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Review of The Ascent of Money by Niall Ferguson


Niall Ferguson is one of my favorite modern conservative authors. His books on the American Colossus, the British Empire, the great degeneration, and why Western Civilization triumphed are all fantastic and strike at the core of the issue they are about without being overly complex or academic.

They are all about complex political, social, and historical topics, yet Ferguson is able to write in a way that appeals to the average reader and is interesting and decipherable to even the layman. The Ascent of Money, Ferguson’s book about the history of the modern monetary and financial system, shows that quality of his quite well. It’s about an indubitably complex topic, one that few, even in the field, truly understand, yet even I was able to read and comprehend it.

In fact, The Ascent of Money is written for the layman rather than the expert, as Ferguson makes clear in the introduction to the book. After noting how little the average person knows about the Great Recession and the complex financial instruments that led to it, Ferguson describes why the book is important: understand the ascent of money is more necessary than ever today, yet few people know anything of note about the system, even if they are otherwise well-informed. The book, therefore, is meant to bridge that chasm between financial knowledge and other knowledge.

That mission is what made The Ascent of Money exception to me, as I will show in this review. Ferguson traces how money and the financial system developed, using history and fun to read about examples, rather than complex financial terminology, to prove his point (which is that money is the foundation of human progress) in a way that any literate person can understand. The topic is of near-indescribable import: money is the backbone of our system and we have to know how the financial system works, especially given the financialization of the US economy and the nature of our political economy. Reading The Ascent of Money is one of the best ways to learn about it.

Summary of The Ascent of Money by Niall Ferguson

After the introduction, Ferguson starts The Ascent of Money by describing a world without money. Commies and anarchists dream of it, even if they can never find a way to actually implement it, so what would it look like? The answer is hunter-gatherer tribes. Hunting, fighting, and scavenging in the jungle, they live lives without money. And are their lives any better than ours? No. In fact, as Ferguson notes, their lives are what Hobbes described in Leviathan as “nasty, brutish, and short.” Violence is their currency, as Francisco D’Anconia noted in his money speech in Atlas Shrugged, and life is, as a result, predictably brutal and violent.

From there, Ferguson moves to the point in history where the West’s monetary revolution began: the Spanish conquest of South America and the mass influx of gold and silver that resulted. That event flooded Europe with previously scarce hard currency, teaching both that the value of precious metal (and indeed currency) is not absolute and the importance of liquidity, a topic to which Ferguson returns numerous times throughout The Ascent of Money.

Next, Ferguson charts the history of currency, showing how it developed from clay tablets into the metal-based coins we are familiar with. But that is not the most important part of the first chapter. Rather, the section on the birth of banking and the revolution the Italian city-states started by turning banking into a legal, if still not particularly praised, occupation. Ferguson ends this chapter by returning to his point from the beginning: despite the flaws of our system, the world would be a far worse place without money and banking. Credit and debt, in his worsts, are the “essential building blocks of economic development.”

After beginning his discussion of debt in Chapter 1, Ferguson more fully develops that subject in the next chapter, which is on the bond market. That market arose out of necessity and has been a prime driver of world development ever since. It allows businesses to grow, savers to productively and safely invest their money, and governments to fund wars and programs without increasing taxation. There are drawbacks, such as inflation and the danger of default, but bonds rose to prominence and, for good reason, have not retreated from that position. Furthermore, in this chapter, Ferguson discusses inflation and how it is largely a political phenomenon.

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But debt and bond markets aren’t what allowed capitalist economies to achieve truly startling growth. Stock markets, created when the Dutch formed the Dutch East India Company and sold shares in it to the public, unleash the wealth of society and have allowed companies to turn into empires. They are unpredictable and have a life of their own, yet they are also the primary means by which investors can exert influence on company management and push for better policies, thus leading to even more prosperity.

Since those markets were created, bulls and bears have done battle, speculating on whether stocks will go up or down. Bubbles, whether the famous South Sea Bubble or more recent Tech Bubble, have formed and depressions/recessions have resulted when they pop. But stocks and stock markets aren’t important because of bubbles and speculation. They’re important because they were what powered the West’s growth.

