The Ascent of Money: A Financial History of the World

OVERAMBITIOUS BUT POORLY RESEARCHED & HAPHAZARD FARE

Niall Ferguson has published another sweeping book, this time in his purported field of expertise in financial history, not in political economic history, where he had most famously written 'The War of the World.' For that one must be grateful, since his neo-imperialistic views, sensational support of empires and subjugation, and controversial justifications of Nazism, were just too jarring. <BR/><BR/>Here he makes an ambitious attempt to tell the whole story of finance. It begins in Mesopotamia and ends in the credit crisis of 2008. The title is a play off the title of Jacob Bronowski's Ascent of Man. Overall it is a considerably worse book than Birth of Plenty by William Bernstein, and even more so when compared to Empire of Wealth, a recent book on economic history. It cannot replace Peter Bernstein's trilogy, including Against the Gods, Gold and Capital Ideas. It lacks the details of Vincent Carruso's Investment Banking in America or other detailed tales of financial history. Yet it lacks synthesis too, certainly when compared to Birth of Plenty or Bernstein's trilogy.It is worth buying though, hence the 4 stars, but only for a quick jog through history, not for an understanding of it. <BR/><BR/>The book does not delve deep into the details, which is its weakness. It does not give a bird's eye view either, because the vignettes he chooses, the facts he emphasizes, and the stories he stresses are generally the unimportant ones. That flaw is not only true of ancient finance, about which he may not be an expert, but also so of medieval and modern financial history, an area in which he should have better selected the stories he chose to emphasize. <BR/><BR/>What the author ends up doing is overemphasizing stories about the Rothschilds, who he covered in a bio years ago, or about current events, including ones about the current credit crisis, which seems oddly placed (and likely added at the last minute, once the markets collapsed and the book likely appeared too optimistic). There are at least two references to the compensation of Lloyd Blankfein, CEO of Goldman Sachs, anecdotes which would be out of place in any serious history of finance. Then there are the detailed discussions about some obtuse scandal in Britain but hardly the same space to Enron or Milken or other scandals which have plagued history. <BR/><BR/>Not only is the selection of stories poorly done but the level of the narrative also fluctuates between sweeping statements unsupported by the facts (a habit of Niall Ferguson) or minute details about this or that, very often irrelevant to boot, leaving the book appear put together in a hurry (which too is a longstanding weakness of the author). There is the mathematical formula of the Black-Sholes, which seems out of place in a short history of finance, and especially so since the author claims he does not even understand what it means. The points made could surely have been driven home without the formula. <BR/><BR/>Third and worst still is the decision of the author (or his research assistant) to summarize issues into five or six bullet points, a la a McKinsey presentation. This occurs in several places, with paragraph headings (!) and summaries, a style unsuitable for a history book, and truly not even used by newspapers. One does not buy a book to rush through issues in bullet points! <BR/><BR/>Fourth, the author has tacked onto the end of the book a note about the Descent of Finance. Clearly he does so to tone down the story, to fit the current collapse

9 out of 12 people found this review helpful.

Money makes the world go round

you are like me, the recent financial crisis has forced you to rethink what money is, how it works, and how global economic trends affect when and how currency moves about. This timely book explains the origin and growth of money, banks, stock markets.<BR/><BR/>Ferguson shows us that the typical Wall Street logic of looking back the twenty or thirty years only the most experienced investors lived through is not enough to improve our current position. Ferguson says the only way to solve our financial crisis is to put the origin of money and financial strain in its proper historical context. It is far too late to be discussing expensive houses and cheap credit. We need to look way way back to understand the wreckage of banks, brokers and hedge funds that litters the markets. He shows us that looking back is the way to know what to do next. Otherwise, it'll be another new bubble down the road that leaves us scratching our heads after it pops.<BR/><BR/>Read Ferguson's book and you'll better understand the possibilities for disaster inherent in the loose credit and securitization of bad debt from which so much money was made before the crisis unfolded. His grasp of history vindicates his profession and brings an understated beauty to money.<BR/><BR/>The other book I read this week that I also recommend very strongly is The Emotional Intelligence Quick Book. Let's just say it makes it a little easier for me to watch the market, and in a little better mood around my husband when I come home from work :)

4 out of 6 people found this review helpful.

Lively and informative!

A sweeping look at the development and power of money throughout history. Accompany this with Jerry Z. Muller's "The Mind and the Market."

