Extreme Wealth: The Richest Men in History

Extreme Wealth: The Richest People in History

It’s hard to see the current contestants for richest person in the world and not be in awe of their wealth. As of this writing, Jeff Bezos has reclaimed the coveted crown. His net worth is nearly $200B. It’s an even greater challenge to measure the wealth, in both absolute and relative terms, of people from centuries and millenia ago. Still, it is very fun to talk about.

Ancient Rome: Wealth and Power

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Scholarly opinion is in pretty strong agreement that the richest person in ancient Rome, all periods included, is the man pictured above, Marcus Crassus. Crassus was a figure in the late Republican period and a contemporary of Pompey and Caesar. He was instrumental in the transformation of Rome from a Republic to Empire, however unwittingly. The three men entered into an arrangement, called the First Triumvirate, by which they agreed to use their combined resources, financial, legal, and political, to steer the course of Roman policy.

Crassus began his career as a subordinate of Lucius Cornelius Sulla, a powerful Patrician general and politician who defeated several of the Republic’s enemies in many wars. He later marched on Rome itself, twice, in a civil war against his erstwhile friend turned enemy, Gaius Marius, and Marius’ supporters. Sulla’s actions were unprecedented, but he nonetheless won the civil war. Crassus’ competent leadership in the final battle played a role in Sulla’s success.

When Sulla took the reins of power he proscribed his political enemies. Proscription was essentially a legal hit job. Sulla had his enemies legally killed and auctioned off their property to his supporters. Marcus Crassus had few scruples about enriching himself through such opportunity. Sulla was happy to indulge him and any others like him, to spread around the blame for all the people he killed.

How Rich did Crassus Become?

A common estimate I see of Crassus’ wealth, at a particular time I’m unsure of, is ~200M sesterces. Hard to translate that to any modern currency. But it bought him an awful lot, which I’ll get into shortly. The best way to measure his wealth is in relative terms. An economist cited in this article estimates his income to be about 32,000% more than a typical Roman’s.

Crassus grew his wealth through additional business ventures. He trafficked in slaves for instance, which was not disdained by the Romans. Also, Crassus created some unique, shall we say, entrepreneurial ventures to add to his fortune.

Crassus created Rome’s first fire brigade, through which he acquired more property. In addition to being an innovative businessman, Crassus wasn’t hampered by morals or, for the most part, the law. When fires broke out, he would use the duress of the situation to get the property owner to sell his property at a greatly discounted rate. He would refuse to put out fires unless the owner met his extortionate demands. Crassus did not consider many, if any, business practices to be beneath him.

What Did the Richest Man in Rome Do With His Wealth?

Like most Roman men of note, Crassus coveted a successful career in politics. He wanted to climb the cursus honorum, the Roman political ladder. Not only would doing so open further business opportunities, but it would grant him the immortality he sought; his name among the Roman legends who had strengthened the Republic by leading armies against its enemies.

And wage war he did. Crassus, with Julius Caesar at his side, brought an end to the Third Servile War, waged against the Republic by none other than Spartacus. Many Roman legions had been defeated by Spartacus in the years since he began his revolt. Their commanders were usually killed. Needing fresh levies, unable to recall those dealing with other problems, and finding it difficult to raise fresh troops, the Senate turned to Crassus. Crassus equipped, trained, and led the new force responsible for dealing with Spartacus at his own expense. After some initial difficulties, and after reviving the ancient practice of decimation, in which one in ten selected soldiers, those having displayed things like cowardice or insubordination, is randomly killed after drawing lots, Crassus was successful, and Spartacus was defeated.

Crassus did not find the glory or the pathway up the cursus honorum immediately following this. He found the praise for his victory underwhelming. The Senate didn’t view Spartacus’ revolt as a true existential threat like a foreign invasion. Rather, they viewed it as more of a massive crime wave. Also, since he was not fighting a foreign enemy there was no plunder to enrich the Republic or territory to add to its vastness. So, while grateful to Crassus, they nonetheless rewarded him with an Ovation, a kind of celebratory parade that was held in lesser esteem than a Triumph.

How the Wealthiest Man in Rome Flew Too Close to the Sun

Unsatisfied, Crassus turned elsewhere for the glory he sought. Understanding Rome wanted a foreign enemy brought to heel, Crassus set out to find one. He settled on the Parthian Empire, the dominant power in Iran/the Middle East.

As I’ve discussed, exceptionalism in one area does not equal exceptionalism in another. Many successful businesspeople have failed in subsequent business ventures, or when they erroneously believed their expertise translated into another realm. Such was the case with Crassus. Crassus had demonstrated capability as a commander under Sulla and against Spartacus. He was a capable, albeit unscrupulous, businessman. In spite of all of this, he was unprepared for what lay ahead.

