The Ascent of Money: A Financial History of the World (2008)

I'm not completely financially illiterate, but economic theory has the power to both mystify and bore me more than most other topics. This book helped to explain the ways in which financial markets developed in an interesting enough way to keep my attention. ( )

The book is titled The Ascent of Money, but it's not about the ascent of money. It's about the path of money, with the assumption that from the origin of the book's historical perspective, money has been the bedrock of civilization. There's no ascendancy, because there is nothing for it to compete with, in the author's telling. What the book really is is a straight history of the above-board financial markets, and to that extent it's a useful and largely enjoyable read, covering the move from barter to coin, and from coin to virtual funds, and from virtual funds to algorithmic trading. The author does a wonderful job of jumping across vast time periods to draw comparisons (showing how even if technology changes, human nature does not). He does a terrible job of telling jokes, which comes across as a sort of nervous habit (mostly alliteration, puns, and pop-culture references), one that someone close to him should point out to him.

The absence of under-the-counter financial markets and their influence on, their substantial part of, the global economy seems like a significant blind spot. There are occasional asides to the Mafia, narco states, and the like, and of course when Ponzi schemes come to light they are acknowledged. But that's it. As such, it's sort of like this: if The Ascent of Money were a study of a city, it would only take stock (so to speak) of the goings on within buildings and institutions, and not of street life. In other words, it's not a full picture. It's like a Chamber of Commerce picture. (One other seeming blind spot: if I'm not mistaken, the author seems to have a disinclination toward companies that are not publicly traded.)

Also: I cannot recall reading a non-fiction book recently with less of a thesis. There is no overarching theme, no consciously enacted perspective, just the steady march of economic history proceeding like a fleshed-out timeline. I'd say most fiction I read has more of a thesis, more of a sense of perspective on the world, than this book does.

To be clear, there is a concluding section in which the correlations between biological evolution and monetary-system change is compared. But in effect what has happened is that after dropping occasional references to such a metaphor throughout the book, he then tries to tie it all together. In other words, the equation to produce this book was: write a history of (largely western) economics at a (largely) macro level, and then add a final chapter proposing a model, supported only by parenthetical references in the majority of the book. A comparison is not a thesis, especially when the comparison feels added on. Furthermore, the evolution metaphor is seriously sloppy. For a widely traveled professor at Harvard, he has created a loose-at-best metaphor with a floating subject that changes according to the need of his rhetoric, on a moment by moment, sentence by sentence basis: Has money ascended, like man is said to have? Has the nature of business? Has the market? If, as the author states, complex technological innovations haven't actually supplanted earlier modes like barter and loan sharks, then how can the comparison to mankind be made? Are we humans surrounded by our own competing ancestors? And if in fact this is about an ecological comparison, and not a one-on-one to mankind, then why not just say so? Because comparisons to man allow for the idea of the free market having a rational hive-mind sentience? Because The Ascent of Man sounds like a better logline than The Ecology of Money? It's altogether unclear. If after this much effort a book's thesis cannot be plainly stated, then it does not have one. What it has is a paper wrapper.

And as a side note, I may be mistaken, but the book seems to clarify when an economist is left-leaning but not when right-leaning. And the fact that George Soros and several other figures in finance are Jewish is pointed out, but no other religion is listed with any particular frequency when other major figures are mentioned.

One final thing: There is an anecdote about the film Mary Poppins early in the book that I highly recommend reading. I can't do it justice, but in brief: the author was invited to speak at a business event, and since the tone of his talk was somewhat negative about the economic short term and midterm, several of the attendees (all successful business-people) complained afterword, essentially taking issue with the presence of a non-businessperson, especially one deemed not enough of an optimistic booster). One of these complaints stated that they should have ditched him and just shown the movie Mary Poppins. The author then takes the opportunity to point out the extent to which Mary Poppins' plot rests on the instability of British banks.

Interesting enough but as I read/listened through I felt the lack of a theoretical/interpretational framework. Narrative history fair enough but all too easily edges into "one damn thing after another". The framework all comes along in a lump at the end with numerous concepts pretty much in list form and rather indigestible. some of his "pop history" analogies and phrasing can be annoying or trivialisiing, eg "Chimerica". Choice of topics also sometimes favours the sensational: eg, John Law is a colourful enough rogue but surely only a symptom of the absolutist distortions of the bourbon monarchy. What comes across strongly is how finance has become eve more complex to the point of incomprehensibility at least to this reader. i can just about keep up as far as consols and the Rothschilds, but once we get to the late 19th C and beyond it becomes bewildering. I wonder how much this is a weakness in the writing and how much a matter of reality. LTCM for example, as a bunch of Nobel economists went spectacularly down the toilet; did they understand how it all worked? or was their mistake to think they understood it? Soros, by this account, seems to have some grasp, not only of how to beat the market, but how it actually works: the effects of expectation upon expectation. What is not really examined is how, despite fluctuations, crashes and con men, the real economy does overall move forward. In the long run, we're not all dead; most of us are at least slightly better off.
Ferguson does paint the dismal science in bright, if occasionally gaudy, colours, and tells good stories. He comes across as more intelligent and reasonable than one might expect from some of his political positions ( )

Fun and scary at the same time. There are short stories from the history of finance scattered throughout, like the Medici, John Law and the Mississippi Company, and the Rothschilds. But much of the book is about the twentieth century, and much is necessarily a lesson in how finance works. I'm a little ignorant of finance and found it hard to follow in places. The discussion of inflation, which forms a large part of the book, is good. But the discussion of risk, once it goes beyond straightforward insurance, soon gets difficult to follow, mainly because it doesn't try to explain or hold your hand. I would not have followed much of the discussion on the global financial crisis if I had not read John Lanchester's "Whoops" recently.

But it does shine in places, and he puts out some strong and controversial ideas towards the end - even if it is a popular book and he's being sensationalist, it's always good to see historians challenging themselves by trying to predict the future.

I think the main things I got out of the book were interesting stories from the more distant past, like John Law, the Mississippi Company, the invention of the joint-stock company, and the Rothschilds. I think I was lost in the second half partly because of the lack of a strong argument. ( )

I rather enjoyed this book although I am, like some other reviewers have admitted, financially challenged. Ferguson writes in a style aimed at the general reader who may not know his Fannie Maes from his Blue Chip preferred. I do think that the book tried to be too much of an overall survey, which left some subjects inadequately covered. This especially seemed true in the arena of more recent events. However, his sections on early financial history, including the origins of the several types of financial institutions, were excellent. ( )