Meet the Fuggers: Europe’s richest family ever

The Story of Money

This episode explores the meteoric rise of Jakob Fugger, a 15th-century German banker whose wealth is estimated to be worth $4 trillion in today's

Key takeaways

• Jakob Fugger's wealth, when adjusted for the size of the European economy, is estimated at $4 trillion, far surpassing modern billionaires like Elon Musk.
• The Fugger family expanded from a textile background into a massive mining empire controlling silver and copper across Europe.

Main topics

• Comparison of historical and modern billionaire wealth
• The rise of the Fugger dynasty in Augsburg

Notable quotes

He was very proud of his wealth. That's all they cared about, was making money.

Conclusion

The episode offers a profound look at how concentrated financial power

Transcript preview

Speaker 3 (0:00) What happens next in the story of money? Nuveen has spent over 125 years helping clients answer this question. By investing in the growth of businesses, real estate, infrastructure and natural capital, we continue to deepen our expertise across income and alternatives so investors can confidently write the next chapter of their own portfolio stories. Nuveen. Invest like the future is watching. Visit nuveen.com slash future to learn more. Investing involves risk. Principal loss is Speaker 1 (0:27) possible. He would be worth about $4 trillion. Wow. Compared to poor Elon at only $900 billion. Speaker 2 (0:34) God, pathetic. Elon needs to get his finger out, really. Speaker 1 (0:37) Fugger was a glorified peasant. There's a risk of him being hauled off in chains and having a hot poker shoved through his cheek on the whim of the emperor. And he's saying, listen, buddy boy, I gave you this money. You got to pay back or else. Here's a banker who started probably the most seminal event in European history. Speaker 2 (1:00) Today on the story of money. If you want to understand how modern billionaires weaponize money, create monopolies and use politics to their advantage, well, you don't need to listen to a tech podcast. Nope, you just need to listen to us and look to the Renaissance. Speaker 4 (1:16) Because although everyone's heard about the Medicis and how they revolutionized banking in medieval Italy, there was actually another family. operating in Europe's north at the same time in the 1500s. And they were the most influential family you've never heard of called the Fuggers. They Speaker 2 (1:35) were a textile and mining dynasty in the 1500s, who at their peak, depending on how you measure it, were richer than the Medicis. Way richer, and in fact, richer even than Elon Musk or Bill Gates today. They were fabulously wealthy. Speaker 4 (1:50) They were also richer than the Trump family, if you can believe it. But the point is, 500 years before Silicon Valley, the man at the center of the Fugger family, a man called Jakob Fugger, built a business empire that dwarfed today's tech titans. And that's whose story we're going to tell today, because actually, this is a saga which might sound alarmingly familiar. Speaker 2 (2:12) Yes, and to introduce us to the Fuggers, and in particular Jakob Fugger, we're joined by the former journalist and historian Greg Steinmetz, author of The Richest Man Who Ever Lived. Hi, Greg. Thanks so much for being here today. Speaker 1 (2:25) Thank you very much for having me. You know, I love the Financial Times. I've been reading it forever, and this is an honor as well as a privilege. Okay, Speaker 4 (2:32) that was not a paid advert, but thank you. Speaker 4 (2:36) fascinated by what we're going to be talking about today because there's such a lively debate about billionaires right now. And we need to look back to try and frame this more accurately. So Speaker 3 (2:47) before we go any further, the Fuggers are Speaker 4 (2:50) not as well known as other rich historical dynasties like the Medicis or the Rothschilds. And then Jacob was known as Jacob the Rich, Jacob Fugger, wasn't he? Speaker 1 (2:59) Yeah. And he gave himself that name. He was very proud of his wealth. That's all they cared about. was making money, and he wanted to be known. And in fact, on his tombstone, he points out that he was second to none in the creation of extraordinary wealth, and for that reason should not be numbered among the mortals. Speaker 4 (3:19) Elon Musk, eat your heart out. I'm Speaker 2 (3:21) curious, how wealthy was he? The Speaker 1 (3:24) way that economists and historians compare wealth through the ages is to take someone's net worth and divide it into the size of the economy at the time. If you take his wealth, divide it into the size of the European economy, it came out to 2%, which is an enormous, enormous number. And that's even more than Rockefeller had at his peak. And if you just work the math on that, that comes out to about 400 billion. I think as of this morning, Elon is worth about 900. But here's an interesting distinction. Fugger kept a balance sheet. That's how we know how much money he had. And what I'm giving you is what's called the book value for Fugger. That's just everything he owned minus what he owed other people. Now, Elon's, if you just look at Tesla, Tesla sells for about 13 times its book value. In SpaceX, we didn't even know what the book value is, but that sells at an even higher multiple. So if we were to take... If we were to apply the same sort of math to Fugler's book value, he would be worth