The Parthians were adept warriors. It is believed that the term “parting shot” comes from “Parthian shot” a tactic they wielded to devastating effect in battle. Exceptional horsemen, the Parthians would feign retreat while firing backwards with their composite bows. This tactic flustered and confounded their enemies.

Crassus had no answer but one, wait until they ran out of arrows. A foolish tactic no matter how you look at it. The Parthians relied heavily on archery, so naturally, they brought plenty of arrows. Also, doesn’t seem wise to sit there while the enemy is flinging death at you. Crassus’ tactic worked as well as could be expected. He, his son, and most of his men were killed.

Crassus’ already staggering wealth, which he could have added to greatly had he been content to remain in his governorship in Syria and take advantage of his position through normal corruption as most Roman promagistrates did, was clearly not enough. So, he sought even greater fortune and glory elsewhere, and his hubris became his undoing. According to legend, the Parthians decapitated Crassus and filled his mouth with gold until it overflowed, symbolizing his unending greed.

Unparalleled Wealth and Generosity

Musa I, was the tenth Mansa (meaning “Conqueror” or “Emperor”) of the Mali empire, a West African state during the late 13th and early 14th centuries. He inherited a powerful and wealthy state upon his ascension. However, Musa was able to add to his empires vast territories through conquest and enrich its economy further by fostering trade in many goods. These included, but were not limited to, ivory, gold, and salt.

Like Crassus before him, Musa is a contender for the wealthiest person in history. Also, like Crassus, it’s impossible to measure his wealth in modern terms. A devout Muslim, Musa made the obligatory Hajj (pilgrimage) to Mecca. His procession included as many as 60,000 followers, 12,000 of whom were slaves. The slaves carried four pounds each of gold bars and were accompanied by pack animals carrying bags of gold dust. The 500 slaves that directly proceeded Musa himself each bore gold staves. Persian silk and brocade adorned every member of Musa’s entourage. It was as if Musa splurged at Bergdorf Goodman for 60,000 people. He also bore the expense personally of feeding everyone.

Musa’s display of wealth was so flamboyant, stories of it carried across the known world. Musa holds a golden nugget in one hand and a golden staff in the other in his depiction in the Catalan Atlas, written in Spain in 1375, almost 40 years after his death.

Though a firm ruler and conqueror, Musa became known for his generosity. He donated his gold often along his route to the poor, and solicited many merchants. There were unforeseen effects of such lavish spending and charity.

When Benevolent Donation of Wealth Goes Wrong

Before the gold standard, paper money, and fiat currency were created, precious and base metals, including gold, were used to mint currency. So, while Musa’s patronage and magnanimous donations were greatly appreciated, they had unintended negative externalities. Since gold was used for coinage, and so much was being introduced so suddenly, a period of high inflation began. Prices of all kinds of goods rose dramatically, hurting the economies of the places Musa visited and impacting the locals quality of life. Most scholars seem to agree the economy of Egypt did not fully recover even after a dozen years. Apparently, the locals either did not make the connection between Musa and the ensuing economic plight, or didn’t care, since they were still singing his praises throughout the aforementioned period.

Musa did try to rectify his mistake. On his voyage home to Mali he often borrowed at very high interest rates to take some of the gold out of the economy. Musa holds the distinction of being the only person in history to directly and noticeably impacted the price of gold in the Mediterranean world. Musa may have undertaken his Hajj less out of religious devotion than a desire to advertise the wealth of Mali to the world. Considering the Hajj overshadowed other aspects of his reign, such as his conquests, and his wealth was spoken about from Mecca to Europe, it’s fair to say Musa effectively got the word out.

America’s Wealthiest Man

Now we’ve arrived at a profile of a plutocrat whose wealth can be measured in relative terms. I’m referring to none other than John D. Rockefeller.

Rockefeller founded Standard Oil in 1870. It soon became the world’s largest oil refiner and producer. Not only that, it was one of the largest international conglomerates in world history. Mastering horizontal and vertical integration, and through the use of aggressive pricing, Standard Oil controlled as much as 90% of the U.S. oil market at its apex.

Before entering the annals of business success, Rockefeller began his career as a bookkeeper before going into the produce business. His entrepreneurial journey began with startup capital from his father, William Rockefeller, a charismatic con man who made a living selling snake oil. “Big Bill” Rockefeller also lived a double life under the fake name, Dr. William Levingston. In this guise he was an eye-and-ear specialist and bigamist who married another woman in secret.

Rockefeller was an ardent abolitionist, and voted for Lincoln. During the Civil War he avoided service by paying for other soldiers to take his place. He reasoned too many people depended on his business and it depended on him, making it impossible for him to serve.