Superficial, over-hyped

This is a lively but superficial history of finance. Niall Ferguson surveys the evolution of credit and debt from ancient Mesopotamia to the Medicis in Renaissance Florence to the corporate finance bases of the Dutch, British and American empires. His chapters trace the rise of money and credit, the bond market, the stock market, insurance, the real estate market, and the rises and falls of international finance. Ferguson never asks where the money comes from, never asks who produces the world's wealth. Maybe he knows the truth - the world's workers produce the wealth and the world's capitalists nick it. Argentina's default in 2001 was the biggest in history. 500,000 creditors had to accept new bonds worth 35 cents on the dollar. As Ferguson writes, "So successful did its default prove (economic growth has since surged .) that many economists were left to ponder why any sovereign debtor ever honours its commitments to foreign bondholders." Default really is good for you - unless you are a bondholder. Ferguson points out, "It's not owning property that gives you security; it just gives your creditors security. Real security comes from having a steady income." Capitalism can't achieve this - witness the 20 per cent youth unemployment here and the 45 per cent youth unemployment in Spain. Countries, like individuals, need to have a diversified portfolio of assets, and must not put all their eggs into one basket, as Ireland did with its insane property bubble and bust. Ferguson is so love in capitalism that he skates over its huge bubbles and busts, its vast injustices, its dependence on exploiting the great majority of the world's people, and the huge extent of world poverty.

Very informative

Throughout the book credit, debt, banking, insurance, investments, entrepreneurship and much more is discussed. The historic developments of these financial aspects are all described. For example Ferguson explains the first records of inflation when the Incas were forced to dig metal to make coins for Europeans, However the more they dug the less value it had. He also recollects the first type of stock market crash, run by the French, struck a financial crisis in Louisiana, and how one crash can affect the world. This book covers the historic aspects of finance in major depth allowing the reader to truly understand why the economy is currently run the way it is.

Truly fascinating

There are the few who strive for perfection. Niall transcends the treshold of normalcy by going above and beyond any expectation us lay-people could conjure. With interviews of Soros, Griffin, Volker and many more, and a host of acknowledgements to boot a wildly marvelous display of information prescient to the dilemma of numismatics, this text is absolutely necessary for anyone who enjoys being a student of facts. I can only say that I wish he hadn't edited, so I could learn more.

0 out of 1 people found this review helpful.

A Compelling and Relevant Read for Those Interested in Finance with a Penchant for Historical Context

An "In the beginning..." to present day tour of the evolution of the exchange medium we call money. The story also expands to cover banking and the insurance industry to round out the perspective. Ferguson has the gift of engaging narrative that compels you to take this historical journey with him. You will have fun but will also learn about world events and culture as they were and are affected by banking and finance. You will not look at national and international events the same way again once you understand the nexus between these events and money.

Required reading

In this acclaimed bestseller, The Ascent of Money, Niall Ferguson attempts the splendid, but impossible task of his subtitle: A Financial History of the World. Early in the book the author makes two important points, the first is, "Behind each great historical phenomenon there lies a financial secret." (page 4). The second is that most of us are woefully undereducated when it comes to finances and financial history. These two points are brought together time and again as the author describes how crises have been worsened by financial experts not being aware of the history of finance. Young financial operators can not have deep personal experience of anything but the recent financial history. Without training in the financial history of the world they can walk into a crisis wearing blinders. This may have been a contributor to the financial crises of 2008.

Understanding financial history is important for the rest of us so we might better understand the current political and economic situation and how it affects our own personal financial health. In that regard this book is a wealth of information about the origins of money, lending, banking, bonds, stocks, insurance, derivatives, and their intertwined histories. The timing of this publication and its accompanying television program is perfect for catching the public hunger for an explanation of the causes behind the financial crisis. The history of these instruments and institutions is brought right up to the original publication date of 2007, with additions made for the 2009 paperback edition. Unfortunately it is difficult to write a complete and authoritative history of events while they are unfolding. Hopefully the current financial environment will settle into a more stable pattern and Prof Ferguson will undertake a more extensively revised second edition.

With over 400 pages this is not a small book, but some of the chapters could be still afford to be expanded to fill in more details of the events he describes. At times the prose is a bit thick and some sentence structure is a bit convoluted. There are places where the text is written with asides, footnotes and endnote references with subtext along with citations. It can be like listening to the table conversation of a group of scholars who are all talking at the same time. Perhaps it was taken from a conversational style more suited to the TV program. This could be corrected by taking the literary space to expand the explanations for easier digestion on the part of the reader. The six chapters have an average of 54 pages. This seems too long for a general interest reader. The chapters could be expanded for fuller treatment and divided into subchapters for easier digestion.

