Book Review: Niall Ferguson's "The Ascent of Money"

I just finished reading this book during the New Year and Christmas holidays and i was very impressed by its depth, historical basis and contemporary relevance.

I was initially put off by the book's sub-title: "A financial history of the world", my initial thoughts were that writing a financial history of the world is such a major undertaking that whoever attempts to do so will fail and that the book will not live up to its promise. However, the book's author (Niall Ferguson, one of the most renowned economic historians in the world) has delivered on the promise of the book in a way that only an history professor who grew up in scotland, went to school in England and Germany and holds concurrent academic appointments in Oxford University, Stanford University, Harvard University and the Harvard Business School can.

Not only did he give an exacting historical background to the important role that money, financial instruments and financial markets have played and continue to play in modern societies, he delivered it in such an engaging way as to make the book simply "unputdownable"!.

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  The various sections of the book, include:
  
  Dreams of Avarice (basically an introduction to the rise of modern banking in medici-era Florence (in modern day Italy);
  Of Human Bondage (a chronicle of the rise and importance of Bond Markets and instruments);
  Blowing Bubbles (history of investment in stocks and behaviour of stock markets);
  The Return of Risk (history of the Insurance Industry and the concept of the "social safety net" (i.e. Social Security, National Pension Schemes etc))
  Safe as houses (description of mortgages and the housing finance industry)
  From empire to chimerica (overview of "emerging market" and cross border investments over the centuries and the unique role currently being played by America & China in the global economy); and
  The Descent of Money (sort of an epilogue to the whole book).

I really enjoyed reading the book as it reinforces my views (as an unashamedly ardent capitalist) that financial markets and innovation are the main contributors to the improvements witnessed in incomes, standards of living, longevity and even the rise of democratic systems in the modern world.

Above all, i recommend the book to the legion of "doomsdayists" currently predicting (or is it "prophesying"?) the ruin of financial markets. They will quickly learn from reading the book that crises are an integral part of Financial markets and that financial markets have (just in the space of the last 100 years) survived two world wars (one of which was tagged "the war to end all wars"), a great depression (during which unemployment rate crept to almost a third of the adult population), many recessions, earthquakes and other natural disasters, numerous sovereign bond defaults, widespread hyperinflation and even thieving dictators and strongmen.

There is no reason why international trade and finance should not recover, and even emerge stronger and better, from this current financial crisis. The world has witnessed and survived worse situations than this!!!!