Book Review – ‘The Ascent of Money’ by Niall Ferguson

Niall Ferguson is at his best, writing about Financial History an area of his expertise and the subject that he teaches at Harvard. In ‘The Ascent of Money’, Niall traces the thousands of years of history of the development of Money as a basic unit of transaction. The heart of the story is about how money moves the world around, how money is responsible for the prosperity and growth of the nations and now that of the – highly interlinked – world, but above all it is the story of human triumph in making the world a better and prosperous place. Of course, as you would expect from any human story, this one too has unfounded euphoria and equally hopeless levels of pessimism, it has enterprise but also sheer greed. From all this there are lessons to be learnt and the most important is the fact that like the world history the Financial history too repeats itself, and not surprisingly therefore some of the biggest financial disasters could have easily been averted, if only we had looked back.

The story takes us back to ancient times when all transactions were recorded on clay tablets, to the middle ages when barter was the only means of paying for transactions, to the times when Gold and Silver coins began to lead as the means of transaction, to later on when coins began to be replaced by Paper Money, and finally to the modern times of invisible online money that moves around the world in milliseconds. The author takes us around the globe from early Mesopotamia, to the Incas in Latin America, to the Imperial Empires of Europe, to the world’s Capitalist symbol – America, and finally to the coming of age in China. The fascinating history of how Venice established as the controlling trading gateway into Europe following the Spice and Silks route through the Ottoman Turkey, to how Florence shot to prominence through International Currency Exchange fuelled by the Church in Rome, to how Amsterdam become the world’s Financial capital following the growing commerce of the Dutch East India Company and how that place was taken over by London following the growth of British East India Company. Of course the story won’t be complete without talking about the main actors and so the book introduces us to some of the key people who have been responsible in large measures in shaping up the financial world that we see today. From the infamous 18th Century Scottish murderer and convict, John Law, who went on to become the French Finance Minister and ruined the French economy, to the banking dynasties of the Medici in Italy or the Rothschild in the UK or the current day finance wiz George Soros, the book covers them all. The author also shares insights on the reasons for the overwhelming Jewish dominance in the area of finance compared to other communities, which comes from the fact that the Jewish religion permits interest collection on loans made and Christianity doesn’t. That just puts the Jewish lender Shakespeare’s Shylock from ‘The Merchant of Venice’ into context.

The books traces the origins of some of the biggest financial innovations that we know of, right from how the simple transactions like credit and debit got established, to how banks came into being, to how bonds and stocks were born, to how the insurance industry came about, to how hedging and futures markets were first built. As is generally the case in finance boom is followed by bust, and so we learn about the biggest financial scandals of history. Right from the Stock Market Bubble that not only collapsed the French empire financially but also crippled it so much that its aftermath effectively led to the French revolution, to the sub-prime mortgages to the predominantly Black community in the sleepy city of Detroit in the US, whose ability to take such loans in the absence of schemes such as NINJA (No Income No Job No Asset) would have been virtually impossible, and how a small shake-up of this mortgage scandal shook not just the US but the entire world bringing us into what we know today as the Great Recession of 2008 whose after effects are still visible in many parts of the world.

While the author does a great job in covering a large breadth of history in creating this book, what often seems lacking is the underlying connection with his wider story. As is generally true of most Niall’s books, this book too has lots of information which is otherwise interesting but doesn’t always seem to link with his main story and rather gives a feel of a collection of short stories instead. Furthermore, given the complex subject – Financial History of the World – the book neither manages to explore Finance or Economic History in depth. One is left with the feeling of having got some information but not enough to understand the topic in any detail, the financial concepts are introduced but generally not explained and that would leave the reader wanting for more.

In a nutshell the book is very lively and fast faced and attempts to accomplish a very ambitious goal of introducing us to the history of finance in a very easy way and in that attempt this is a fine book. The strongest point of the book comes at the end when the author summarizes all his research work crisply and then analyzing it makes some very pertinent and interesting comments about the future of finance. The reader leaves the book imagining these possibilities and deliberating about the most likely scenario playing out in future finance. And, it is here that the book triumphs.


Niall Campbell Douglas Ferguson is a British historian from Scotland. He is the Laurence A. Tisch Professor of History at Harvard University.

This book is available in many convenient formats. So go ahead and read it!

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