Ivan the Terrible Was Robbing a Bank, Not a Church, and He Was Doing It the European Way

Schlichting is a reliable witness for an unpleasant reason: he was inside the machine. A German taken captive during the Livonian War, he served as interpreter to the czar's Italian court physician, which put him close to the body of the sovereign and within earshot of things nobody says in front of strangers. His notes are not an exile's pamphlet. They read like a protocol.

In the winter of 1570 Ivan IV brings his army to Novgorod, a merchant republic and the wealthiest Hanseatic trading city of the eastern Baltic, annexed by Moscow less than a century earlier. First, three hundred and fifty of the leading citizens and merchants are summoned out of the town by name, from a list compiled by a certain Yermolai. They are beheaded without trial. Then the nobility of the city. And only at the end, as the closing line of the operation, come the monasteries: the monks are dragged out, one is left behind in each house, the remaining hundred and fifty are killed, and everything of value is carted away, the bells included.

If this was a madman's rampage, the sequence makes no sense. Why would a lunatic need a list of names? Why leave exactly one monk per monastery, if he came to punish heresy and treason?

Now substitute for the word "monastery" what a monastery actually was in that century. A bank.

What a monastery is once you remove the piety

Before the Italian banking houses appeared, the Church held a practical monopoly on finance, and this had nothing to do with faith. It had to do with technology. The Church was the only institution capable of doing three things at once: collecting money, counting it, and keeping it safe across generations.

A large monastery on a trade route was a warehouse, a vault, a clearing house and a notary's office under one roof. It held deposits. It kept a merchant's property while he travelled. It lent against land. It registered agreements, because an entry in the monastic book outweighed the word of any witness. And it held a reserve in metal, which never loses its value.

The Church always follows the caravan. It settles where the money moves and relocates when the money does. That is why the metropolitan of Kyiv moved first to Vladimir and then to Moscow. Moscow did not become the new centre of the faith because the metropolitan happened to sit there; the metropolitan came because the revenue had already gone there.

The Mongol khans did not exempt religious institutions from taxation out of tolerance either. That exemption was a contract, and a profitable one for both sides. The Church had precisely what the Horde's administration lacked: a network of houses across every conquered territory, literate men, the skill of keeping accounts, and above all the authority to make people pay in places where sending a detachment every time would cost more than the tribute was worth. In exchange the Church received a charter of protection and freedom from payments, and undertook to pray for the khan's power and never question it. The Church here is not a victim of occupation. It is a privileged financial operator built into the conqueror's tax system.

Seen this way, the cathedral of St Sophia in Novgorod is not a church with a rich sacristy. It is the central cash desk of the Novgorod lands, where the profits of the Hanseatic trade were deposited. And the three hundred and fifty merchants whose names Yermolai so carefully wrote down are not vague "rich men". They are the client list. Account holders, debtors, creditors, guarantors, the men in whose heads and papers the whole web of obligations of that market was stored.

Now read Schlichting's sequence again. First you eliminate the people who know who owns what. Then the people who could contest it. And only then do you calmly empty the vault, because there is no longer anyone left to file a claim.

One monk per monastery turns out to be an entirely rational detail. The institution is not burned. It is not closed. It is left formally alive, with a caretaker attached to the land and the buildings, except that it now works for a new owner. That is not mercy. That is keeping the branch open after the takeover.

Bells as the most liquid asset on the list

The most revealing item in that inventory is not the gold. It is the bells, which Schlichting names separately.

Sixteenth-century Muscovy was a country of appalling natural poverty. No good iron ore. No copper. No lead or tin. No silver, no gold. In other words, none of the materials from which that age made artillery, firearms, shot and bullets. All of it had to be bought in Europe, for silver, which itself had first to be earned by trading furs, wax and access.

And then it turns out that across the Novgorod lands, hanging in the bell towers, are several hundred tons of bronze of exactly the right composition. Already smelted. Already refined. No need to mine it, no need to ship it across the Baltic. Those bells were not symbols torn down in a rage. They were a strategic reserve sitting on somebody else's balance sheet.

A European ruler in that position would have issued bonds or taken a loan from bankers. The Muscovite ruler took what was available: the cash desk, the metal reserve, and the silence of everyone who might have objected.

The idea was not a Muscovite invention

Here comes the part that satisfies neither side of the argument. There is nothing uniquely Muscovite about the idea itself.

The early modern period is precisely the age when states across Europe went to the Church for money, because nowhere else was that much free capital sitting in one place. Gustav Vasa did it in Sweden in 1527, and it was confiscated Church property that paid for the Swedish army which would later beat Moscow's troops in the field. Henry VIII did it most thoroughly of all: first he took England out from under Rome and made himself head of the Church, and only then, in the late 1530s, dissolved the monasteries and redistributed their lands. Peter I would later copy that scheme almost to the letter. He kept the patriarch's chair empty from 1700, after the death of Adrian, making do with a locum, and on 25 January 1721 issued the manifesto on the Spiritual Regulation which abolished the patriarchate as an institution. On 14 February of the same year the Spiritual College, soon renamed the Holy Synod, opened in its place, and the Church became a department of the state. The German princes were doing the same thing under the banner of the Reformation. Everywhere the arithmetic was identical: modernising the state, and above all the army, costs money; the money is held by the Church; the Church is protected by the state, so who better than the state to rob it, in order to protect it even better?

Which is why Ivan IV was neither original nor insane. He acted with complete logic, squarely within the European trend of his century, only by local means. Where London and Stockholm carried out secularisation through parliament and statute, Moscow carried it out through the block and the burning oven.

The difference turned out to lie not in the cruelty, but in what happened to the assets afterwards.

In England the monastic lands passed to new owners who farmed and improved them, and out of that grew the class that would later finance the fleet, the colonies and the industry. In Sweden the confiscated wealth went into a state that became the military power of the Baltic for the next two centuries. In Moscow what was taken from the Novgorod monasteries was simply spent. The Livonian War ate it, and that war was lost.

The essential point, though, is that nothing replaced the liquidated Church bank in Muscovy. No city banks appeared, no merchant houses, no credit institutions capable of accumulating capital. One cash desk remained, the sovereign's, and from then on any attempt to accumulate anything outside it was automatically read as treason. That construction outlived Ivan, outlived Peter, and outlived everyone who followed them.

Where the doctrine fits in

Which leaves one question. If everything here was settled by metal and lists, what was the Third Rome for?

For exactly this. Emptying a vault in plain sight requires an explanation of why the man doing it has the right. So you announce that the true faith now resides here, in Moscow, and only here. You announce that those holding the vault have betrayed that faith. After which the seizure stops being a seizure and becomes the restoration of justice, and what remains in the chronicle is not a robbery but a pious campaign.

How that formula was assembled, and who actually commissioned it, is the subject of the second volume of "Myths of the Third Rome", now being prepared for publication.

The first volume, already in print, took apart the foundations of this structure. The second deals with its walls: the Bulgarian original of the doctrine, which reached Moscow from Tarnovo as a text without a state; the letter of the monk Filofei and the question of who it was actually addressed to; the origin of the title "czar", whose etymology leads almost anywhere except Rome; and the mechanics of legitimation, in which the opponent is first declared a usurper and only then killed.

The history of Muscovy is best read as a financial document. Do that and the mysticism disappears, the enigmatic soul disappears, the fits of unfathomable rage disappear, and what remains is what was actually there: assets moving between those who know how to count and those who know how to take.

The merchants of Novgorod, in 1570, were unlucky enough to find themselves on the wrong side of that equation.