2: help the Fugger family get into metal mining and silver
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  Speaker 2: in particular. Can you tell us a bit about maybe
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  Speaker 2: the Habsburgs, like who they were and why we care
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  Speaker 2: so much about them?
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  Speaker 1: Well, the Habsburgs were not a big deal when Jacob
• 12:45
  Speaker 1: got to know them. They had some territory around Innsbruck.
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  Speaker 1: They had some territory near Salzburg. And that was about it.
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  Speaker 1: But they had something else that was very important. They
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  Speaker 1: had the Holy Roman Empire ship. One of their own
• 13:04
  Speaker 1: was the Holy Roman Emperor. And that gave him... some
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  Speaker 1: authority with the Pope.
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  Speaker 2: Greg, just quickly, can you tell us who is the
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  Speaker 2: Holy Roman Emperor? What is that as a concept?
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  Speaker 1: The Pope was in charge of the spiritual well-being of
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  Speaker 1: the people and needed a secular equivalent to keep things
• 13:29
  Speaker 1: straight in the material world. And that person was dubbed
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  Speaker 1: the Holy Roman Emperor. The leader of the family at
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  Speaker 1: the time was a guy named Sigmund. who lived near Salzburg.
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  Speaker 1: His claim to fame was he had a bunch of
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  Speaker 1: gold and silver mines in his territory. He came up
• 13:48
  Speaker 1: with a coin that later became called the Thaler, which
• 13:51
  Speaker 1: we now know as the dollar. So Sigmund, his one
• 13:54
  Speaker 1: contribution to history with that, Germany was a thousand different municipalities,
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  Speaker 1: bishoprics and principalities, you name it. The Holy Roman Emperor
• 14:04
  Speaker 1: was the glue that held Germany together It was a
• 14:07
  Speaker 1: big deal. And with being the emperor came some privileges.
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  Speaker 1: It came a lot of respect. He was a bad king.
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  Speaker 1: He spent all his money on himself, built himself a
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  Speaker 1: lot of castles. Bankers didn't want to lend to him.
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  Speaker 1: And this is how Fugger got his foot in the door.
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  Speaker 1: At a time when everyone else was refusing to give
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  Speaker 1: him any money, Fugger stepped up, took enormous risk, made
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  Speaker 1: loans to this guy. But again, here's part of Fugger's genius.
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  Speaker 1: he wrote very strict contract terms. And he made sure
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  Speaker 1: that he would get paid back because he put himself
• 14:42
  Speaker 1: in charge of the mines. So he saw everything that
• 14:45
  Speaker 1: was going in and going out. And the first person
• 14:47
  Speaker 1: who got paid when you sold the ore, which he
• 14:50
  Speaker 1: did himself, was himself. So he took enormous risks. As
• 14:54
  Speaker 1: a young man, when no one else wanted to loan
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  Speaker 1: money to the Habsburgs, he was there and he maintained
• 14:59
  Speaker 1: that relationship. The Habsburgs recognized that this guy was special.
• 15:03
  Speaker 1: And there was a A younger Habsburg coming up from Innsbruck, Maximilian.
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  Speaker 1: And when the time came, Fugger and Maximilian worked out
• 15:14
  Speaker 1: a deal where they cut Sigmund off at the knees
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  Speaker 1: and Maximilian became Fugger's client.
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  Speaker 3: So in about 1487, the Fugger start giving loans to Sigismund.
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  Speaker 3: And they're initially quite small, but they get bigger and
• 15:30
  Speaker 3: bigger and bigger and end up being absolutely critical for
• 15:32
  Speaker 3: the development of the Fugger family. Why on earth did
• 15:35
  Speaker 3: the Fuggers want to give him any money at all?
• 15:37
  Speaker 3: It doesn't sound like a very good credit risk.
• 15:38
  Speaker 1: Well, they had a lot of silver. They're sitting on
• 15:41
  Speaker 1: top of the biggest silver mine in Europe. As long
• 15:45
  Speaker 1: as Fugger was getting collateralized and he was able to
• 15:49
  Speaker 1: sell that ore and get repaid, he was willing to
• 15:53
  Speaker 1: take that risk. Now, then as now, sovereign credit is
• 15:59
  Speaker 1: a very risky thing. You loan to a government, the
• 16:02
  Speaker 1: government defaults, you're in trouble. And in those days it
• 16:06
  Speaker 1: was even riskier because the emperor or the king or
• 16:10
  Speaker 1: whoever it was, they could just decide not to pay
• 16:13
  Speaker 1: back and just throw you in jail, chain you up
• 16:17
  Speaker 1: and throw you away and, and even execute you, which,
• 16:20
  Speaker 1: which happened in some case with lenders. But, uh, Habsburgs
• 16:24
  Speaker 1: recognized that they needed Fugger as much as he needed them.
• 16:28
  Speaker 1: I think this is what really made Fugger different than
• 16:32
  Speaker 1: everyone else. He made himself indispensable.
