Wednesday, February 24, 2010

"The Ascent of Money: A Financial History of the World" by Niall Ferguson

So go back about 6 months, and I get a call from my parents, back in Canada. Who's going where, how's the garden, what's the next trip they're planning. And they mentioned to me they were watching this really interesting documentary on PBS called 'The Ascent of Money' and it was right up my alley. A couple weeks later, I was in a bookstore in Shanghai and saw it, so I picked it up. While I slogged through The Count of Monte Cristo, this huge book sat on my coffee table for months and months.

Having graduated in Economics, there were bound to be some nuggets in there that caught my eye. I wasn't really stoked for a review of my college textbooks though. Luckily, most of this book is great read because of the story, not the financial meandering (sparse, I promise). The context of what was going on, say, when the first banks started cropping up in Italy is what makes it so fascinating. And what a marvelous story it is: man's quest for riches, dating back to the Babylonians. So allow me to rephrase, this is an Economics book, that is more Archeology and History than x/y graphs and Interest rates.

The Ascent of Money track developments of money, from sheckles to gold pieces, and eventually paper and later online banking in context. A brilliant ride, he shows how , effectively the great wars, won and lost, had a few rich men pulling the strings (or at least betting on the outcome!). The section on the Rothschild family is awesome.

In as pleasant language as humanly possible, he outlines the development of the stock market, what the heck are bonds, why we need to know this stuff , and perhaps more interestingly, the families and empires that were built with the knowledge and understanding of their wallets, and just what incredible power they had.

He outlines the earliest developments of insuarance companies and how similar they are to the modern health care crisis of today (Britain, US, Japan, for example). And you can actually see right where everything broke down, where greed started to be institutionalized.

Obviously I loved it. The whopping Financial history of the world, leading up tot he Enron disaster, Long Term Capital Management, and the Subprime lending crisis (which, everyone hears about, but few actually really understand).

Not surprisingly, he dedicates a full chapter to the resurgence of China. Ferguson coins the symbiotic relationship with America "Chimerica": China lends money to the US, the US uses that money to buy from China (plus interest payments). It's lovely.

What I like the most about this kind of book, is that it does its best to hide the real nitty gritty financial (read: dull) minutiae, but gives you enough so you can follow along in what is really an amazing story.

If this subject is completely foreign to you, it should be a delightful (and enlightening) book. And yeah, I guarantee that after reading it, you will feel like the smartest person in the room. For a few days, anyway. ;)

Follow this author on Twitter@nfergus


zero said...

Another great review~~Every time you introduce a new book, I am eager to read it~~Maybe for me, "The Ascent of Money" will be more worth read than "Economics" by Samuelson Paul Anthony recently..

Michael Robson said...

Sounds great. There's not too much 'Economics' in here, but lots of great History... so I hope you get a chance to pick this up. I got mine in People's Square...Definitely worth picking up.

felicevio said...

I was "stalking" my facebook friends and then stumbled upon your blog. I think that you have great book reviews!

It's quite interesting that we just discussed Ferguson in class this week.I read a few exceprts from the book (as required..)and it's definately not an easy reading for me. But then your review intrigued me again.


Michael Robson said...

Thanks Viola! I've been slogging through a MASSIVE book you might be interested in, I've got another 50 pages.. I'll try to get it out this weekend.

I'm working in Water Technology, so every now and then I want to use these reviews to keep up on the latest in the Water biz.... I really love these reviews, I just have to read faster and pick smaller books :P...

Ferguson was a great read (I graduated in Economics so I totally geeked out), I hope you enjoy the next review I put up. An absolutely massive tome going back to the earliest Egyptian and Chinese civilization and describing the way water shaped history, wars, and future movement in India, China, Middle East, etc to come. See you! Mike