Niall Ferguson’sÂ The Ascent of Money: A Financial History of the World, is one of the best economic histories I have read. Â It seeks to be a global history of money and does a good job of it. Â It is somewhat tilted towards Europe and Western countries but only because that is where the majority of financialÂ innovationÂ has come from, especially inÂ the last 300-400 years.last 400 years.
What I found especially interesting were his explanations of the way sophisticated financial instruments actuallyÂ work. Â It often seems as though investment and investing have a language specifically designed to confuse and confound the layman. Â Dr. Ferguson’s explanations of derivatives and other financial instruments were understandable and serve to somewhat demystify theÂ worldÂ of finance. Â Of note also is theÂ wayÂ in which he explains that these financial instruments are used to create wealth, with the emphasis on create. Â He perfectly explains how people like George Soros become billionaires without actually doing anything productive but rather by predicting which way the market will go and essentially betting they are right with other peoples money.
He also tackles entitlements in bothÂ Europe, Japan, and the US and providing an excellent anlaysis of the flaws in the current western model entitlement system. Â Perhaps the best line in the book is “Yet welfare reform is coming to North America, whether anyone wants it or not.” Â He then goes on to explain in detail why thisÂ isÂ so.
The Ascent of Money: A Financial History of the World, is not a work of political science though. Â Ferguson lets his own opinion shine through at times but by and large what he is presenting here is exactly as described: Â A history of the development and use of money and in the end an explanation of why we cannot get away from it even though there are manyÂ groupsÂ on the left and right that would love to see that. Â Ferguson is right when he claims that no one has yet come up with a more efficient way of moving capital to where it can be used than money. Â ThisÂ work explains all of that and also how unscrupulous people have learned toÂ manipulateÂ the system that makes the modern world move.
This is another outstanding book by Niall Ferguson and nothing less than what I expected from someone who I have come to believe is perhaps one of the most balanced and perceptive historians writing today. I have not yet read a book by Dr. Ferguson that was not a joy to read and even if I do not agree with everything he says, his works are always thought provoking, The Ascent of Money: A Financial History of the World is no exception. I highly recommend this book.