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Book Review of The Ascent of Money by Niall Ferguson

The Ascent of Money Book Review

When it comes to money, I live in the world of microeconomics and personal finances:  paying my bills, perplexing over taxes, and putting some aside for the future. I am a financial layperson. Reading Niall Ferguson’s book, The Ascent of Money, taught me a whole lot about money. Now, I’m no authority, but at least I’m slightly more informed about my ignorance.

Book Review of The Ascent of Money, by Niall Ferguson

Overview of The Ascent of Money

The book is divvied up into six massive chapters. The cryptically artsy chapter titles don’t describe what’s in the chapter, so I’ve attempted to describe it for you, after the “or.”

  1. Dreams of Avarice:  or how money came to be
  2. Of Human Bondage:  or the scary world of credit, and how finance doesn’t function without it
  3. Blowing Bubbles:  or everything you didn’t know about bonds, stocks, shares, and trading.
  4. The Return of Risk:  or why people by insurance, and why businesses buy insurance, and the fat cats that live large as a result (hedge fund managers)
  5. Safe as Houses: or real news about the real-estate market. I found this chapter to be very interesting after having read Sundown Towns a book which dealt a lot with real estate topics.
  6. From Empire to Chimerica: or International Finance 101:  How American and China form an uneasy financial alliance that’s bound to end in trouble someday. (Get it? Chimerica. China + America + Chimera = Chimerica. Witty.)

Observations on The Ascent of Money

  • The Ascent of Money is an easy read. You’ll have to work through a lot of data and footnotes, but it turns out to be quite illuminating. I have more interested in history than I do in finance, and this book brought the two disciplines together in a way that made it very interesting.
  • Niall Ferguson is British, so he primarily writes to a British audience, but has a lot of information about other countries as well. His historical and financial research led him to Brazil, Japan, and all the G8s. The international scope of the book was fascinating.
  • Ferguson’s view of the financial situation of the world tended toward the  “glass half full” approach. Maybe he’s right. He does suggest potential improvement of the mess we’re in, but it’s going to take a long time. That long-term adaptation idea may have something to do with his afterword on evolution.
  • The afterword is titled “The Descent of Money.” The section is wonderfully illuminating, because he provides a bird’s eye perspective of the whole book, and heralds some prophetic notions about the world’s financial future. Then, he launches into a long explanation of how the history of finance is just like evolution. Except, as he’s forced to explain, it’s not just like evolution because there are so many differences. The concluding discussion, in my non-financial opinion, does very little to enhance the book as a whole. It was like he thought he had a good idea at the end, and awkwardly tried to slip it in.

What I Learned from Reading The Ascent of Money

  1. Macroeconomics is pretty complicated. I do my own taxes, which means nothing more than that I spend hours on TurboTax, scrounging for deductions and grieving the fact that I’m taxed to death for being self-employed. Reading The Ascent of Money opened my eyes to the panorama of economics as I’ve never seen it before. As Ferguson put it, this is “the financial equivalent of rocket science.
  2. Money, like everything, has a colorful and storied history. The Ascent of Money is a history book, and a pretty good one, too. The author sketches out a money map of the world, showing how this happened and where it came from. He gets to the personal level, too, and discusses personalities like the conniving Medicis and the risk-taking George Soros.
  3. Finance has changed, will change, and is changing. The sweep of history demonstrates that finance changes. It adapts to need, greed, and whatever cataclysm is at hand. The book of Revelation even contains information on the startling changes in apocalyptic finance. Today, most of us purchase things online or using cards, rather than cash. That wouldn’t have worked thirty years ago. Today, despite the hype about economic globalization, there are some who are pushing for localization, the near-opposite.

Other Stuff

  • Niall Ferguson is a Scottish (in case you couldn’t tell by the name) historian and writer. He’s pretty smart. As a result, he teaches at Harvard and written many books, some of which are controversial.
  • You can peruse the book on Google books without cost, the electronic version of browsing a Barnes & Noble bookstore.
  • The book was made into a documentary. If you have five hours to spare, you can watch it online. I haven’t seen it. If you watch it, let me know if it’s any good.
  • You can buy the book on Amazon as well.

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3 Comments

  1. February 2012 Reading | Daniel Threlfall

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