If an expanded second edition is undertaken there are several other pieces of academic paraphernalia that would contribute to the accessibility of the information in this book. Addition of a bibliography would provide easier access to the citations. A glossary of terms would help those of us who are trying to learn this for the first time. An appendix of names with brief biographies would help readers understand the personalities involved without interrupting the flow of the text. Karl Marx is mentioned at a few points in the book, but only in passing. Perhaps in an expanded second edition, room can also be made for an answer to the communist critique of capitalist finance.

Most enlightening!

This book has helped me understand how the banking system, wall street and complex financial products and services evolved over the years. I recommend it to anyone that would like to better understand the origins of our recent financial debacle.

How Money Works

Ferguson provides a thorough analysis of the history of money, including banks, stocks, bonds, insurance, and real estate. He provides the context for understanding current financial challenges for the US and world economy.

If you would like to understand how we got the concept of money that we take from granted today, you should read this book.

It is a very interesting book, not an original idea, but explains how the financial institutions and monetary concepts of today's world began and developed until the deep complexity of the today's market.

Great airplane read ...

... or readable anywhere for that matter. Accessible, easy "first background" "Money 101" tome.

The title says it all

Another tour de force of world history, this time focusing on financial history, a topic that everyone who has been hit in some way by the current recession should be looking into. Once again going against the grain, Ferguson argues that money and the subsequent institutions and promissory notes that have been used to save or create more money are the keys to national wealth and expansion, not their destruction. In fact, whenever he traces the rise and fall of vast fortunes throughout history, it only serves to add to his argument that constantly evolving financial markets pave the roads towards progress. His narrative on chapter two about the French bond market bubble in the early 18th century is a good example of this. However, where Ferguson stumbles, in my opinion, is in his lack of explanation regarding basic economic terms and principles. He knows what he's subject and I got most of what he was saying, but there were times I was left scratching my head trying to figure out what he was talking about. If you don't know anything about business or economics, I recommend borrowing a basic econ. textbook or a dictionary on business and econ. terms. In conclusion, this is a wonderful book on the financial history of the world and very pertinent for our times.

Good Book

I liked the information that the book provided.

Taught Me Some Finance in a Nice History of Finance

I am a fan of non-fiction, but I do like a good story. This book will take you on the story of money and how it has developed from precious metal to paper to an idea. Following money like it were a person, you learn something about how important it has been and still is, what it is supposed to do can what it can do.

Money Talks!!!!

In this book you will learn the evolution of greed!!!!

checks and balances

I think this book is good reading for macroeconomics and accounting.

I can't put it down.

What is money really?

I will not pretend to be an expert economist. I only suggest anyone who wishes to understand economics read this book. Had I read this book before taking so many a painful classes, I would have been better off. After reading this book, you can easily understand supply and demand as well as the creation and management of credit.

Historic research and economic syntax are well documented.

Niall Ferguson is exceptional in researching and informing the readers of how economics, trade, banking, insurance, and investments transferred our world. This book contains a lot of literature that a lot of history dismisses. Interesting and thought-provoking Mr. Ferguson does not disappoint. I strongly urge to re-read and understand the vocabulary.

Financial historian Niall Ferguson is an articulate and persuasive writer whose subjects could not be more relevant today. With his latest book, The Ascent of Money, he appears to be developing a habit of being uncannily prescient about the future.

Niall Ferguson writes an engrossing account of the invention and development of financial industries, banking systems and economic ideologies that have shaped world events, politics, business practices and influenced social evolution since the earliest civilized societies of Mesopotamia to the global village of today. The author masterfully engages an inherently complicated subject, examining its myriad interdependencies with thoughtfulness and clarity. To his credit, he does not forcibly refract history through the prism of current events. If the subject itself otherwise might interest a narrow audience, a world gripped in financial calumny could hardly inspire more rapt, widespread attention. Quite apart from its timely theme, Ferguson's pure deftness and knowledge of his subject merits close attention. On the one hand, he animates the subject of financial history in a narrative style that is engaging and informative for a lay reader, while on the other he documents the historical record methodically and meticulously. Ferguson emphasizes that human nature, unpredictable and unquantifiable, has played an important role in producing the brilliant economic successes, as well as financial excesses and crushing failures from the distant through recent past. He excavates the historical overburden of millennia to offer insightful perspective on how we arrived where we are today and, filtered through the lens of past history and human behavior, makes a few glimmering observations about the terra incognita that lays before us.