The Ascent of Money 2008 by Niall Ferguson is a well timed history of finance in the West. There is also a documentary series of the book that has screened in the US and UK. The book is a good read and is informative about finance and history. Ferguson was a financial journalist before becoming an academic so he is in a good position to write about the subject.
The book is divided into 6 chapters with an introduction and an afterword. The Chapters are Dreams of Avarice; where the rise of lending and banking is looked at, of human bondage where the bond market is described, blowing bubbles that looks at the rise of the stock market, the return of risk where insurance is examined, safe as houses where the rise of home ownership is described and from empire to Chimerica that describes China’s rapid economic rise. The Afterword talks about the current problems in the world economy.
The book goes rapidly over the history of each concept that a chapter deals with. The book has been criticised by some for this method rather than going over the gradual rise of all aspects of the economy historically. But the books way of looking at the concepts provides a clean overview of each them. Ferguson is also a good writer, he mixes interesting facts with the conceptually driven overview that he is providing. The rise of insurance was particularly fascinating for someone, like myself, who knew very little about the history of insurance.
The book is a little opportunistic. It is clearly written with some mind to drawing interest because of the current financial crisis. But the book makes the point very well that a good knowledge of financial history may have lessened the impact of the current downturn. Ferguson looks at the failure of models that don’t include the fact that serious financial downturns of 10% do occur far more often than the models assume.
The book disappointed me in that more wasn’t covered. But any book that sought to cover the whole of financial history in real depth would be a multi-volume book of thousands of pages. The book could have been improved by providing more graphs of financial growth. There are many illustrations of various scenes throughout the book, it would have been to also see the growth and change of more of the figures.
The Chapter selection is also somewhat odd. Safe as Houses and From Empire to Chinamerica depart from the history of particular concepts to the history and future projection of things that are important right now but that are not as fundamental as the subjects of the other chapter. The rise of home ownership is interesting and is ascribed to the rise of the federal housing agencies in the US and Thatcher’s policies in the UK. He does note that in the Anglosphere housing ownership is high but doesn’t really look into that. Ferguson appears to think that this favouring of housing was unwise but this view, while popular now, may be a product of the times. The chapter also covers property in the third world and talks about Hernando De Soto and it looks at micro-finance.
But overall the book is a welcome addition to books accessible to the general public on the important subject of the history of economics. It may even be the best book overall. It’s a better written and more interesting book than either A Splendid Exchange or The Birth of Plenty. But hopefully encouraged by the sales of these books there are academic economic historians out there who believe they can do better and are out there writing even better histories of economics for general consumption.