The Road to Obscene Wealth

Rockefeller sensed a massive opportunity in kerosene oil, and quickly switched his business model. The price of a barrel of oil in 1863 was $13. The profit ranged from $5 to $8. Refineries at the time required little in the way of capital expenditure, ~$1000-$1500, and required few men to operate. Rockefeller and his partners quickly opened their first refinery in Cleveland.

From the start, Rockefeller demonstrated business aptitude his contemporaries lacked. While competitors simply discarded the ~40% of the refined product that did not become kerosene, Rockefeller found ways to profit from it. His company sold lubricating oil, petroleum jelly and paraffin wax, and other by-products such as tar. His in-sourcing of business related expenses foreshadowed his exceptional competency in vertical and horizontal integration. He hired his own plumbers and bought the wood to build his own barrels, drastically reducing the costs of both.

After the war, Rockefeller sensed further opportunity in continued westward expansion, and joined a partnership with his brother, William Rockefeller Jr, Henry Morrison Flagler, and several others in 1866. Abolishing the partnership in 1870, Rockefeller incorporated Standard Oil, named for the standards he envisioned for the oil industry. This presaged an almost messianic view of Rockefeller’s role in the industry he had for himself. The warpath he embarked upon to dominate it he believed was justified as an attempt to save the industry from low quality and shoddy business practices.

And Dominate it He Did

Through the use of innovative and anti-competitive strategies, Standard Oil achieved the aforementioned 90% market share in the oil industry by the end of the 1870’s. It shipped fuel directly to markets, avoiding wholesalers and the costs incurred with using them. It created underhanded rebate strategies with railroads to drastically reduce shipping prices. Rockefeller got into a war of sorts with Pennsylvania Railroad when he explored ways of using pipelines to deliver oil, threatening Pennsylvania’s revenues from shipping oil. Striking back, Pennsylvania made inroads into oil production, touching off a price war with Standard Oil. Standard Oil eventually won, further consolidating its monopolistic grip on the oil industry.

As a result of Rockefeller’s innovations, kerosene went from being a rich person’s way of heating and lighting their home, to a worldwide commodity. It heated homes across the world and became the main source for producing electricity and fuel for cars. Undoubtedly, Rockefeller and Standard Oil contributed much to the worldwide industrial revolution.

Seeking a way around state laws that limited the size of businesses, Rockefeller and his partners became instrumental in the creation of trusts. They combined their shares of Standard Oil into a trust managed by the Rockefeller brothers and seven others, with the trust owned by the shareholders. Prior to this, Standard Oil and other large companies operated as loose amalgamations of several smaller companies. The device Rockefeller and his partners created effectively combined those disparate entities into one massive company.

Rockefeller’s questionable and often underhanded business tactics fueled (no pun intended) negative views from his critics. They ranged from journalists to government officials. The relentless attacks from his critics got to him, and he supposedly quipped “All the fortune that I have made has not served to compensate me for the anxiety of that period.”

Just How Much Wealth Did Rockefeller Accumulate?

Rockefeller retired from active management of Standard Oil in 1897. In 1911, the Supreme Court ruled Standard Oil was an “unreasonable monopoly” and in violation of the Sherman Antitrust Act. The court ordered Standard Oil to be broken up into smaller companies by region. Many of the oil companies of today are legacy companies of Standard Oil. Standard Oil of New Jersey became Exxon, and Standard Oil of New York became Mobil. Standard Oil of California became Chevron.

The Supreme Court Ruling in Standard Oil Co. of New Jersey v. United States had the unintended effect of making Rockefeller even more wealthy. Turns out, the sum of all of Standard Oil’s parts was worth more than the company in its entirety. By 1913 Rockefeller was estimated to be worth $900M. In inflation adjusted 2019 dollars, that equals ~$418B, more than the combined net worth of Jeff Bezos and Elon Musk. That same year, the U.S. Gross Domestic Product was estimated to be $39.1B, meaning Rockefeller’s fortune was tantamount to approximately 3% of the country’s entire economic output.

Rockefeller was a very religious man who believed “God gave me money.” He followed the dictum of Methodist Preacher John Wesley who said “gain all you can, save all you can, and give all you can.” Believing himself a steward of his vast fortune, Rockefeller devoted much of his post-business career to philanthropy. He created a model of charitable giving today’s wealthiest often adhere to.

Final Note on Rockefeller

I could go on at significant length about Rockefeller, but those details are outside the scope of this piece, which is meant to focus on his fortune. How Rockefeller, and Musa and Crassus, earned their fortunes was all I chose to focus on. For that reason, I won’t go into Rockefeller’s philanthropic endeavors. At the risk of sounding hagiographic, I also won’t touch on his more nefarious deeds, some of which you may find quite shocking, for the same reasons.

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