71 of 77 people found the following review helpful
5.0 out of 5 stars This is how we got to where we are; so, how do we get out of here?
Niall Ferguson again here brings us a history that is informative, entertaining and sobering. Being published in the midst of a global economic meltdown, for a book such as this, is a mixed blessing, as a step too far on the bearish side may make the author look like a doommonger, whilst being even slightly bullish might look blinkered. Ferguson, though, seems to manage...
Published on 28 Dec 2008 by Steve Keen
10 of 12 people found the following review helpful
2.0 out of 5 stars A bit disappointing....
When I was reading this book I couldn't help wishing that he would have gone deeper into the system of the ancient worlds, which only got scratched on the surface. He had some interresting cases in the book, but often they were coloured by the author's own attitude towards the subject which I find rather unfortunate. Therefore I would only recommend this book, if your...
Published on 23 Sep 2010 by Mads Graff Lorenzen
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71 of 77 people found the following review helpful
5.0 out of 5 stars This is how we got to where we are; so, how do we get out of here?,
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Niall Ferguson again here brings us a history that is informative, entertaining and sobering. Being published in the midst of a global economic meltdown, for a book such as this, is a mixed blessing, as a step too far on the bearish side may make the author look like a doommonger, whilst being even slightly bullish might look blinkered. Ferguson, though, seems to manage to pull it off, though that equally is a spot evaluation. However, though it's clear where his loyalties lie in the pro/anti capitalism debate, the balance of the narrative tends nevertheless towards the various shocks delivered to the system rather than towards the prosperity delivered, albeit still strictly speaking to a relative minority of humanity, by markets and their lubricant, money.
As it turned out, some of the ground covered was familiar territory to me, bringing together strands of other books I've read recently, including Findlay and O'Rourke's Power And Plenty, Bentley's A Book Of Numbers, Schama's The American Future and even Lonely Planet Andalucia.
But some of it was new. He gives the origins of ghetto (a geto was a casting, and the original ghetto was in Venice's foundry district); explains that a consol gets its name from "consolidated fund"; and confirms that "dollar" comes from the German "thaler", on which the Spanish based the piece of eight, the world's first truly global currency.
Ferguson is also adept at telling stories: his account of the First Opium War, for example, is probably the clearest I've come across, and in the chapter on housing there is an excellent explanation of how the development of securitisation by Salomons ultimately led to the sub-prime meltdown.
He's not always right. In a description of segregation in Detroit and the 1967 riots he describes Aretha Franklin as a Motown star, which she almost, but never quite, was. And the final chapter begins with speculation that the rest of the world has decoupled from the United States economically. Unfortunately time has not been kind to this notion, with only Brazil, it appears, unaffected so far (December 2008), oil down by over $100 a barrel from its mid-08 peak, and even China's growth looking very shaky. But if there are any signs that "His pages are hot with proof-stage tyremarks", as one newspaper review alleged, then Ferguson is not alone in his revisionism: after all, even the German finance minister got it wrong. And in mitigation, this is the man who ended a previous television series (Colossus) warning that the United States was "heading for a credit crunch".
This is not, to be sure, a technical book. Readers seeking more detail of some of the principles described should go to the likes of Brealey and Myers's Principles of Corporate Finance. However, Ferguson more than succeeds in achieving his objective of providing a foundation of financial awareness for the general reader, providing plenty of food for thought. Amongst the morsels on offer: in better days for Argentina, the other Harrods was in Buenos Aires; the birth of stock markets was in 17th Century Netherlands, a country now often reduced to two letters in "Benelux"; and he ultimately really hits the button marked Panic by reminding us of the consequences of al-Qaeda's effecting a nuclear strike, of a further Katrina-like event, or of inundation courtesy of global warming.
So, great book, and so much for the past, but what of the future? Ferguson describes himself as a "liberal fundamentalist", and certainly descriptions of him as "rightwing" look overdone. Nevertheless, there seems to be a faith implicit that capitalism can cure itself, counter to the standard Marxist analysis of a bankrupt and inevitably doomed system. So where, as Larry Elliott has asked, is the intellectually endorsed social democratic alternative? It is implicit, ironically, in the response of the US government, but the measures being taken by that and several other governments has the appearance of a huge geoeconomic experiment unsupported by any clear theory other than it is the opposite of what was done in the 1930s. What is needed is a Keynes for the noughties. I'm looking forward to reading Krugman's new work to see if that is where the gap is filled.
37 of 41 people found the following review helpful
5.0 out of 5 stars history of finance - a page turner - who'd have predicted that!,
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This is an excellent broad history of our financial system - covering the development of bond & stock markets, our obsession with property as an investment and more. What makes this a 5 star read is linking historical events to our current predicament - both as examples of how things how gone wrong before and as direct causes of the latest credit crunch. Of course given it's breadth it can only touch on many topics, but for those areas where I have read more fulsome accounts (such as Enron, LTCM) I found his summaries to be very pertinent.
