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39-Mar-Apr-2009
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A Financial History of the World

A-The Ascent of MoneyIn a nod to Jacob Bronowski’s The Ascent of Man, controversial author Niall Ferguson, a Harvard professor and Oxford senior research fellow, has published an expansive history of finance as a supplement to his recent British television series. Bookmarks has also reviewed The War of the World, 4 of 5 Stars Jan/Feb 2007; Colossus, 2.5 of 5 Stars Sept/Oct 2004; and Empire, 3.5 of 5 Stars July/Aug 2003.

The Topic: "The ascent of money has been one of the driving forces behind human progress," asserts Niall Ferguson. In The Ascent of Money, he explores the evolution of credit, debt, and risk management—from the development of rudimentary accounting in Iron Age Mesopotamia to today’s subprime mortgage crisis. Arguing that history is often a product of economics, he illustrates the financial booms and busts behind the dawn of the Renaissance, the French Revolution, the defeat of Napoleon, and the outcome of the Civil War. As a human invention, finance is an inevitably flawed system, he explains, which reflects, mirrorlike, the human psyche and its emotional responses to stimuli. "It is not the fault of the mirror," he claims, "if it reflects our blemishes as well as our beauty."
Penguin. 441 pages. $29.95. ISBN: 1594201927

Boston Globe 4 of 5 Stars
"Ferguson has produced a timely book that is indispensable, not just because of the global financial crisis, but because, being one of the greatest historians writing today, he masterfully covers his broad canvas in a way that remains lucid and accessible. … And yet Ferguson’s enthusiasm to teach us the lessons for today—important though they undoubtedly are—sometimes gets in the way of a proper rendering of the past." James Grant

Washington Post 4 of 5 Stars
"The pleasure of reading Ferguson’s treatment comes partly from the clarity of his explanations of financial concepts but mostly from his pen portraits of the extravagantly gifted and flawed characters who have led money’s long rise. … Ferguson has … written an admirably illuminating book that will take its place beside such modern classics as John Train’s The Money Masters, Peter L. Bernstein’s Against the Gods, and Adam Smith’s Supermoney." Shelby Coffey III

New York Times 3.5 of 5 Stars
"Although The Ascent of Money is pockmarked by digressions (about things like the Black-Scholes model of options pricing) that many lay readers will find arcane and difficult to understand, the book as a whole is animated by Mr. Ferguson’s narrative gifts, among them his ability to discuss complex ideas in user-friendly terms." Michiko Kakutani

St. Louis Post-Dispatch 3 of 5 Stars
"In general, or at least when it’s covering general topics, Ferguson’s book reads more easily than you might suspect. … But when Ferguson gets into the details, many readers may find that they contain not only the devil but also the density of processed uranium." Harry Levins

Sunday Times (UK) 2.5 of 5 Stars
"The book bears the hallmarks of a work written to accompany a television documentary. Furthermore, the dramatic events of recent weeks have made some of Ferguson’s claims appear outdated." Edward Chancellor

Times (UK) 2.5 of 5 Stars
"The most memorable parts of The Ascent of Money are devoted to telling, or retelling, stories from the dark side of finance. … The book struggles to find its unifying threads and the task is not helped by occasional lapses into longer passages in which explanations expect too much reader expertise in economic theory." Robert Cole

Guardian (UK) 1.5 of 5 Stars
"This virtuous journey is presented to the reader in a barely concealed TV-script format, with all the tropes that discipline demands: the notion of secret discovery (‘Behind every great historical phenomenon there lies a financial secret’); the importance of journey (‘Read this book and you will understand why … ‘); the ever shorter, more emphatic sentences and the need for visual scene-setting. … Instead of an inquiring history, what we are left with is a reverential panorama of neoliberal capitalism." Tristram Hunt

Critical Summary

Niall Ferguson makes a strong, compelling case for the development of money and banking as a catalyst for the advancement of civilization. Yet while some critics praised his clear, comprehensible writing, punctuated with anecdotes and historical details, others were nonplussed by his explanations and narrative detours. Several critics also bemoaned the book’s choppy and uneven structure—an echo of the episodic, six-part television series it was meant to accompany. So it seems the UK critics liked the book less because they had seen the show. Though perhaps best suited to readers with a fundamental understanding of financial terms and theories, Ferguson’s latest work provides valuable insight into the inner workings of the global economy, past and present. For interested readers, it demonstrates how our current fiscal meltdown fits into the bigger historical picture and laments humanity’s perennial inability to learn from this history.

Cited by the Critics

Manias, Panics, and Crashes A History of Financial Crises | Charles P. Kindleberger (1978): Currently in its 5th edition (and updated through 2005), this classic take on the psychology behind the world of finance analyzes four centuries of speculative bubbles and their calamitous consequences.

Extraordinary Popular Delusions and the Madness of Crowds | Charles MacKay (1841): In this engaging 19th-century history of popular human foibles, often quoted by economists and financiers, Scottish journalist Charles MacKay debunks myths, superstitions, and everyday foolishness, including alchemy, fortune-telling, and fashion. He also devotes three chapters to speculation and irrational behavior in financial markets.