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  Speaker 2: So it sounds like the Fuggers and Jakob Fugger eventually,
• 16:38
  Speaker 2: you know, they cut some kind of deals and made
• 16:40
  Speaker 2: sure they had collateral. They were clever about it. But
• 16:45
  Speaker 2: how could they even afford the loans? I mean, they
• 16:47
  Speaker 2: were lending to the holding Roman emperor's family, basically. And
• 16:51
  Speaker 2: they were wealthy people. cloth merchants mainly, but how much
• 16:55
  Speaker 2: capital did they really have at hand at the time?
• 16:58
  Speaker 1: They were a bank like any other bank. They took deposits.
• 17:03
  Speaker 1: And in those days, what are you going to do
• 17:06
  Speaker 1: if you have money? You could put it in the mattress.
• 17:10
  Speaker 1: You could turn it into silver plate and keep it
• 17:12
  Speaker 1: in a drawer somewhere. Or you could earn some interest
• 17:16
  Speaker 1: on it by giving it to Fugger. So he was
• 17:19
  Speaker 1: a real modern bank in that sense. But also as
• 17:25
  Speaker 1: more ore came out of the ground, that he just
• 17:28
  Speaker 1: had more money and he could put that money to work.
• 17:31
  Speaker 2: So he basically recycled the profits from his other businesses
• 17:35
  Speaker 2: and other depositors and the money he was making from Sigismund.
• 17:40
  Speaker 2: And put that back into the lending business constantly, basically
• 17:43
  Speaker 2: to grow that. Okay.
• 17:44
  Speaker 5: Yeah.
• 17:44
  Speaker 1: It was like any other business. You take your money
• 17:47
  Speaker 1: at the end of the year and you can either
• 17:49
  Speaker 1: deploy the cash for growth or pay yourself dividends. He
• 17:53
  Speaker 1: used it all to grow the business.
• 17:55
  Speaker 2: Okay. Well, Sigismund, obviously, as you mentioned, is atrocious with money.
• 18:00
  Speaker 2: And he actually retires in disgrace in 1490. And he
• 18:04
  Speaker 2: has to give up this Tyrolean silver mine. And then
• 18:07
  Speaker 2: in 1493... Frederick dies, the Holy Roman Emperor himself, and
• 18:13
  Speaker 2: his son Maximilian becomes the new emperor. And he's a
• 18:17
  Speaker 2: really important character in this story, right? Can you tell
• 18:20
  Speaker 2: us a bit more about Emperor Maximilian?
• 18:23
  Speaker 1: Maximilian had dreams of greater things for the Habsburgs. He
• 18:28
  Speaker 1: wanted to accumulate titles and he wanted to accumulate land.
• 18:31
  Speaker 1: And he really wanted to assert his authority in Italy. Now,
• 18:36
  Speaker 1: Italy was technically part of the Holy Roman Emperor, but
• 18:39
  Speaker 1: they didn't want any part of Austrians ruling them. So
• 18:43
  Speaker 1: Venice fought back. Milan, in particular, fought back. Rome, which
• 18:47
  Speaker 1: was a power under itself, they didn't want to be
• 18:50
  Speaker 1: ruled by Austrians. But Maximilian kept trying. And he needed
• 18:56
  Speaker 1: money to fight his wars in Italy. And Fugger was
• 18:59
  Speaker 1: the one who gave him the loans when he thought
• 19:03
  Speaker 1: that he could get repaid and when he thought that
• 19:06
  Speaker 1: Maximilian could be successful.
• 19:08
  Speaker 3: So the Fuggers stick with Maximilian and they get a
• 19:11
  Speaker 3: lot of mining privileges, smart business deal, but then they
• 19:15
  Speaker 3: get more ambitious. Tell us about how they moved beyond
• 19:19
  Speaker 3: the Tyrol and the world of silver.
• 19:21
  Speaker 1: Well, the Habsburgs also controlled what later became the Habsburg
• 19:26
  Speaker 1: Empire in Eastern Europe. In places like Romania and Hungary,
• 19:32
  Speaker 1: What's now the Czech Republic, there's a lot of copper.
• 19:37
  Speaker 1: Fugger starts making the same sort of loans to the
• 19:40
  Speaker 1: Habsburgs in copper country in the mountains there. And he
• 19:46
  Speaker 1: brings something else to the party. He brings technology. He
• 19:49
  Speaker 1: hired the best. mining engineers that he could get. In particular,
• 19:54
  Speaker 1: he hired one guy who had a special way of
• 19:58
  Speaker 1: pumping water out of the mines, which created much higher
• 20:01
  Speaker 1: yields from those mines. So what Fugri did in silver,
• 20:04
  Speaker 1: he repeated in copper. Copper was, again, scarce the world over,
• 20:09
  Speaker 1: except in that part of Europe. And this took Fugger's
• 20:13
  Speaker 1: business to a whole new level.
• 20:15
  Speaker 2: So by 1504, I think it was, the Fugger company
• 20:19
  Speaker 2: is already one of the biggest in Europe. But I'm curious,
• 20:21
  Speaker 2: I mean, there are other people that control silver and
• 20:24
  Speaker 2: copper interests and cloth. I'm curious what you think was
• 20:28
  Speaker 2: the secret source behind the Fugger family's success. Why were
• 20:32
  Speaker 2: they so large by that point and already very influential?
• 20:36
  Speaker 1: There wasn't that much copper and silver around. Schluger was
• 20:41
  Speaker 1: able to convince the Habsburgs to use him more than
• 20:45
  Speaker 1: anyone else.
