Gold. The very word conjures up a multitude of emotions, ranging from joy to despair, with some avarice and a lust for power kicked in for good measure. How did this precious metal become so historically significant, shaping the destiny of humanity from the dawn of civilization? In The Power of Gold, economic expert and bestselling author Peter L. Bernstein explores the timeless appeal and tremendous impact held by this unique element.
For insights, Bernstein begins with ancient Egypt, where gold was used exclusively for adornment, and the Old Testament, noting Jehovah's command to Moses to decorate his tabernacle with "pure gold." After probing gold's roles in matters both mystical and reverent, he traces its transformation into the practical world of real money without sacrificing any of its allure and magic.
From Midas's fabled woes to the Forty-Niners of the American Gold Rush, The Power of Gold intertwines the story of this universal phenomenon with a resounding morality tale. Spanning the centuries and continents, Bernstein reveals how gold, in its glowing beauty and endurance, offers a glimpse of immortality along with the force to inspire and destroy.
From the glorious art works of the Scythians to the alchemy-devoted Isaac Newton, from the Byzantines to Bretton Woods, The Power of Gold presents a fascinating look at how one metal has changed the world. What is the ultimate price of gold? Peter Bernstein's dazzling book will force you to ponder this question as never before.
Gold is the ultimate in tangibility. Bright and shockingly heavy, for centuries the stuff was the physical manifestation of value. The opposite, in other words, of the Internet. Indeed, as Peter L Bernstein points out in his illuminating new book. The Power of Gold, as an exchange medium, gold isn't much different from the 4-ton stone coins famously spent by the Micronesian people of Yap. Bernstein recalls, as a young economist, being shown the basement full of bullion held by the New York Federal Reserve Bank on behalf of several European nations. When one country wanted to pay another, the Fed simply lugged a few bricks from one closet to another. Such efforts are clearly on the way out. The story of gold-and money-is one of increasing abstraction from bricks and coins to national chits, checks and now cybercash. This is just fine with the pragmatic Bernstein, author of the much- praised Against the Gods: The Remarkable Story of Risk. "The most striking feature of this long history," Bernstein writes, "is that gold led most of the protagonists of the drama into the ditch."
Bernstein vividly tells us how this happened, from the grisly death of Roman politician and bon vivant Marcus Licinius Crassus - down whose throat a vengeful (and ironic Parthian reportedly poured molten gold - to the gold-induced global economic death spiral that followed World War 1.
Along the way he treats us to interesting historical nuggets. "Cash" is the Tamil word for money, for instance, and was used to refer to some Chinese coins more than 2,000 years ago. Bernstein also reminds us that some scholars view L. Frank Baum's 1900 novel The Wizard of Oz as a parable condemning America's 1873abandonment of bimetallism-that is, a silver and gold standard - for the yellow brick road of an exclusively gold standard.
It is hard enough trying to explain to American youths today what it's like being in the Army, or what's so unpleasant about inflation. Try telling them about gold. With war threatening last week in the Middle East and an attack on a US warship in the Persian Gulf, the price of gold barely twitched, climbing $4 to $277 an ounce in London last Thursday on the news. As one trader said, "Gold is the dog that no longer barks." Yet only 20 years ago the price of gold soared to S850 an ounce. Two or three pounds of it would buy a good house, and common stocks were priced so low that all the stocks listed in the New York Stock Exchange were worth no more than the sum total of all the world's monetary gold. By 1990, as paper assets boomed in value, gold had fallen to $400 an ounce; to $300 by mid-1997; and below that (though never lower than $250 ever since. Is 20 years long enough to declare the end of an epoch of several thousand years' duration in the history of the human race? That is the question at the bottom of "The Power of Gold: The History of an Obsession," a new book by Peter Bernstein. And the answer he gives is tentative. But the steady accretion of detail in this astonishing book gives the distinct impression that Bernstein thinks the epoch is ended indeed. Bernstein is America's greatest living economic journalist. He had the good fortune to take his economics courses at Harvard College (class of '40 just as the Keynesian Revolution was getting underway.
