NIALL Ferguson had the guts to hammer out at Nobel laureate Paul Krugman in a public debate last year on macro-economics. Whether the rising bond yields were good for the US economy or not, that was the question. Krugman said yes and Ferguson no. And like in most arguments, there was no clear winner. Not losing was victory, said Ferguson's supporters. Ferguson shouldn’t have got into a technical argument with a person of Krugman’s repute, some others said.

Well, that argument may go on, but nobody ever disputes that Ferguson is one of the fnest living financial historians in the world. The Ascent of Money: A Financial History of the World proves just that, yet again.

His stellar work traces the rise of money and credit from ancient Mesopotamia to modern times. He writes about the Spanish conquest of the Inca Empire, which was moneyless, the emergence of metal as money, Italy’s loan sharks, evolution of banking and so on. The book, which has been adapted into a TV documentary, also delves into the growth of bond markets from the 13th century and describes the role of some of the biggest market manipulators such as Nathan Rothschild who used wars to make unbounded wealth. The rest of the book focuses on the emergence of stock markets during the 17th century, the rise of sectors such as insurance and real estate and development of international fnance over the next couple of centuries.

He draws extensively from newspapers, centuries-old documents and his own previous works such as The House of Rothschild and Empire to offer a comprehensive read of the evolution of money, which, he says “has been one of the driving forces behind human progress”.

As money keeps reinventing itself over time, he argues, old empires topple and give way to new centres of power. He traces this power struggle from the rise and fall of the Spaniards in Latin America to the latest power centre – what he calls the “dual country of Chimerica - China plus America”.

He writes that today’s financial world is the result of four millennia of economic evolution, and economies that have combined institutional innovations — banks, bond markets, stocks markets, insurance and property-owning democracy — have performed better than those that did not. “Yet the ascent of money has not been, and can never be, a smooth one … it is a roller-coaster ride of ups and down, bubbles and busts, manias and panics, shocks and crashes,” he says.

The book, which starts off by taking a dig at the Marxian forecast that “money will disappear”, concludes by saying that if fnancial markets are the mirror of mankind, “it is not the fault of the mirror if it refects our blemishes as clearly as our beauty”.

It is timely, and as readable as it is informative, because in writing history as entertainment, Ferguson is a master.

ABOUT THE REVIEWER

ULLEKH NP is consulting editor, CFO India. He has earlier worked with news organisations such as Mint, DNA, The Hindustan Times and India Today. Over the years, Ullekh has written on a wide range of subjects including politics, business, advertising, art, travel, culture and people.