Nature's Evil [calibre 5.27.0]

By the 1560s the industry of Mansfeld had come to a complete stop. The silver and copper it produced could not compete with the metals brought from the New World. Neither Luther nor the dukes nor the miners could have imagined such an outcome; the boom and bust that they lived through were unthinkable in a feudal, essentially peasant culture. Complicated and tragic, life needed a new interpretation. It was precisely these conditions that gave rise to the religious doctrine which would change the life of Christians. Luther didn’t believe in portents or prejudices. But the idea of an omnipotent God whose will must be obeyed, even though it couldn’t be understood, dominated his refined imagination as much as it directed his fellow countrymen who descended into the mines every day. Acknowledging evil and believing in the power of good deeds were central parts of this faith.

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.