The Ascent of Money – Niall Ferguson

Money, we all can agree, is an important part of modern life. More than just a medium of trade, money has been used through time immemorial to gain and wield power and influence. Many people and societies, of the past and in the present, have been motivated by the quest of this elusive “resource”.
Strangely enough, our history books are filled with facts and figures but rarely find mention of the significant role that money and finance have played since the stone age. “The Ascent of Money” by Harvard historian Niall Ferguson is an attempt to present a financial history of the world. The author traces the origin of money and the impact of the increasingly complex and sophisticated financial structures on society and human progress, both positive and negative.

This book comes at a timely juncture as we witness, first-hand, the unraveling of the global financial system and its impact on society and politics in countries ranging from the United States, India to Eastern Europe. It offers a unique perspective on important periods in human history and the role played by money, be it wars in medieval Europe, the World Wars, the Great Depression, or even the increasingly complex relationship between
China and the United States.

One of the very interesting things to take away from this book is an exploration of the much reviled “moneylender” community throughout history. The book makes a convincing assertion that much of the anti-Semitism in the world is tightly linked to the role played by Jews as moneylenders in large swathes of Europe for centuries, as a result of the fact that other religions such as Christianity frowned upon the practice of charging interest, leaving the world of banking to the tiny Jewish populations. These communities, which first became targets of scorn and disapproval for engaging in this ‘unholy’ practice, later, when the inevitable bad debts rolled in, found themselves targets of resentment and hate, further ghettoising the community and exacerbating the situation. In fact, the author asserts that the true reason behind the Crusades may have been the quest for gaining control over crucial channels of trade and commerce, while religion was a convenient excuse and perhaps a secondary reason.

Another interesting relationship explored in the book is that between influential bankers, financiers and the political leadership of the day. The book explores the rise of icons such as the Rothschild family in Europe and, more recently, JP Morgan in the US. The Rothschild family, which got its first opportunities when financing war expenditure, soon found itself to have a stronghold on the monarchies of the time, often being perceived as more important and influential than the actual political leadership itself. In fact, the Rothschilds, the Medici family of Italy and JP Morgan in the US played crucial roles in providing large scale monetary relief to the flailing nation-states of their times. This is a very interesting backdrop to the current financial crisis when major financial corporations are being bailed out by national governments.

In sum, this book explores how access to money and resources, and the quest for financial resources has spurred the rise of many a society and nations. However, the author does acknowledge that the trajectory of human progress has been irregular and jagged at times, which perhaps indicates periods characterized by the loss of fiscal sobriety and balance in society. Whether or not one agrees with the author’s hypothesis, this book is an essential read for us all as we make our way through a time of economic upheaval and try to make sense of it all. This book provides much food for thought and can provide important scenarios from history which should be understood properly in order to understand how we got here and how we may proceed onwards.