• 20:46
  Speaker 2: And he had that beautiful comprehensive balance sheet as well.
• 20:49
  Speaker 2: He was an incredible bookkeeper, right?
• 20:51
  Speaker 1: Because he had so much money, he had branches all
• 20:54
  Speaker 1: over Europe. And unlike any other banker in Europe, he
• 20:58
  Speaker 1: could just do bookkeeping entries, sort of like wire transfers today.
• 21:02
  Speaker 1: Instead of having to put gold in the back of
• 21:05
  Speaker 1: a cart and hauling it to the next city to
• 21:07
  Speaker 1: pay someone, he could just send a letter to his
• 21:11
  Speaker 1: branch manager in another country or another city and say, okay,
• 21:15
  Speaker 1: credit this guy's account and debit the other side. That
• 21:19
  Speaker 1: gave him an advantage too. He was the first one
• 21:21
  Speaker 1: to ever do that.
• 21:22
  Speaker 2: After the break, let's turn to how Yarka becomes the
• 21:26
  Speaker 2: leader of the family company, helps the Habsburgs basically take
• 21:30
  Speaker 2: over half of Europe, inadvertently starts the reformation and also
• 21:36
  Speaker 2: starts the first social housing project in history. That's all
• 21:40
  Speaker 2: after the break.
• 21:47
  Speaker 5: Investors today are most worried about three key factors, interest rates,
• 21:52
  Speaker 5: the corporate credit cycle and the impact of artificial intelligence.
• 21:56
  Speaker 5: Artificial intelligence is impacting the jobs market and corporate margins.
• 22:00
  Speaker 5: Interest rates are of concern because people are wondering when
• 22:02
  Speaker 5: will the Fed start to raise or lower interest rates again?
• 22:06
  Speaker 5: And finally, the corporate credit cycle. If the economy is
• 22:09
  Speaker 5: to weaken, what does that mean for the ability of
• 22:11
  Speaker 5: corporate credit to hold up? We are thinking about the
• 22:14
  Speaker 5: next generation and constantly adapting our portfolios to meet their needs.
• 22:24
  Speaker 2: And we are back. And we are talking about Jakob Fugger,
• 22:28
  Speaker 2: the richest dude in history, apparently. He controlled a vast... silver,
• 22:35
  Speaker 2: copper empire. He started a bank. He started bankrolling the
• 22:39
  Speaker 2: Holy Roman Emperor and the Habsburgs. It's now 1510 and
• 22:44
  Speaker 2: change is afoot in Europe and not least in Jakob
• 22:48
  Speaker 2: Fugge's own family because both of his brothers have died
• 22:51
  Speaker 2: at this point. And Jakob decides to buy out basically
• 22:54
  Speaker 2: his brother's ears, making him the sole operator of the
• 22:59
  Speaker 2: family firm. How exactly does he manage to squeeze all
• 23:03
  Speaker 2: his nephews out of the business, Craig?
• 23:05
  Speaker 1: Well, they recognized that he was better than they were.
• 23:09
  Speaker 1: He wrote up a contract, summoned them all to a meeting.
• 23:14
  Speaker 1: They grumbled. But at the end of the day, they
• 23:16
  Speaker 1: realized that it was also in their interest to let
• 23:19
  Speaker 1: the genius run the business and make them even richer.
• 23:23
  Speaker 3: He actually has, I've got a bit of Jakob's own
• 23:26
  Speaker 3: words here, which says, quote, I have determined to carry
• 23:30
  Speaker 3: on and manage the business myself and to take industriously
• 23:34
  Speaker 3: in hand my two brothers' sons. Furthermore, shall my above-mentioned
• 23:40
  Speaker 3: four nephews collectively recognize and look upon me as a
• 23:44
  Speaker 3: head of this my business, together which such trades as
• 23:48
  Speaker 3: I give them to do and accomplish. Well, it sounds
• 23:51
  Speaker 3: like a very polite way of saying I'm going to
• 23:52
  Speaker 3: be a little dictator. And by the way, you have
• 23:56
  Speaker 3: no choice.
• 23:56
  Speaker 2: I mean, honestly.
• 23:57
  Speaker 1: By the way, you have no choice. Yeah, if they
• 23:59
  Speaker 1: ever did a TV show about the Fugers, that would
• 24:02
  Speaker 1: be a great scene.
• 24:03
  Speaker 2: The borderline drama.
• 24:05
  Speaker 3: Is this like sort of, you know, succession meets Sopranos
• 24:07
  Speaker 3: kind of thing?
• 24:08
  Speaker 1: It's succession with the genius and some idiot relatives surrounding him.
• 24:14
  Speaker 2: Exactly. Well, in this case, the idiot relatives probably realized
• 24:17
  Speaker 2: that they should just cede everything to Jakob Fugger, of course.
• 24:20
  Speaker 1: Yeah, idiots, too harsh. They had the... the wherewithal to
• 24:24
  Speaker 1: realize that this was in their best interest too.
• 24:27
  Speaker 3: So what does the now extraordinarily powerful mini dictator, Jakob Fugger,
• 24:32
  Speaker 3: actually do with his new control?