After the section of stocks, Ferguson uses The Ascent of Money to describe what he calls “the return of risk.” That risk is represented by insurance- people fear bad things might happen, “know” might be a more apt word, so they try to hedge against that risk by investing in insurance policies. Along those same lines, governments have attempted to better the state of affairs for life’s losers by developing massive welfare programs.

But all is not well in the world of risk. As shown by the Katrina disaster, even when insurance exits, thanks to regulation and heartless corporations, government (or really taxpayers) tend to bear the costs of disaster, not the insurance companies that ostensibly should.

Additionally, in the 70s, Milton Friedman (author of Capitalism and Freedom) and his so-called “Chicago Boys” worked with General Pinochet in Chile to cut down the welfare state by developing free-market alternatives to government-sponsored pensions like Social Security. Those alternatives were incredibly successful and popular. Ferguson uses that story in The Ascent of Money to show the need for welfare reform and the risks of sticking with the current system, which can’t handle a rapid increase in the number of claimants.

After showing the need to dismantle the welfare state and reform the insurance market, Ferguson turns his sights to the housing market. Since the New Deal, Americans, and citizens of the West in general, have dedicated vast resources to buying houses, thinking them good investments. Ferguson has a different view. His point in The Ascent of Money is that houses are only safe investments for lenders- who can claim the house if you fall behind on payments, not the investors who should be looking for the best opportunities to build wealth. As he shows, the stock market, not housing, has been the best investment. The implication, therefore, is that we should rethink how we treat housing.

Finally, Ferguson addresses globalization. Despite our view of it as a recent phenomenon, he claims it really began in Victorian England. During that time period, British investors bought stocks and bonds from around the world and the London financial markets led to a vast globalization of finance. Thanks to the gold standard and rising prosperity, both critical to the ascent of money, the bonds and stocks of companies and government from around the world were all traded and free trade boomed, tying the world ever closer together. Until 1914 and the Great War, that is.

The system began anew toward the end of the 20th Century. The IMF and World Bank liberalized world finance, companies wend abroad, hedge funds became massively powerful, China lent vast sums to the US, which promptly spent everything on wasteful wars and programs, and the world financial system grew more and more intertwined.

Overall, The Ascent of Money is a tale of how finance and money built the world as we know it. Financial history powered world history by funding most events of note and sparking events as important and world-shaking as the French Revolution, industrial revolution, and rise of China. Knowing the history of money is important because the system created by the rise of money is so important.

My Take on The Ascent of Money by Niall Ferguson

Ferguson does an excellent job of crafting a powerful narrative and supporting it with all the evidence at his disposal. His writing is truly compelling. Plus, thanks to the exciting, funny, or otherwise interesting stories he uses to prove his point, it’s fun to read. A book about money might sound either a) dense and uncompelling, if important (such as Fooled by Randomness) or b) somewhat huckstery, like self-help books on investing.

Thankfully, The Ascent of Money is neither of those things. While Ferguson does note the importance of investing wisely, he isn’t trying to sell an investment plan nor does he launch into long discussions of the finer point of arcane financial instruments. He keeps it interesting and focused on what is important.

Finally, The Ascent of Money is superb because Ferguson addresses real problems in it. The welfare state, problems with insurance, the bankruptcy situation, low savings rates in the western world, inflation, and stock bubbles are all subjects that we need to understand.

We don’t because those problems are often only discussed by dolts with no real knowledge of the subject or, on the other side of the coin, knowledgable academics that can’t address them in a way that us non-experts can understand. Ferguson walks the fine line between those two camps and, in doing so, addresses the issues that need to be discussed.


You need to read The Ascent of Money. Thanks to Covid, we’re in uncharted waters in regard to our monetary system. Stocks are probably too high, businesses are failing, the government is spending ever more money, inflation expectations are on the rise, and the populist revolt against the current monetary order is doing real damage, as is the rise of socialism.

But none of those problems are new. We’ve dealt with all of them before, even if never quite in the same way. Only by learning our history can we potentially avoiding repeating the mistakes of days past. To stay ahead of current events, you need to read The Ascent of Money by Niall Ferguson.

By: Gen Z Conservative