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248 of 265 people found the following review helpful:
4.0 out of 5 stars
The Financial Subplot, November 15, 2008
This review is from: The Ascent of Money: A Financial History of the World (Hardcover)
Niall Ferguson has written an easily accessible and very entertaining history of finance, ranging from the clay tokens of Mesopotamia 5,000 years ago to the hedge funds of today. The title of this book has apparently been modelled on Jacob Bronowski's "The Ascent of Man," and like that book it will be made into a television series. Being a television celebrity is not something that wins the admiration of one's peers in the history profession, to say the least. But those little rebukes are relatively mild compared to the scorn he received for his political views in Empire: The Rise and Demise of the British World Order and the Lessons for Global Power and Colossus: The Rise and Fall of the American Empire. In those works he argued that empire was beneficial not only to the mother country but the dominated countries as well. In this work he chronicles not only the history of money but also makes a case for liberalized finance.
Ferguson examines the financial subplot behind some of the major historical powers such as the role of money in ancient Mesopotamia, the denarius in Roman society, and gold and silver in the civilization of the Incas. He is very good in his descriptions of financial families like the Medicis and the Rothchilds, and how they became banking dynasties. Another memorable episode was the rise of Amsterdam as the world's financial center and the center's subsequent shift to London.
History is also filled with financial disasters of which we are well aware today. Ferguson tells the story of John Law and how he became France's head of finance. He engineered a financial bubble that took them several generations to overcome. Making matters worse, it occurred at the same time as the British South Sea Bubble.
Also instructive is the history of the first great globalization (1870-1914). (For this period also read Jeffrey Frieden's Global Capitalism: Its Fall and Rise in the Twentieth Century.) The world had become so economically interdependent that the pundits believed the possibility of war between great powers had been eliminated. This sentiment was famously expressed in "The Great Illusion" by Norman Angell.
Although this book was written before the current economic crisis, the last chapter is very prescient. "From Empire to Chimerica" tells of the symbiotic relationship between China and America. The combined country "accounts for just over a 10th of the world's land surface, a quarter of its population, and a third of its economic output, and more than half of the global economic growth of the last eight years". This relationship, in which China saves and America spends, and in which China's savings is used to enable America to spend even more, is clearly unsustainable. Ferguson sees this savings glut as the cause of the current subprime crisis. That, in my humble opinion, was one of the causes; there were many bad actors involved in this catastrophe, citizen-borrowers included.
Although it is not obvious to everyone in the midst of a crisis, Ferguson correctly points out that financial engineering is one of the great forces behind human progress. The history of finance is a process of creative destruction. Financial risk-taking is necessary for economic expansion and human development, and Ferguson does a good job in making the case. Too bad it reads like a script made for the History Channel.
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99 of 110 people found the following review helpful:
3.0 out of 5 stars
Readable and engaging, November 14, 2008
This review is from: The Ascent of Money: A Financial History of the World (Hardcover)
Historian Niall Ferguson teaches economic history at Harvard so he certainly has credentials for a book like this. While his historical knowledge is impressive his financial claims can seem a bit cavalier and broad-sweeping.
Ferguson celebrates financiers as the source of modern wealth and prosperity. He backs up his claim by a historical examination of the last 500 years. This includes the Italians in the late Middle Ages, as well as the Dutch in the 17th century and Britain's empire success which he partially attributes to the establishment of the Bank of England in 1694.
After setting the historical context Ferguson becomes a pundit on the current global situation. Commenting on those who speculate in the financial markets today Ferguson writes, "When people have a run of luck, they very quickly impute this to their own brilliance. Once you start interpreting your good fortune as your skill, you're very quickly a master of the universe who can never fall. That, of course, is precisely when you fall." He likens financiers to gamblers, which may not be a completely fair connection. Of course there is risk involved in investing, but the primary concern in the financial world is how to limit that risk, react wisely, and be patient.
As Ferguson considers the financial crises his assessment is neither overly positive nor calamitous. "Before this crisis," Ferguson says, "there were people who thought there would never be another recession--that kind of crazy, myopic, unhistorical belief. That was followed in the last month or so by wild panic, as if it's the end of the world."
Ferguson states the obvious when he declares we will all be affected by the current financial mess, and that it will take a while for the market to correct itself.
In short, if you like history more than finance, this is going to be an enjoyable book for you. However, if it's the other way around the details might be suffocating.
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113 of 131 people found the following review helpful:
3.0 out of 5 stars
TV tie-in, not a history book, December 20, 2008
This review is from: The Ascent of Money: A Financial History of the World (Hardcover)
When I was given this book, my heart leapt because I know Niall Ferguson is a robustly contrarian, sharp, articulate and well-informed historian, but it sank immediately that I saw that the book, like many of his recent works, was again based on a television series. Ferguson is a man of genuine talent; it is a shame he chosen to prostitute that talent. No doubt "The Ascent of Money" made for a TV show of far more than average quality, but the book is necessarily scrappy and somewhat shallow. It seems to evolve according to the picturesqueness of certain locations (the televisual imperative), rather than the logic of the argument. I would like to see the television link flagged much more prominently on the cover so one is made aware in advance that this is not a serious work of history, but a potboiler designed to raise funds so that Ferguson can boost his earning power to the levels of equally (or less) brainy college contemporaries who went into finance or the law. Frankly, I was disappointed. I hope Ferguson will get back to being a proper historian soon.
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