History of gold It defileth not WHAT is the eternal lure of gold? Peter Bernstein is rather unpoetic on the Subject. He tell us of its "stubborn resistance to oxidation, unusual density, and ready malleability", claiming that these simple physical attributes explain everything we would want to know about the element's romance. Perhaps he is right. But consider the words of an early 17th-century English merchant, Gerard de Malynes, saying more or less the same, but in quite different tones:
"Such is the qualitie of fine Gold that the fire doth not consume it...neither is it subject to any other Element...it is easily spread in leaves of marvellous thinnesse; in colour it resembleth the Celestiall bodies, it defileth not the thing it toucheth; it is not stinking in smell; the spirit of it can by art be extracted." Malynes had the bug, Mr Bernstein doesn't. Because gold's allure is rather lost on him, the author underplays the universality of its attraction, dwelling instead on the curse that has frequently befallen its admirers-from Crassus, a Roman plutocrat who died when Parthians poured molten gold down his throat, to Montagu Norman, the highly-strung governor of the Bank of England at the time of Britain's return to the gold standard in 1925.
Mr. Bernstein's sympathies lie rather with John Maynard Keynes, who famously denounced gold as the "barbarous relic", and with Benjamin Disraeli, who once declared that the "gold standard is not the cause, but the consequence of our commercial prosperity." Mr. Bernstein cites this comment more than once. But is it true? Could the credit and trade of the British empire have been established on any other monetary standard? The answeris probably not. Once gold protected people against the depredations of tyrants. However, the age of democracy has legitimised flat currencies. This explains why John Law failed to impose a paper currency in France in the early 18th century (this key moment in the history of gold is strangely overlooked by Mr. Bernstein. By the 20th century, gold had become an anachronism, as Keynes correctly recognized. It took others longer to release themselves intellectually from their "golden fetters". The populace of Britain suffered for this in the 1920s, as did the Americans in the early years of the 1930s depression. Today gold is simply an adornment. Long may it remain so.
This book is a delight. It is informative, thought provoking and relevant...April 2001
This is a fascinating story. No one who even scans the pages will fail to be interested by this most fascinating of metals.
The story of gold over the last 5,000 years is a fascinating one, which Peter Bernstein relates with verve and wit.
This is a 24-carat book on a subject close to all our hearts.
There may have been more academically rigorous histories of gold written, but few more erudite or entertaining.
This is a fine piece of economic history. A well-documented, authoritative read, this is also entertaining. ...will enlighten & enthrall.
The research is excellent.
Bernstein has done well to get such an exciting story together in one volume, and gold is fortunate to have such an erudite and fascinating storyteller. This book is easy to read and full of wonderful nuggets of information.
This book is an eloquent, brilliantly written historical review of how gold has influenced the evolution of monetary systems and trade, from early civilizations to the present day. Bernstein succeeds in presenting an enormous amount of research in a format as easy to read and as captivating as the best murder mystery.
A well worked history of the once mighty metal.
This is incredibly well researched and in-depth, a fascinating glimpse into the past and present of a commodity that has caused as much misery as it has happiness. This is truly a history of an obsession, and is well worth reading.
Bernstein's meticulous account highlights the way in which man's struggle for gold has consistently stimulated economic thought and debate.
Bernstein has taken base elements - history, politics and economics - and created a gem. He writes with passion and a certain amount of irreverence; the numerous flippant asides keep the tone light and engaging. What could so easily have been a dreary tome in less capable hands is fascinating to the end.
This is altogether a fascinating read.
Bernstein writes with style and verve and all human life is in there. Thoroughly enjoyable.
...readers with an interest in history or finance will welcome Bernstein's interesting history of gold and money in the West.
This accessible book will appeal to numismatists, economists and anyone with an interest in general history: it is both enjoyable to dip into and a good read from cover to cover.
Bernstein brings this story to life as a gripping, exciting and insightful work that combines many strands of history, politics and finance into a book of universal appeal.
...entertainingly tells the history of humankind's great obsession.
...History, myth and metaphor combine to produce an entertaining study of the dangers inherent in bullion worship. ... The book's real charm lies in its detail.
This is incredibly well researched and in-depth, a fascinating glimpse into the past and present of a commodity that has caused as much misery as it has happiness. This is truly a history of an obsession, and well worth reading.
The book furnishes a pleasantly glided backcloth to the current fashion for economic history.
This book contains enough history, politics and finance to be of serious academic worth.
Mr. Bernstein has turned this story–not an obvious golden opportunity for even a writer of Mr. Bernstein's skill–into a real page-turner.
Bernstein's volume is a tour de force with a satisfying conclusion: The characters in this drama prove themselves 'fools for gold, chasing an illusion.
There are sugarplums throughout the book....The pleasure of the book is in its sheer number of unknown places and interesting episodes.
The triumph of Peter Bernstein's book is that in the end you understand why and how it happened that the golden dog no longer barks. Bernstein is America's greatest living economic journalist."