• 24:34
  Speaker 1: He uses it to make more money and he uses
• 24:37
  Speaker 1: it to build his influence and do more than just
• 24:43
  Speaker 1: finance the Habsburgs. He takes on the Hanseatic League, which
• 24:50
  Speaker 1: controlled all the northern trade routes. They had monopoly in
• 24:53
  Speaker 1: the North Sea. Frege didn't like that. He found a
• 24:58
  Speaker 1: way to confront them and attack them and steal a
• 25:02
  Speaker 1: lot of their business. He gets involved with lending to
• 25:06
  Speaker 1: other monarchs. He gets involved with lending to the Pope.
• 25:10
  Speaker 1: And he diversifies.
• 25:12
  Speaker 2: Tell us about the papacy. I mean, you talk about
• 25:14
  Speaker 2: how early he'd lobbied quite successfully with the Pope. Is
• 25:17
  Speaker 2: it true that he'd bankroll literally the Vatican itself?
• 25:21
  Speaker 1: He bankrolled a number of popes. I think he had
• 25:23
  Speaker 1: a relationship with five different popes. And he would, the
• 25:29
  Speaker 1: same way with the Habsburgs, he would get collateral and
• 25:34
  Speaker 1: he would loan them money. Now, the papacy back then
• 25:38
  Speaker 1: was much different than it is today, right? It pretended
• 25:41
  Speaker 1: to have a spiritual side, but they were just in
• 25:44
  Speaker 1: it for power. They were in it for money. There's
• 25:47
  Speaker 1: a famous pope, Leo, that Fugger did business with who said,
• 25:51
  Speaker 1: God has given us the papacy. Let us now enjoy it.
• 25:54
  Speaker 1: They had an army. They were interested in accumulating power.
• 26:01
  Speaker 1: And they were able to use the hold they had
• 26:04
  Speaker 1: on the people to make themselves more powerful and make
• 26:08
  Speaker 1: even more money. And Jacob saw them not as a
• 26:12
  Speaker 1: spiritual authority. He saw them as one more customer.
• 26:17
  Speaker 2: Yeah.
• 26:17
  Speaker 1: And because they had a lot of money and territory,
• 26:20
  Speaker 1: they were a good customer.
• 26:21
  Speaker 2: Okay, so at this point, Jakob Fugger is already a
• 26:24
  Speaker 2: hugely influential figure in Europe. He's caught his claws in
• 26:28
  Speaker 2: virtually everything from the Holy Roman Emperor's family to the papacy.
• 26:33
  Speaker 2: But then Maximilian I dies. The head of the Habsburgs,
• 26:37
  Speaker 2: the Holy Roman Emperor himself, passes away. And it's 1519.
• 26:42
  Speaker 2: And by that point, he owes Jakob Fugger a staggering 350,000 guilders.
• 26:49
  Speaker 2: That's almost $ 700 million in today's terms. And that's obviously
• 26:54
  Speaker 2: a huge problem for Jakob, because you can have the
• 26:56
  Speaker 2: most detailed balance sheet you want, but if suddenly a
• 27:00
  Speaker 2: massive chunk of it potentially becomes imperiled, well then you
• 27:03
  Speaker 2: might struggle. He's deeply entrenched with the Habsburgs, he's very
• 27:07
  Speaker 2: exposed to this debt, and Jakob realises what he wants
• 27:12
  Speaker 2: is for Maximilian's grandson, Charles, to succeed him as Holy
• 27:17
  Speaker 2: Roman Emperor, and thereby maybe keeping those debts current, saving
• 27:22
  Speaker 2: his financial empire. But the Holy Roman Emperor, it's very
• 27:26
  Speaker 2: inconveniently elected instead of being appointed. So, Greg, I'm curious,
• 27:31
  Speaker 2: what does Jacob do next to make sure that his
• 27:35
  Speaker 2: favoured successor ascends to the Holy Roman Emperor throne, as
• 27:40
  Speaker 2: it were?
• 27:40
  Speaker 1: Well, there is a bidding war to become Holy Roman Emperor.
• 27:44
  Speaker 1: The contest came down to Francis I of France, and
• 27:49
  Speaker 1: even Henry VIII got involved. And Jacob did have some
• 27:52
  Speaker 1: negotiations with Henry about this. But at the end of
• 27:56
  Speaker 1: the day, it was clear to everyone that he would
• 27:58
  Speaker 1: stay with the Habsburgs. So he bribes these seven electors.
• 28:04
  Speaker 1: to make sure that Charles becomes Maximilian's successor and that
• 28:09
  Speaker 1: the Habsburgs retain the imperial dignity and have the resources
• 28:15
  Speaker 1: to keep paying back.
• 28:16
  Speaker 3: So essentially, he bought an election.
• 28:18
  Speaker 1: He bought an election. But before that, and this is important,
• 28:22
  Speaker 1: he made the Habsburgs what they became by arranging some marriages,
• 28:27
  Speaker 1: by financing the marriage of Charles and merging the Austrian
• 28:32
  Speaker 1: territories with Spain. which was much bigger economically at the
• 28:37
  Speaker 1: time because of all the trading that Spain was doing. Remember,
• 28:40
  Speaker 1: this is the time of Columbus, right? And Spain was
• 28:42
  Speaker 1: very important. And it was great for Fugger's financial health
• 28:48
  Speaker 1: to have not only the Austrian assets to back the loans,
• 28:52
  Speaker 1: but also the Spanish assets, and hence the New World assets.