about $4 trillion. Wow. Compared to poor Elon at only $900 billion. Speaker 2 (4:37) God, pathetic. Elon needs to get his finger out, really. Speaker 1 (4:40) I'm more curious, to be honest, about Speaker 4 (4:42) where he came from and how he got Speaker 1 (4:44) this money. He was born in the right place at the right time. Augsburg, let's say maybe it's sort of a distant suburb of Munich. Takes an hour by train to get there. At the time, it was a great place. It was at the crossroads between Venice, which handled all that Silk Road business, and the rest of Europe. It was fairly close to the passes you needed to get over the Alps. But you could also get access up to the north, up to the Netherlands, Belgium. So that was a good place to be. Augsburg had carved out a niche as a textile center. That put Augsburg in a good place to build industry. And from that, we had banking. Another advantage that Augsburg has, it was an imperial city. Instead of answering to a duke or a bishop, it would answer directly to the emperor. And that gave them a lot of freedom. So they could pursue their capitalist dreams in a way that a city controlled by a bishop or a prince could not. So he was in the right place at the right time. His grandfather was a peasant, moved to Augsburg with a bunch of looms, got into the textile business, started getting other people to make textiles for him. And from that, they got into financing. So Jacob and the third generation took everything to a much higher level. Speaker 4 (6:08) And just to go back, this was in 1367 that the grandfather Hans Fugger moved to Augsburg. So we're talking about really the 14th and 15th century as they developed. Speaker 1 (6:20) His grandfather lived in sort of the outskirts of town. Every day, the city walls would open up. All the peasants would come streaming in. They'd do what they had to do in town, provide services for the rich people who lived behind the city walls. And then at night, they would get kicked out again, shoot out the back door. His grandfather made enough money that he was able to afford living within the city itself. And then his mother, she was a great businesswoman in her own right. Because it was an imperial city, women could own businesses, they could sign contracts. And she kept the thing together. Speaker 2 (6:58) I promise this is my only off-color joke here, but isn't there some funny gag about when Hans Fugger... first arrives in Augsburg and how his name is written down in the tax registry? Speaker 1 (7:09) The Latin name is fucker. Okay. Let's say it. Yes, let's get it out there. Sorry, I was fishing for it. And some argue that the derivation of the word fucker came from fouger. You know, it's a disparaging comment about bankers. Oh, wow. Speaker 2 (7:30) That is amazing trivia. I didn't know that. I don't know what you think about Speaker 1 (7:33) bankers, but... Some people describe them with the F word. Yes, Speaker 2 (7:38) exactly. It was lots of people's favorite word. And if it derives from banking, then Jagdpflugel, that's fantastic. I love that. Okay, so Jacob is born in 1459 Augsburg, and it's a wealthy town. It's kind of a metropolis, really, at least for the era. What kind of childhood did he have? Was he spoiled or, you know, the flugel is quite strict? Speaker 1 (8:00) I don't know, but I imagine as the 10th of 10 children and being a young boy, he probably was spoiled. But on the other hand, the Fuggers hadn't returned one of their own to the priesthood. And Jacob was the one designated to go into the priesthood. And he was all set to do that. But then his mother recognized that he had a talent for business. And she sent him down to Venice to work in the German trading house there. And the Fondaco de Tedesco, whatever it was called down in Venice, served as the Harvard Business School of the day, not only because of the knowledge you would pick up there, but because of the connections you could make. Speaker 4 (8:47) Tell us a bit more about why Venice in particular. Why was it like Harvard Business School at this time? Speaker 1 (8:53) Geography. Venice was as far north as you could get in that Mediterranean area to the rest of Europe. It was also being on the eastern side of the Italian boot, the closest you could be to the Silk Road and all the trade coming in from there. Venice, like Augsburg, was structured as a city-state. They could make their own rules. They were also very much driven by the profit motive. They wanted to make as much money as they can. They had all this trade coming in. They had the spices. They had the textile. They had everything coming from the East. And it was the crossroads. There was no greater financial center on Earth than Venice. And Speaker 2 (9:37) they loved finance in Venice, right? They were incredibly inventive and creative. Speaker 1 (9:42) Yeah. The Italians, they set the standards for banking and bookkeeping. Fugger learned accounting. And that was very important because unlike a lot of German merchants of his day, he was very meticulous in how he kept his books and kept his numbers. And he was honest with himself. If someone wasn't going to pay him back, he wrote it down. The other, his competitors just wrote numbers here and there on little scraps of paper and forgot what they had. Now, what Fugger did with bookkeeping, he took it to an even higher level because he was the first one to create a consolidated book. balance sheet. So he got