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The Ascent of Money
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The Ascent of Money

A Financial History of the World

Niall Ferguson
Penguin, 2008
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Editorial Rating

9
getAbstract International Book Award Winner 2009

Qualities

  • Comprehensive
  • Overview
  • Engaging

Recommendation

Niall Ferguson offers a comprehensive collection of anecdotes and observations about the development of finance. He begins with a brief discussion of pre-money societies. Then, he carries you through the birth of banking in Renaissance Italy, the 18th-century Mississippi and South Sea bubbles, the role of Nathan Mayer Rothschild in the Napoleonic Wars, and the 20th-century transition from the gold standard to free-market derivatives and currency trading. getAbstract finds Ferguson’s book eminently readable, entertaining and informative. One caveat: the author’s approach is more that of a journalist than a historian, so he does not advance much of a comprehensive theory to explain the events he discusses, even the ones that are still occurring, notably, the financial crisis that began in 2008. This tasty financial history thoroughly covers who, what, when, where and how, a feast of facts with not quite enough “why” for dessert.

Summary

The Mountain of Money

Idealists beginning with Karl Marx have excoriated money and the “cash nexus” that they believe threatens human relationships. However, the only societies that existed without money were singularly ill-equipped to survive. Hunter-gatherer cultures lacked money and had remarkably high rates of violent deaths. The Inca Empire had no money, but Francisco Pizarro – who was very interested in money – conquered it almost single-handedly. In Bolivia, he and his men discovered a mountain of silver ore they called Cerro Rico (“rich hill”). They sent tens of thousands of tons of silver back to Spain, which discovered something new and strange: All this money did not make it rich. The increase in the money supply merely led to increased prices. In some ways, Spain’s silver impoverished it by preventing the development of the viable industries and democratic governmental structures that could have helped it fit a changing world.

The Birth of Banking

Meanwhile, in Italy, the Medici played midwife to the distinctly modern institution of banking. There, as elsewhere, people who needed credit had to use high-interest loan sharks who encouraged...

About the Author

Niall Ferguson is Laurence A. Tisch professor of history at Harvard University, senior research fellow of Jesus College, Oxford University, and a senior fellow of the Hoover Institution, Stanford University. His books include Paper and Iron, The House of Rothschild, The Pity of War, The Cash Nexus, Empire, Colossus and The War of the World.

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