• 28:56
  Speaker 3: So he's buying elections. He's commercially and financially dominant. I mean,
• 29:00
  Speaker 3: it puts anything that a Silicon Valley super PAC might
• 29:03
  Speaker 3: do sort of into sharp relief. But I'm curious, I mean,
• 29:06
  Speaker 3: at one point, by the way, he also has no
• 29:08
  Speaker 3: scruples about letting Charles know how much he depends on
• 29:12
  Speaker 3: him vis-a-vis the election. He actually writes in 1523, we
• 29:18
  Speaker 3: have a letter here which says, basically, it is well
• 29:21
  Speaker 3: known that your imperial majesty could not have attained the
• 29:25
  Speaker 3: crown without me, basically. You know, I don't know whether
• 29:29
  Speaker 3: anyone's written that to Donald Trump, but there you go.
• 29:32
  Speaker 3: What kind of personality was he by then? I mean,
• 29:34
  Speaker 3: was he sort of an Elon Musk type character of
• 29:37
  Speaker 3: his day?
• 29:38
  Speaker 1: Oh, for sure. And that letter, he's writing to someone
• 29:42
  Speaker 1: who the common people regard as a god almost, right?
• 29:46
  Speaker 1: People would come up and try to touch the Holy
• 29:48
  Speaker 1: Roman Emperor's robes thinking, okay, this is going to heal them.
• 29:52
  Speaker 1: Stoker was a glorified peasant. So here you have this
• 29:55
  Speaker 1: glorified peasant who is There's a risk of him being
• 29:59
  Speaker 1: hauled off in chains and having a hot poker shoved
• 30:02
  Speaker 1: through his cheek on the whim of the emperor. And
• 30:06
  Speaker 1: he's saying, listen, buddy boy, I gave you this money
• 30:09
  Speaker 1: in good faith. We have a contract. You got to
• 30:12
  Speaker 1: pay back or else. And the or else was, well,
• 30:15
  Speaker 1: I'm never going to loan you another dime. And someone
• 30:18
  Speaker 1: else is going to inherit the new world. And it's
• 30:19
  Speaker 1: not going to be you.
• 30:20
  Speaker 2: It does really kind of illustrate how powerful Jakob was
• 30:24
  Speaker 2: at the time. I mean, he's not just the banquet
• 30:27
  Speaker 2: of the most powerful family in Europe. He's basically controlling
• 30:31
  Speaker 2: large parts of Europe very directly. And at the peak
• 30:35
  Speaker 2: of this period, because like you say, there's so many
• 30:38
  Speaker 2: things going on in Europe at that time. It's just
• 30:40
  Speaker 2: an incredibly vibrant, interesting, dynamic period. Jakob Fugge's wealth also
• 30:46
  Speaker 2: gets tangled up with Martin Luther and his Protestant Reformation.
• 30:52
  Speaker 1: He's involved with the papacy at a time when Luther
• 30:56
  Speaker 1: comes to the fore. Now, remember what Luther did. He
• 31:00
  Speaker 1: created this list of demands and indictments of the papacy.
• 31:06
  Speaker 1: He nails his 95 thesis on the door of the
• 31:10
  Speaker 1: Wittenberg Cathedral. Why did he do this? Luther was really
• 31:13
  Speaker 1: pissed off about one thing. And he was pissed off
• 31:16
  Speaker 1: about the sale of indulgences, which were these pieces of
• 31:19
  Speaker 1: paper that people could buy that would give them a
• 31:22
  Speaker 1: golden ticket to reduce their time in purgatory after they died.
• 31:28
  Speaker 1: The indulgences came about, this was a financing scheme to
• 31:32
  Speaker 1: pay back Fugger. Fugger financed the election of a bishop
• 31:37
  Speaker 1: in one of these German principalities, bishoprics they were called.
• 31:42
  Speaker 1: And in order for the the newly elected bishop to
• 31:45
  Speaker 1: pay back Fugger, he had to come up with a
• 31:47
  Speaker 1: money raising scheme. They cooked up this deal to sell
• 31:52
  Speaker 1: these indulgences. It was a get out of jail free
• 31:54
  Speaker 1: card for people. Fugger and the bishop sent essentially salesmen
• 32:01
  Speaker 1: all over Germany to sell these things. There was the
• 32:05
  Speaker 1: salesman working for the bishop and there was Fugger's auditor
• 32:10
  Speaker 1: right behind him collecting the cash. And half of that
• 32:13
  Speaker 1: money went to the bishop and half of it went
• 32:17
  Speaker 1: to Fugger to get repaid on the loan. Luther was
• 32:20
  Speaker 1: horrified by this. He says, okay, this is the worst
• 32:24
  Speaker 1: thing we've ever seen come out of the church and
• 32:27
  Speaker 1: come out of Rome. That we're taking advantage of people's naivete.
