The Ascent of Money: A Financial History of the World

Before Read More Big money is intoxicating. During the great bubble of the late 1990s, I escorted one of the newly really rich to be interviewed at CNN, where I headed the financial network. "I just made $400 million today," he boomed, taking the stairs two at a time. The air around him seemed charged with electric good fortune.

Several years later, I saw him again. He was several billion dollars less wealthy. He seemed kind, more thoughtful, a touch fragile. (There are none of us so weak we cannot bear our friends' misfortunes, as the acerbic French epigrammist has it.) The Really Rich man had become merely rich, and his pain seemed palpable. What would it be like, I wondered, to wake up thinking: I just lost $400 million yesterday?

The curses and the blessings, the seductions and the traps of money give Niall Ferguson the most redolent of subjects for The Ascent of Money, his excellent, just-in-time guide to the history of finance and financial crisis. A lively writer (author of Empire and The War of the World), a professor of history at Harvard and a master of anecdote and aphorism, Ferguson says he took Jacob Bronowski's hymn to human invention, "The Ascent of Man," as a model. Just as Bronowski's 1973 BBC documentaries traced the beneficial impact of science and art, Ferguson shows how promises and paper have lifted humans from subsistence farmers in Babylon to Masters of the Universe on Wall Street.
Among his core arguments is that "poverty is not the result of rapacious financiers exploiting the poor. It has much more to do with the lack of financial institutions, with the absence of banks, not their presence." Money, he contends, is essential to human progress; it is "trust inscribed" on paper or metal, and without that trust we would all be poorer.

But now, right now in the dark autumn of 2008, comes the shadow of mistrust. It may fall over us at different times and places . . . somewhere between the relentlessly down-pointing red arrows on CNBC and the increasingly bitter 401(k) jokes of late-night comedians . . . between the latest Congressional testimony from used-to-be financial wizards and the lineup of bailout candidates winging to Washington, hands out. But who among us has not felt the chill?

The financial system, Ferguson writes, "magnifies what we human beings are like . . . our tendency to overreact" to booms and busts, enriching the "lucky and the smart, impoverishing the unlucky and not-so-smart." In this way, money is a mirror, and "it is not the fault of the mirror," he notes, "if it reflects our blemishes as clearly as our beauty."