Product Description Niall Ferguson follows the money to tell the human story behind the evolution of finance, from its origins in ancient Mesopotamia to the latest upheavals on what he calls Planet Finance.
Bread, cash, dosh, dough, loot, lucre, moolah, readies, the wherewithal: Call it what you like, it matters. To Christians, love of it is the root of all evil. To generals, it?s the sinews of war. To revolutionaries, it?s the chains of labor. But in The Ascent of Money, Niall Ferguson shows that finance is in fact the foundation of human progress. What?s more, he reveals financial history as the essential backstory behind all history.
Through Ferguson?s expert lens familiar historical landmarks appear in a new and sharper financial focus. Suddenly, the civilization of the Renaissance looks very different: a boom in the market for art and architecture made possible when Italian bankers adopted Arabic mathematics. The rise of the Dutch republic is reinterpreted as the triumph of the world?s first modern bond market over insolvent Habsburg absolutism. And the origins of the French Revolution are traced back to a stock market bubble caused by a convicted Scot murderer.
With the clarity and verve for which he is known, Ferguson elucidates key financial institutions and concepts by showing where they came from. What is money? What do banks do? What?s the difference between a stock and a bond? Why buy insurance or real estate? And what exactly does a hedge fund do?
This is history for the present. Ferguson travels to post-Katrina New Orleans to ask why the free market can?t provide adequate protection against catastrophe. He delves into the origins of the subprime mortgage crisis.
Perhaps most important, The Ascent of Money documents how a new financial revolution is propelling the world?s biggest countries, India and China, from poverty to wealth in the space of a single generation?an economic transformation unprecedented in human history.
Yet the central lesson of the financial history is that sooner or later every bubble bursts?sooner or later the bearish sellers outnumber the bullish buyers, sooner or later greed flips into fear. And that?s why, whether you?re scraping by or rolling in it, there?s never been a better time to understand the ascent of money.
SHORT SIMPLE BOOK, TRIES TOO HARD TO DELIVER TOO LITTLE November 23, 2008 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.
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.
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.
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.
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.
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!
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 of the markets, but there too he insists on playing on Charles Darwin's Descent of Species, much as his title plays off Jacob Bronowski's Ascent of Man. The only problem is that the title of the Epilogue must convey the current sad state of affairs, and it does, but to explain the title as having a double meaning, that it also refers to the organic evolution of finance, is too kitchy and clumsy. Such clever simplicities pervade the book.
Finally, the book inevitably also misses the mark on account of the messenger. Niall Ferguson is at his best a neo-imperialist who believes in the superiority of one dominant empire, versus today's multipolar world. Such a stance cannot but weaken both his credibility and capability in explaining finance, which is at its core a diffused, democratic, even chaotic, system. In sum thus, this book is too quickly written, too carelessly put together and too clumsy in its conclusions to have a long shelf life.
A MUST READ! November 23, 2008 I now know from reading this book that the author is an honest, hard working, modest and generous guy with an eye for the HARD TRUTH.
A MUST READ!
Money makes the world go round November 20, 2008 12 out of 12 found this review helpful
If 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.
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.
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.