• 32:31
  Speaker 1: You're telling them lies. You're telling them fake stories. You're
• 32:34
  Speaker 1: just trying to get money from what are already very
• 32:37
  Speaker 1: poor people. And this is what provoked Luther's to hang
• 32:41
  Speaker 1: the 95 Thesis, and that's what started the Reformation. And
• 32:45
  Speaker 1: we have a confrontation between Luther and Fugger. For one night,
• 32:51
  Speaker 1: Luther actually stayed in Fugger's palace, and Luther famously went
• 32:56
  Speaker 1: up before a tribunal with the emperor and refused to
• 33:02
  Speaker 1: take back any of his comments about Rome and the papacy,
• 33:05
  Speaker 1: where he famously said, here I stand, I can do
• 33:08
  Speaker 1: no other. I have to be true to my convictions.
• 33:12
  Speaker 1: Kill me if you must. But what you guys are
• 33:15
  Speaker 1: doing is wrong. And what they were doing that was
• 33:17
  Speaker 1: wrong was this scheme to pay back Fugger. But imagine
• 33:21
  Speaker 1: here's a banker who started probably the most seminal event
• 33:25
  Speaker 1: in European history, the Reformation. Wow.
• 33:28
  Speaker 3: But I mean, just to go back to Jacob again,
• 33:30
  Speaker 3: I mean, if we go back to the numbers, just
• 33:32
  Speaker 3: how rich was he by this point? Is it actually
• 33:37
  Speaker 3: lived wealth or just paper wealth?
• 33:40
  Speaker 2: Yeah, because he doesn't have like my kid's PlayStation 5,
• 33:42
  Speaker 2: for example. So how do we compare these things?
• 33:45
  Speaker 1: No, that's right. Not only did they not have a PlayStation,
• 33:48
  Speaker 1: they didn't have antibiotics. But he lived as well as
• 33:50
  Speaker 1: anyone could. He had indoor plumbing, right? That was unusual.
• 33:53
  Speaker 1: He had a palace. He had servants catering to his
• 33:57
  Speaker 1: every whim. He traveled around in grand style, not only
• 34:03
  Speaker 1: with his own carriage, but with an escort. He had
• 34:07
  Speaker 1: the finest clothes, anything possible. I don't think he cared
• 34:10
  Speaker 1: about this stuff, but he needed to show that he
• 34:13
  Speaker 1: was rich. And he did that in grand style.
• 34:17
  Speaker 2: Yeah. What kind of person did this make him, though?
• 34:19
  Speaker 2: Did he spend money on people other than himself at all?
• 34:22
  Speaker 1: He eventually started worrying about his soul and about his salvation.
• 34:28
  Speaker 1: He creates this idea to build the world's first social
• 34:33
  Speaker 1: housing project. Augsburg, like big cities today, there's a housing shortage.
• 34:39
  Speaker 1: He built 200 apartments in a nice sort of walled
• 34:43
  Speaker 1: off garden area of Augsburg where people could live for
• 34:49
  Speaker 1: just a nominal amount, almost nothing, to live in this thing.
• 34:55
  Speaker 1: And in return, they had to abide by Fugger's rules.
• 34:58
  Speaker 1: One of them is they couldn't be drunk. Another was
• 35:01
  Speaker 1: they had to be inside the walls of the complex
• 35:05
  Speaker 1: by midnight. And the third, and this is the most extraordinary,
• 35:08
  Speaker 1: they had to pray for Fugger three times a day.
• 35:13
  Speaker 1: And there were no other social housing complexes anywhere at
• 35:18
  Speaker 1: that time. And that housing complex, it's called the Fuggerai.
• 35:21
  Speaker 1: It's in Augsburg. Still to this day, there are people
• 35:24
  Speaker 1: living there paying the exact same nominal amount, not the
• 35:29
  Speaker 1: inflation adjusted amount, the nominal amount that Fugger was charging them.
• 35:34
  Speaker 1: And they have to continue to play by Fugger's rules,
• 35:37
  Speaker 1: whether any of them Actually, pray for him. I don't know.
• 35:41
  Speaker 1: But the thing still exists. And he was a pioneer
• 35:44
  Speaker 1: when it comes to social housing.
• 35:47
  Speaker 2: Well, as a one-time prospective priest, Jakob Fugger must have
• 35:52
  Speaker 2: known about the old saying from Jesus Christ that it's
• 35:55
  Speaker 2: easier for a camel to pass through the eye of
• 35:57
  Speaker 2: a needle than a rich person to get into heaven.
• 36:00
  Speaker 1: He knew scripture. He also knew about the restrictions on
• 36:04
  Speaker 1: money lending that are mentioned in Luke. But he believed
• 36:09
  Speaker 1: that the Lord would not have given him this ability
• 36:12
  Speaker 1: to make money if he didn't want him to use it.
• 36:15
  Speaker 1: So he was driven by what he thought was the
• 36:18
  Speaker 1: Lord's command for what he should do, which is a
• 36:22
  Speaker 1: great way if you want to sleep at night.
• 36:24
  Speaker 3: So at this point, Jacob looks almost invincible. He's dominating
• 36:29
  Speaker 3: European finance and politics. He's got all these people praying
• 36:33
  Speaker 3: for him and his social housing project. Everything is going
• 36:36
  Speaker 3: just right. But there's always a but. Just like everyone else,
• 36:41
  Speaker 3: it's not to last because in 1525, Jacob finally dies.
