Thursday, February 12, 2009

Review: Ascent of Money

Critique of Niall Fergusons' Ascent of Money with bullets below

1. Informative 2. Well Researched 3. Honest 4. No ideological strings attached.5. Stops it, when he should.

1. Too "technical" and rough around the edges at times (The author is essentially an economist and not a writer; so can't really blame)
2. Can be wayward with his stories; sometimes making it hard to keep a grip on the basic topic. Goes off the runway a few times.
3. Tries to build a structure around his premise of evolution but looses the building blocks somewhere in the middle.
4. The notion of "Chimerica" is a bit far fetched and won't fly with a lot of folks

Overall I would rate it 3.5/5 (which is High). If you can borrow and read, that'd be just cool. Read it without blinkers and any pre-conceived notions about money in general and you've got a good deal going for you. Else don't waste your time.

And now if you are really interested in what the book is about here are some plain jane bullets.
  • Tries to explain the concept of evolution of Money or Currency and it's trajectory through the centuries. It's origins, it's rise and fall.
  • Informative and anecdotal explanation of Bonds Market and Stock Market.
  • My favorite story is the origin of Insurance Industry and how they calculate premium against risk; how it has roots in Scotland's clergy men and their widows.
  • Amongst other explanation I liked the co-relation of anti-globalization to World War I and it's unintentional consequences to Great Depression of 1930s
  • I also liked the story of Argentina and how it is in a permanent state of high inflation and high debt. It's constantly changing economic philosophy is intriguing to say the least.
  • For the first time I understood what Pinochet (of Chile) was all about. I had only read his name in passing in some articles.
  • The author (himself from Harvard) also touches upon Chicago school of Economics which was often seen as being at logger heads with Harvard school. The "Chicago Bad Boys" (or something of that order. I forgot the exact term) as they were called in the 70s have interesting stories around them.
  • The various milestones of Financial evolution and it's relation to man's progress is well taken. The author touches upon the role of China and India in early period with Silk route and Spice route. Also touches upon the rise of Banking industry in early Europe specially in Italy,Sweden and Netherlands. The word Bank comes from the italian word benchia which means bench. How Banking industry started with some Jews sitting on chairs behind their wooden benches on streets of Florence is one of the cool anecdotes.
  • The fact of Jews rising in Bank Industry has roots in their religion. In earlier times Christians would consider charging interest on a loan as a religious Sin thus letting Jews out smart them in Banking world. Nice story there.
  • The basic premise of the book is, that like all systems we know, the system of Finance and Economy and it's sub branches - Bonds,Insurance,Stocks, Hedge funds - are evolutionary in nature. (This point really reinforces my own belief system about lot of things)

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