CHAPTER 1: 1492: The Seven Deadly Sins Tumble out of Europe

Europe Rebelling Against Christianity:
The Role of Merchants

IN EXPLOITING THEIR FUNCTIONS FOR PROFIT, rulers and church officials were ably assisted by merchant bankers. When Archbishop Albert sent Tetzel to sell indulgences, the Augsburg merchant bankers (the House of Fugger) sent along an accountant. They had loaned Albert money for the down payment on his second archbishopric and were to be repaid from Tetzel's sales receipts. Despite the church's rules against interest-bearing loans, the Medici of Florence earned interest from the pope's alum monopoly and sales of offices.

Merchant bankers profited from loans to rulers who outspent their revenues. In the Italian city-states, government debt "held promises of returns" for lenders. Servicing debt was more lucrative than collecting taxes, so public "finances were in a disastrous state." Merchant bankers took 40-60 percent of city-state revenues as interest payments. The resulting hyperinflation and doubtful coinage drove Italians to deposit money in banks, thus giving bankers more capital to loan out at interest.

Easy profits from lending to church and government pulled the economy from its proper functions. In Florence, "the net loss to productive investment" from financing the public debt "was enormous." In Christian terms, investment, production, employment and trade should enable people to acquire necessities at reasonable prices. Naturally, people who invest, produce, hire and trade expect to earn a profit, but profit should not be exorbitant or so high as regards luxury goods that production of necessities is neglected. Production of necessities for everyone in society is crucial. Tax-farmers, papal bankers and indulgence sales accountants did not produce anything. The larger merchants mostly dealt in luxury goods or in money as a commodity. That was where large profits lay. The European capitalist, says historian Fernand Braudel, "did not commit himself wholeheartedly to production" but eyed the main chance and the easy profit. He "only took an interest in production when necessity or trading profits made it advisable."²⁵

Millions of European peasants lived close to starvation, while merchants, princes and clerics exploited political and spiritual institutions for private profit. Self-interest was the great integrating motive. Important consequences resulted from organizing society around self-interest rather than religious, communal or reciprocal principles. When Europeans left Europe, those consequences became clear. Countervailing self-interests restrained each other in Europe, but, since indigenous peoples lacked that power, European self-interest ran riot in the conquered world.