• 36:47
  Speaker 3: How exactly did he die?
• 36:49
  Speaker 1: He died alone. His wife was with her lover somewhere
• 36:54
  Speaker 1: else in town. She was quite a bit younger than
• 36:55
  Speaker 1: he was. And she had an affair for a long time.
• 37:01
  Speaker 1: I don't know if Jacob cared too much. He was
• 37:04
  Speaker 1: so consumed by work and making money. But he died alone.
• 37:07
  Speaker 1: Was he miserable? I don't know if he was miserable,
• 37:10
  Speaker 1: but it does remind me of the Rosebud scene in
• 37:14
  Speaker 1: Citizen Kane, where Kane is questioning, you know, why did
• 37:17
  Speaker 1: he do everything he did? I didn't think Fugger felt
• 37:20
  Speaker 1: that way. I think he was very happy and very
• 37:22
  Speaker 1: proud of his accomplishments. But what happened right before Fugger's
• 37:26
  Speaker 1: death is also interesting. We have the German Peasants' Revolt.
• 37:31
  Speaker 1: In 1522, thereabouts, it was the first mass revolt in
• 37:36
  Speaker 1: European history. Because of the printing press, people could communicate.
• 37:40
  Speaker 1: All of Germany went up in flames because of the Reformation.
• 37:43
  Speaker 1: The peasants with their pitchforks and torches were going after
• 37:47
  Speaker 1: the rich people and the rulers. Fugger financed the counterattack.
• 37:53
  Speaker 1: He wanted Rome, for business reasons, to stay in business.
• 37:57
  Speaker 1: He wanted the Habsburgs to retain their authority. he financed
• 38:02
  Speaker 1: the army that went after the peasants, and peasants were
• 38:06
  Speaker 1: shot down and bayoneted mercilessly to put an end to
• 38:10
  Speaker 1: this revolt. So at the end of Fugger's life, he
• 38:13
  Speaker 1: was fighting for not only his own survival, but the
• 38:17
  Speaker 1: survival of his business and everything that it stood for.
• 38:20
  Speaker 1: I talk about it as the first battle between capitalists
• 38:24
  Speaker 1: and communists. So it was a very tumultuous time when
• 38:28
  Speaker 1: Fugger died, but He dies with the fortune intact. He
• 38:33
  Speaker 1: had more money than he ever had at the time
• 38:36
  Speaker 1: of his death. He was very rich and that allowed
• 38:39
  Speaker 1: the family to continue.
• 38:40
  Speaker 3: Okay.
• 38:41
  Speaker 2: So he dies with more money than God in 1525,
• 38:46
  Speaker 2: but he has no sons, of course. He has no
• 38:48
  Speaker 2: children whatsoever, at least legitimate ones that we know of.
• 38:51
  Speaker 2: So the family business passes to his nephews, primarily one
• 38:56
  Speaker 2: chap called Anton. Can you tell us about Anton Fugger?
• 38:59
  Speaker 2: Because this isn't a classic case of the family genius
• 39:03
  Speaker 2: dying and the younger generation blowing the fortune. Anton actually
• 39:07
  Speaker 2: was quite competent.
• 39:08
  Speaker 1: Yeah. Anton knew what he was doing. That was good
• 39:12
  Speaker 1: because things got bad. Anton is in very deep with
• 39:16
  Speaker 1: the Habsburgs and that, that goes along fine for a while.
• 39:21
  Speaker 1: But then in 1557, which is, uh, A long time
• 39:26
  Speaker 1: after Jacob has left the scene, Philip II who is
• 39:30
  Speaker 1: Maximilian's successor, goes bankrupt. 1557, Philip II takes Spain into bankruptcy.
• 39:38
  Speaker 1: Anton is left scrambling to save the business. Now he
• 39:41
  Speaker 1: does it. He restructures the He gets a monopoly on
• 39:47
  Speaker 1: the mercury business in Spain, which is important because that's
• 39:51
  Speaker 1: how you extract silver from ore. You need mercury. But
• 39:55
  Speaker 1: the Fugers had 40% of all the money that Spain
• 40:03
  Speaker 1: and the Habsburgs and Philip II owed, 40% of that
• 40:06
  Speaker 1: was to the Fugers. It was a very dangerous time. Now,
• 40:10
  Speaker 1: Anton must have been a very gifted business person in
• 40:13
  Speaker 1: his own right because he keeps his the family business intact.
• 40:17
  Speaker 2: I mean, this 1557 default of Spain, I think parts
• 40:20
  Speaker 2: of the Netherlands, the Dutch states and France also defaulted then.
• 40:25
  Speaker 2: Some historians have seen called it the Trinity default. This
• 40:27
  Speaker 2: is the biggest wave of sovereign defaults in history. It's
• 40:30
  Speaker 2: like the US and Japan and China all defaulting all
• 40:35
  Speaker 2: together at the same time. So it caused immense financial
• 40:38
  Speaker 2: turbulence in Europe at the time. Looking back from our
• 40:42
  Speaker 2: vantage point in history, what about the lasting legacy of Fugger?