The accounts of various bubbles and crashes are interesting and somewhat comforting - the finance world seems to be phoenix-like in its ability to collapse and re-generate so maybe we are not without hope, however in his description of 'Chimerica' you do wonder if we are at the beginning of a new age, the transfer of power to a new owner...too early to say perhaps?
What is less comforting are the parallels he draws with pre-WW1 complacency that there could never be a global war because countries were too interdependent financially for this to be in anyone's interests, it's a chilling thought as he describes how future historians could look back and see the root causes today, just as current historians do today for WW1.
Overall I'd say this is a great introduction to some complex topics, and even where the explanations were a bit mind-boggling (still don't get interest rate swaps!) this doesn't detract from the flow of the story. Two things would be a great addition to this book - a glossary of some of the financial terms and a selected bibliography for further reading.
26 of 29 people found the following review helpful
4.0 out of 5 stars An Entertaining Review of Financial History,
This book accompanied the Channel Four television series of the same name, and apart from a few areas where more detail is given, sticks very closely to the series. Ferguson covers very early days of using money and then gets going on money lending (it was against the principles of the Catholic Church) and hence carried out by Jews in the first ghetto (or foundry) in Venice. He progresses to bonds and the fortunes generated by Nathan Rothschild betting against government bonds after the defeat of Napoleon. Then stocks or shares are considered and the early problems with schemes that resulted in investment 'bubbles', the leading role of the Netherlands and the Dutch East India Company, the colossal swindles of John Law running a pyramid scheme in France with the Mississippi Company and the foundation of New Orleans. The failure of insurance companies in really big disasters and the growth of national insurance schemes. It is here that the role of Milton Friedman and the Chicago Boys and the very successful Chilean system of private managed state pension and insurance schemes are described, all under the rule of President Pinochet. This is a system of save-as-you-go rather than pay-as-you-go used in Western European democracies. The risk of investing in property is discussed, generally with a view to showing that there is more risk than supposed, an argument that I think is rather overdone especially for a country like Britain that has a net immigration surplus and, therefore, a built in pressure on housing. Finally the present inter-relationship between American borrowing and Chinese lending is reviewed and their apparent interdependence suggested. On the whole the book is entertaining and has something of a 'Gee Whiz' feel about it. It is not a financial textbook and is not the place to find convincing explanations for some of his assertions, indeed a few explanations are somewhat muddled.
8 of 9 people found the following review helpful
4.0 out of 5 stars Good,
This is one of the best books I have read so far this year. It is well-written and interesting and I felt no need to have seen the TV series (I didn't). The only reason for giving it four stars rather than five is that his criticism of those responsible for what has happened recently was somewhat veiled and a bit politically correct. That said, I suppose a lot of it was written before the full picture of the calamity currently afflicting us had emerged. Nevertheless, I learnt a few things and enjoyed it at the same time.
164 of 192 people found the following review helpful
4.0 out of 5 stars Comments by Michael Calum Jacques, author of '1st Century Radical'.,
The title of this book makes quite a claim. Niall Ferguson is a Harvard University professor from the UK, who produced a volume on the story of the Rothschild financial dynasty in the late 1990s, The book certainly has a number of interesting features e.g. its summary of recent events both precipitating and within the housing market 'crisis' and international commercial relationships between superpowers. Nevertheless, the impression is that the work - fascinating though it is in parts - may just have been a little bit 'scraped together', somewhat hurried.
Given the lightning blitz which has rocked all corners, streets and avenues of the globe's financial institutions, this is perhaps understandable and even forgivable, almost. Recent news bulletins have featured housing crises, bank runs and a possible recession looming forbiddingly. Given that he presumably had only human resources at his disposal, the author may well have reached for a crystal ball as a source of greater predictability than the global market indicators have been able to offer any of us, himself included, of late.
Returning to our initial point, viz. the sheer scope this work claims to encompass, this reviewer particularly appreciated Ferguson's sweep through the civilisations of the past in this Financial History of the World; thus the Inca's spurning of gold and silver as money, the pre-Christian Mesopotamian/Babylonian credit notes in the form of clay tablets and many more indicators of the development of, and various civilisations' attitudes towards, money and finance in general. Yet Ferguson omits to make, as far as this reviewer can see, any reference to the light which spectral analysis technology (through its illumination of discarded domestic papyri texts) has thrown on the surprising wealth of certain women within the ancient world.