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 :)
Who says the financial world is confusing and bewildering? November 20, 2008 3 out of 3 found this review helpful
I'm not sure when Niall Fergusoon finds time to sleep... Fresh from a series of lively, accessible histories focusing on geopolitics -- the concept of empires, warfare, etcetera -- Ferguson, far from taking a well-earned rest, has tackled the toughest topic of all: the history of the global financial system. The author of other books on finance-related topics (The Cash Nexus: Money and Power in the Modern World, 1700-2000and The House of Rothschild, the World's Banker 1849-1999), the author may seem to have returned to his roots. In fact, as his book makes clear, understanding how money and finance works can explain a lot about human nature and thus about our social and political institutions. Understand what money is, how it is made, invested and transfered, and you understand issues like equality, political instability and economic progress. After all, as he recounts, great fortunes were made by those willing to take risky financial bets on the eve of the battle of Waterloo. When final word of Napoleon's defeat arrived, the seeds of the Rothschild's vast fortune were sown, and the apparently nerveless Nathan Rothschild rode his stake in British government bonds higher and higher. Ferguson has a knack for making this material accessible, whether it's the nature of what earliest civilizations considered to be "money" to the religious dilemmas that hovered around the concept of usury. (The popes in Rome denounced interest as usury.) Of course, in the current environment, the most compelling part of the book will be the chapters Ferguson devotes to financial bubbles and in particular to the ongoing mayhem in our global financial system. Today's Rothschilds, those who have let their bets ride and rolled the dice over and over again, have finally lost out, and Ferguson gives what some are likely to view as an overly-simplistic analysis of the causes of this. (But this simplicity is likely to be very welcome to all those on Main Street who still view Wall Street as, in Ben Bernanke's words, an "abstraction".) The most solid part of this analysis is, not surprisingly, the historical component. Thankfully, Ferguson avoids falling into the trap of giving readers yet another look at the great tulip bubble. Instead, he launches into an analysis of what kinds of risks speculators have taken throughout history, and the various ways they have come to grief. The final part of Ferguson's argument is perhaps the weakest, although perhaps that is only because of the book's timing -- smack in the midst of financial chaos that he couldn't have imagined when he delivered the final manuscript. His look at behavioral finance is intriguing and welcome; his analysis of the behavior of today's "money movers", such as hedge funds is too simplistic. I'll look forward to reading an updated edition at a later date. Most provocative of all are Ferguson's final conclusions about the role of China in the global financial system. For now, at least, the concept of decoupling -- much talked of before 2008 -- seems to have fallen by the wayside; in the current bloodbath, everyone is suffering in some way. "What price a subprime superpower?" he enquires, in the context of emerging global rivals. This, too, is a story that may be better told in a few years' time, since many of the most important issues can today be framed only as questions. This is not a book for hardcore Wall Street folks or even those with a reasonable knowledge of the way financial markets have evolved (securitization, credit derivatives, hedge funds, etc.), unless they also have a strong interest in history. There are many other, better and more detailed books to satisfy them. This work, in contrast, gives any reader a firm base of knowledge as to how and why financial systems evolved. Perhaps it may even give them comfort that as we have survived periods of extreme financial crisis, so we will -- somehow -- survive this one. For anyone interested into delving into one particular era touched on by Niall Ferguson, I'd highly recommend the following: Medici Money: Banking, Metaphysics, and Art in Fifteenth-Century Florence (Enterprise) (Enterprise)
A history we all need to understand..... November 17, 2008 9 out of 12 found this review helpful
The Ascent of Money: A Financial History of the World by Niall Ferguson in one of the most timely books of the year. Appearing as it does in one of the largest and far reaching financial debacles of the modern world, one has to wonder if the timing is just coincidence or whether the financial gods are just having a quiet laugh.
As an aside, if you remember anything from your Money and Banking course you may have taken in college, then some of this material will be familiar. What is new, and certainly worth the cost of the book, are the interesting historical connections that Ferguson manages to create between the topic of money and events that have played out throughout much of recorded history. To call these connections interesting or eye-opening is a gross understatement. For the historian, regardless of whether you are a professional or amateur, the information provided by Ferguson is nothing more than astounding.
The word credit has its root in the Latin word "credo" or "belief". The very act of taking money in payment for some delivered product or service is an act of faith. The faith part comes in believing that the "money" received can, in- turn, be used to buy some other product or service. It doesn't matter what we use for money. Money could be anything we place value on from colored stones, sea shells, precious metals, gems, or simply financial credits. It helps if the "money" is easily carried which makes precious metals (gold and silver) such a convenient commodity and why we don't carry around bales of cotton or kegs of wine (but they have worked in ages past). Of course, financial credits, little electronic binary 1's and 0's, are best of all, but, as with all other forms of money, require faith. All of this is truly astounding when you look at commerce world-wide and realize the underpinnings are so simple.
Ferguson's The Ascent of Money reminds me so much of Fernand Braudel's Civilization and Capitalism: 15th - 18th Century, especially volumes 1 (Structures of Everyday Life) and 2 (Wheels of Commerce). Like Braudel, Ferguson's words are enlightening and surprisingly useful in today's world. Simply understanding how the world functions is worthwhile knowledge and Ferguson helps provide that knowledge. Lets face it, trading stock today isn't all that different than trading stock in 17th century London or Copenhagen at its most fundamental point. The Ascent of Money is written for the lay reader. You don't need to be a financial genius to enjoy this book. Well researched with terrific notes.
I highly recommend The Ascent of Money by Niall Ferguson even if you don't have much more than the cost of the book. It'll be money well spent.
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