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The Cash Nexus
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The Cash Nexus

Money and Power in the Modern World, 1700-2000

Niall Ferguson
Basic Books, 2002

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Editorial Rating

8

Qualities

  • Comprehensive
  • Innovative
  • Eye Opening

Recommendation

It would be a mistake to emphasize the word "cash" in this book’s ambivalent title without giving equal weight to the word that follows, "nexus." A nexus is the bond between two disparate things and, indeed, this is a book about the intersection of power and money. Its thesis, to the frustration of economic determinists everywhere, is that while money matters, other things matter more, at least when it comes to the cultural chessboard of international politics. One might quibble that author Niall Ferguson underemphasizes the extent to which competition for economically vital scarce resources leads to war. The other caveat is that he refers to the U.S.’s reluctance to go to war with a pre-Iraq state of mind. Yet, the author is an accomplished historian who capably supports his arguments. He manages overall to portray economic history in all its rich nuance, detail and complexity. His premise that war, not economics or politics, is the great engine that has driven the evolution of the modern welfare state is as enlightening as it is chilling. getAbstract.com highly recommends this book to the lay reader with a developed interest in history, politics and, especially, economics. However, a warning is in order: Those who only read the headlines may find this just a little too deep.

Summary

The Color of Money

"Money makes the world go ’round," sang the master of ceremonies in Cabaret, "of that we are all sure." Well, not everyone. The notion that economics determines the course of every event is remarkably resilient. "Money answereth all things," Ecclesiastes states. "The love of money is the root of all evil," says Paul in I Timothy, 6:10. The "secular religion" of Marx and Engels put a scientific patina on the notion that economics was at the heart of human endeavor. Marxism’s conspicuous collapse did not deflate economic determinism, which is alive and well. It survives in the form of several popular notions, such as the idea that economic growth provides the basis for the spread of democracy, that economic success ensures re-election and that economic strength unlocks international power.

Other impulses, including the drives for sex, violence and power, are capable together or individually of overriding the influence of money. They can lead, for example, to war. Economists typically use the term "shock" to refer to military upheavals that are considered "exogenous" to their elaborate models, for instance, "oil shock" or "Gulf War shock." The historian...

About the Author

Niall Ferguson is a historian who wrote The Pity of War, Virtual History and the award-winning House of Rothschild. He is professor of political and financial history at Oxford, and visiting professor in economics at the Stern School of Business, at New York University.

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    A. 4 years ago
    It is about monetary system BASED ON GOLD STANDARD or fiat money. I think such monetary system is what is called wartime monetary system, adopted by invaders including criminals who escaped political purge in their own countries. We need rethink the validity of the current monetary system because it requires war.