Ferguson's philosophy, which he keeps hidden up his sleeve for most of the book, proposes that finance evolves through natural selection. He uses this hypothesis to account for the appearance and denigration of new financial models which respond to new demands made by various societies. That analysis may risk a degree of oversimplification, but that will be variously assessed by the background, training, and disposition of the reader. All that being said, this is a challenging and a stimulating read.
Michael Calum Jacques
2 of 2 people found the following review helpful
4.0 out of 5 stars Readable, descent popular history,
This review is from: The Ascent of Money: A Financial History of the World (Paperback)
Popular history must inform and entertain, and this volume does both. The pace is brisk and the demarcation of the subject matter, for example into sovereign debt, equities, home ownership, welfare states etc. provides momentum and facilitates better recall. In other words, it prevents boredom setting in and you remember what you've read more than is often the case with history books (speaking for myself of course!).
I think this works well as a very broad-brush history of money and finance.
S Gleadall - author of The Metaphysics of Markets
The Metaphysics of Markets
7 of 8 people found the following review helpful
4.0 out of 5 stars The Ascent of Money,
The Ascent of Money: A Financial History of the World
Fascinating insight into the highs and lows of the world of finance which affects us all. Addictive reading written in a language understood by even the layman!
10 of 12 people found the following review helpful
4.0 out of 5 stars The Root of all Evil?,
Anyone interested in the financial events of the past year or two will enjoy this witty, accessible and easily read account of the birth, life and possibly the death of banking, the international Stock and Bond markets, and our good friend securitised debt.
Ferguson is Professor of Economics at Harvard - but don't let that put you off. His unbiased, insightful writing takes the sting out of some of the dryest informational chapters, but any self-respecting anti-capitalist and indeed pro-capitalist will find this essential reading.
How financial bubbles form and are burst, the winners and losers, and more frighteningly, how finance has been behind every important event in modern human history. From the defeat of Napoleon at Waterloo to the Italian Renaissance.
It forms the basis for our civilised society whether we like it or not.
6 of 7 people found the following review helpful
4.0 out of 5 stars Interesting, very interesting,
I liked this book and found it's style easy to read and comprehend, but I do wish the author would have explained some of the financial terms better, or in more detail.
To us mere human beings, some of the terminology used is not familiar, and I would like them to be have been explained in more detail.
All the same, a great read.
9 of 11 people found the following review helpful
5.0 out of 5 stars Book of our times,
When every time you switch on the radio, there is another story of financial collapse and the description of the worst recession since the Great Depression of 1929, it is very instructive to see the situation in its historical context.
Not that there is any evidence that the major players in the cause of our current credit crunch learnt from history, although there is evidence that the world financial leaders are not making the same mistakes in trying to get us out of it - they appear to have learned that inept or inflexible monetary policy in the wake of a sharp decline in asset prices can turn recession into depression as per 1929.
Behind each great historical phenomenon there lies a financial secret. Whether the Renaissance's market for art and architect was due to the Medici's applying oriental mathematics to finance, the Dutch prevailing over the Hapsburg Empire due to the creating the first world stock market, the French Revolution precipitated by John Law and the Missippi Bubble or the Unionists success against the Confederates in the American War of independence due to the successful blockade of New Orleons and the collapse in the cotton bond market..
Niall Ferguson claims three insights he gained from writing the book and the reason it is worth trying to understand the development of the financial system:
1. Poverty is not the result of rapacious financiers exploiting the poor - it has more to do with the lack of financial institutions, not their presence. Only when borrowers have access to effective credit networks can they escape loan sharks, only when savers can deposit money in safe banks will it get invested.
2. The more financially integrated the world becomes the greater the opportunity for the financially knowledgeable wherever they are. The world can no longer be divided into the rich developed and the poor less developed.
3. Few things are harder to predict than the timing and magnitude of financial crises.
He takes you through the great revolutions in the ascent of money from its development as a means of exchange.
The first revolution was the creation of credit by banks born in the 13th and 14th century in Northern Italy and developed by the Medici family.
The second was the birth of the bond market again by the Italian city states in the 14th and 15th centuries who needed the money to hire military contractors to fight their wars for them. Later on, the Rothschilds with Nathan's brothers bankers in all the major capitals of Europe in the 1800's personified the opportunity for financial innovation in the bond market.
The third was the development of the joint stock market initially by the Dutchin their creation of the Dutch East indies company in the 1600's.
The fourth - the creation of Insurance companies - Niall Ferguson credits to the Scots in 1744.
It is very much a book of its time with a lot of attention to booms, bubbles and busts over the centuries and effect of hedge funds in the creation of our current woes. In some ways a technical book - I do not pretend to understand all the financial instruments he discusses but at the same time immensely readable. And Important.
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The Ascent of Money: A Financial History of the World by Niall Ferguson (Paperback - 5 April 2012)