• 40:47
  Speaker 2: How did they really change the course of history? Did they?
• 40:50
  Speaker 2: Was it the Reformation? Was it something else? How important
• 40:53
  Speaker 2: are they on the grand scheme?
• 40:56
  Speaker 1: I think they are hugely important. If the Reformation hadn't occurred,
• 41:01
  Speaker 1: what would Europe look like today? What if What if
• 41:06
  Speaker 1: we weren't allowed to loan money and interest? Where would
• 41:09
  Speaker 1: we be today? These are enormous changes that Fugger brought about.
• 41:13
  Speaker 1: And it's hard for me to come up with comparables
• 41:17
  Speaker 1: because we were always told in history class, there is
• 41:20
  Speaker 1: nothing bigger than the Reformation, the French Revolution, the Reformation.
• 41:24
  Speaker 1: These were the things that changed humanity forever, took us
• 41:29
  Speaker 1: into the modern world. And Fugger was at the center
• 41:33
  Speaker 1: of one of them.
• 41:34
  Speaker 2: So Greg, I mean, we hear a lot about the Rothschilds,
• 41:37
  Speaker 2: of course, but also the Medicis, these big imperial banking
• 41:41
  Speaker 2: families that are still famous today. But the Fuggers, they
• 41:46
  Speaker 2: aren't nearly as well known. I'm curious why you think
• 41:49
  Speaker 2: that is? Why don't people know about the Fuggers?
• 41:52
  Speaker 1: People are remembered for making money. They're remembered for what
• 41:54
  Speaker 1: they do with it. So if you're devote your life
• 41:58
  Speaker 1: to philanthropy at the end, you remembered. The Medici's, they
• 42:01
  Speaker 1: bought a lot of art. They were great patrons of
• 42:03
  Speaker 1: the art. Fugger, he had a housing development. That's great.
• 42:07
  Speaker 1: But had he been the leading patron of the artists
• 42:10
  Speaker 1: of his day, had he done something where he was
• 42:14
  Speaker 1: able to name something after himself that endured on a
• 42:17
  Speaker 1: massive scale, then we're remembering. The fact that the family
• 42:21
  Speaker 1: still has money, to me, is incredible. How many generations? 22? 25?
• 42:27
  Speaker 3: I'm curious, how do the figures compare to other dynasties today?
• 42:30
  Speaker 3: I mean, not just the Murdochs or the Rothschilds, but even, say,
• 42:34
  Speaker 3: the Trumps.
• 42:35
  Speaker 1: He didn't want to be a political power. He wanted
• 42:38
  Speaker 1: to be the money behind the throne. He didn't care
• 42:42
  Speaker 1: about power. He cared about money. And money gave him
• 42:46
  Speaker 1: power to make more money. So he also wasn't interested
• 42:52
  Speaker 1: in self-promotion, making a name for himself. He wanted people
• 42:57
  Speaker 1: to know that he was rich. He would make displays
• 43:00
  Speaker 1: of wealth to prove that he was rich. I think
• 43:02
  Speaker 1: that the Trumps, that's not a good comparison. I, I
• 43:06
  Speaker 1: think there, he has more, he's got some Elon in him.
• 43:10
  Speaker 1: He's got some Buffett in him in terms of, you know,
• 43:13
  Speaker 1: capital allocation, the ambition of, of Elon, the technical skills,
• 43:19
  Speaker 1: I think of, of both of those guys, uh, But
• 43:22
  Speaker 1: you can point to a lot of billionaires. All billionaires
• 43:25
  Speaker 1: have a few things in common. One, they're very good
• 43:27
  Speaker 1: at making money. Two, they believe they deserve to have
• 43:29
  Speaker 1: all that money. And Fugger had both of those traits.
• 43:34
  Speaker 3: Three things I take away from this is that one,
• 43:36
  Speaker 3: autocratic control is often very useful for billionaires trying to
• 43:40
  Speaker 3: make their mark. Secondly, they need to not only have
• 43:45
  Speaker 3: control of commercial operations, but finance too and politics.
• 43:51
  Speaker 2: The three.
• 43:52
  Speaker 3: At the end of the day, we all die. And
• 43:55
  Speaker 3: one has to wonder what he was thinking on his deathbed.
• 43:58
  Speaker 3: Maybe he was happy. Maybe he wasn't. We just don't know.
• 44:01
  Speaker 2: Well, my big takeaway is that balance sheet nerds shall
• 44:04
  Speaker 2: inherit the earth.
• 44:06
  Speaker 3: And people who care about collateral as well.
• 44:08
  Speaker 2: Yes, exactly. People should care about the collateral, the creditor's rights. Anyway,
• 44:12
  Speaker 2: that's it for this week's episode of The Story of Money.
• 44:15
  Speaker 2: Thank you so much, Greg, for joining us here today.
• 44:17
  Speaker 1: Thank you. This was great fun. I appreciate the opportunity.
• 44:21
  Speaker 3: And if you like this episode, please remember to like
• 44:24
  Speaker 3: it and subscribe. So until then, I'm Gillian Tett.
• 44:28
  Speaker 2: And I'm Robin Wigglesworth. I'll see you here next week.