The range of research evident throughout the book is staggering.... Bernstein's ear for the telling quote is pitch perfect.
Though he proceeds in roughly chronological order, US Historian and economist Bernstein aspires neither to a complete history of the precious metal nor a systematic analysis of its role in economics and culture. Rather he explores those events and stories involving gold that most appeal to him as illustrative of the desperation and ultimate frustrations that have inflamed human behavior. Annotation c. Book News, Inc., Portland, OR (booknews.com)
A lively, detailed account of civilization's star-crossed relationship
with this most fascinating of metals. Undoubtedly the only economics book
ever written that could honestly be described as fascinating.
Gold is the ultimate in tangibility. Bright and shockingly heavy, for centuries the stuff was the physical manifestation of value. The opposite, in other words, of the Internet.
Indeed, as Peter L. Bernstein points out in his illuminating new book, The Power of Gold, as an exchange medium, gold isn't much different from the 4-ton stone coins famously spent by the Micronesian people of Yap. Bernstein recalls, as a young economist, being shown the basement full of bullion held by the New York Federal Reserve Bank on behalf of several European nations. When one country wanted to pay another, the Fed simply lugged a few bricks from one closet to another.
Such efforts are clearly on the way out. The story of gold - and money - is one of increasing abstraction from bricks and coins to national chits, checks and now cybercash. This is just fine with the pragmatic Bernstein, author of the much-praised Against the Gods: The Remarkable Story of Risk. "The most striking feature of this long history," Bernstein writes, "is that gold led most of the protagonists of the drama into the ditch."
Bernstein vividly tells us how this happened, from the grisly death of Roman politician and bon vivant Marcus Licinius Crassus - down whose throat a vengeful (and ironic) Parthian reportedly poured molten gold - to the gold-induced global economic death spiral that followed World War I.
Along the way he treats us to interesting historical nuggets. "Cash" is the Tamil word for money, for instance, and was used to refer to some Chinese coins more than 2,000 years ago. Bernstein also reminds us that some scholars view L. Frank Baum's 1900 novel The Wizard of Oz as a parable condemning America's 1873 abandonment of bimetallism - that is, a silver and gold standard - for the yellow brick road of an exclusively gold standard. (The hard-money East was pro-gold, while debt-laden farmers in places like Kansas advocated the looser monetary policies associated with plentiful silver.)
Interestingly, Bernstein also observes that gold itself was an early medium used to abstract worth, citing the Lydian invention of gold coins around 650 B.C. "The transformation of gold into money democratized it," he writes. "Thanks to coinage, the ownership and use of gold after Lydia was no longer a royal prerogative. It was now literally in the hands of common citizens, even if only the most wealthy."
That was, of course, the beginning of the end for gold, since its weight and relative scarcity would make it grossly insufficient as currency in the technological age of mass affluence that was to come. Growth and democracy inevitably required more money and risk-taking than gold could support. As the author notes, "Financial rectitude, though much admired, has never been a sure road to prosperity."
Although written with verve, The Power of Gold is not a light read. It assumes a little too much understanding on the part of the reader of the complex interplay between foreign exchange, interest rates, price levels and fiscal policy, and gets bogged down for too long in the feuds of the Middle Ages. If you want a more rounded and accessible work, try Jack Weatherford's The History of Money: From Sandstone to Cyberspace.
But Bernstein has other fish to fry. Perhaps in keeping with his earlier book, his message here is that there is no real haven from uncertainty in life. Gold is no safe harbor, and in the longest of runs the dollar is unlikely to be safe, either.
To Bernstein, though, abandoning gold has at least meant growing up and getting comfortable with the risks of life. Wars, plagues and economic turmoil drove people to gold in the past. The question now is whether the risks posed by networked computers, hackers, esoteric financial derivatives and the sheer velocity of money will do the same.
The book is that rarity among popularized histories that neither insults the most informed reader nor dismays the least. Even more of a rarity is its cool, agnostic and knowledgeable treatment of a subject that too often has been claimed by apocalyptic types with loony agendas. And, rarest of all, perhaps, it's a financial book that doesn’t promise to make you rich. It might make you wiser, though.—The New York Times
With the same lively writing and sharp focus that distinguished his previous work, Against the Gods: The Remarkable Story of Risk, Bernstein shows how gold emerged as the manifestation of mankind's longing for power, beauty, and immortality. This is world history on a grand scale, with gold appearing as a focal point at every major juncture.—Business Week
