Building a business
Learn more about money—an easy way

Unless you studied finance and economics in college, you may feel inadequate in discussions about money. What’s the difference between a bank and a credit union? Why buy insurance? Why did subprime mortgages make the economy crater? How do economic conditions in Greece and China affect your business?

You can get answers to questions like these and acquire a basic understanding of finance without going back to college or spending a ton of money in the process. How? The Ascent of Money, an engaging and comprehensive financial history by Niall Ferguson.

The easy part is that you can check out the audiobook version of the book from your local library and listen to the nine CDs (about 12 hours) while driving to and from work. Or you can check out the DVD (four hours) and watch it at home. Or go online and watch the four-part Emmy-award-winning documentary or a two-hour film at www.pbs.org/wnet/ascentofmoney/.

An engaging history
Regardless of the format, The Ascent of Money explains how money, banking, and finance evolved, from merchants in ancient Mesopotamia to hedge fund operators today.

Instead of a dry recitation of developments, Ferguson tells the human stories behind historical events. He tells, for example, how gambler John Law persuaded the French to use paper money instead of coins in the early 1700s, why the Rothschild banking family declined to back Southern currency in the American Civil War, and how Mississippi lawyer Dickie Scruggs sued insurance companies to compensate for damages incurred in Hurricane Katrina in 2005.

The stories illuminate the reasons for the creation of banks, stock markets, bond markets, insurance companies, real estate, investment firms, and other financial institutions. In so doing, the stories weave financial history into social and political history. From this perspective, Ferguson claims that monetary innovations pushed forward the progress of human civilization.

Instead of ending the narrative at some distant point in the past, Ferguson brings us right up to developments in 2008, when the book was published. He describes how banking deregulation and other trends led to the subprime mortgage crisis and explains how global financial innovations have built China and India into economic powerhouses, to the detriment of America’s public and private sectors.

The enduring principle to be gleaned from this history is the recurrent cycle of boom and bust: Every boom will go bust, and every bust will eventually give way to another boom. We are left with a question: Are there ways to even out this cycle to avoid the pain of bust without dampening the energy of boom?

The Ascent of Money won’t qualify you for a new career or even help you balance your bank account. But it will introduce you to important financial concepts, expand your vocabulary, and give you a broader understanding of how our economic system works. It may also lead you to explore other resources that can enhance your personal and business finances. The book’s PBS website, for example, offers four lessons on banking, insurance, stocks, and entrepreneurship.

About Niall Ferguson
Compiling a financial history that spans centuries would be a challenging task in itself for any historian. But add to that, the telling of the history in a fascinating way, and you have an extraordinary work by an extraordinary author.

Ferguson, in addition to being a distinguished history professor at Harvard, holds academic posts at Stanford and Jesus College, Oxford University in Britain. Born in Scotland in 1964, he has written a number of books and several major television series about business, banking, and political power.

One of his most recent works, Civilization: The West and the Rest, aired on PBS in May. See http://video.pbs.org/program/civilization-west-and-rest-niall-ferguson/.
His teaching and writing led Time Magazine to name him one of the 100 most influential people in the world, and that was back in 2004 when he was only 40 years old.