The study of power is not only diverting (which Homer and Shakespeare knew), but illuminating. A biography of an ancient human impulse.
Jon Meacham
NEWSWEEK
From the magazine issue dated Jan 5, 2009
Barack Obama has a good Al Gore story. Sometime after the 2000 election, Obama called on a corporate executive in a big office with a terrific view of midtown Manhattan. The businessman had been an ardent Gore supporter, and the former vice president had recently asked him to consider investing in a startup television venture. "It was strange," the executive told Obama. "Here he was, a former vice president, a man who had just a few months earlier been on the verge of being the most powerful man on the planet. During the campaign, I would take his calls any time of day, would rearrange my schedule whenever he wanted to meet. But suddenly, after the election, when he walked in, I couldn't help feeling that the meeting was a chore. I hate to admit it, because I really like the guy. But at some level he wasn't Al Gore, former vice president. He was just one of the hundred guys a day who are coming to me looking for money. It made me realize what a big steep cliff you guys are on." Obama, recounting the anecdote in "The Audacity of Hope," notes: "A big steep cliff, the precipitous fall." And, in Gore's case, the climb back up the cliff, to a Nobel Peace Prize and global eminence. Obama, who is now arguably the most powerful man in the world, understands that power is a fluid thing, and has been since the first caveman threw a rock at another caveman.
In the popular imagination, power tends to be viewed in one of two ways, both extreme. The first is totemic and tactical (how to get ahead at the office, to win friends and influence people). The other is epic and amorphous (the fate of markets, of vast global events and forces that seem beyond anyone's control, but especially yours).
Power is both these things, and more. At heart, it is best understood in terms of command and control. It is either the capacity to make others do as you wish (the command function) or to reorder the environment around you (the control function).
To study it intimately and specifically—how people get power, and how they wield it—is not only diverting (though, as Homer and Shakespeare knew, it is surely that). It is also illuminating, for understanding its accumulation and deployment enables us to learn, possibly, how to change the world around us, and the world at large.
Forgive that last bit of Dawn-of-the-Age-of-Obama hyperbole, but there is real hope behind the hype of the season. The discussion of power makes many left-of-center Americans somewhat uncomfortable, for it can be offensive to democratic sensibilities. Many right-of-center Americans, too, find the conversation unsettling, for it inevitably leads to thoughts of a governing elite, which conservatives in recent decades have chosen to vilify for rhetorical purposes. From Plato forward, philosophers have struggled to define power and, in the act of definition, to delineate it from the other impulses that shape what we do.
The beginning of 2009, the last year of the first decade of the 21st century, is a good time to consider the nature of power, and of the powerful, because the world is being reordered in so many ways—broadly by what my colleague Fareed Zakaria calls "the rise of the rest," the emergence of powers such as India, China and Brazil, and specifically by the global recession. The cultural, political and economic consequences of the financial meltdown cannot be overestimated. Unthinking trust in unfettered markets has evaporated, and the concern appears to be more than a temporary fit of worry that will pass when things start to get better. The demise of titans on Wall Street has elevated bureaucrats and politicians in Washington and Beijing and Brussels. And there is one politician in particular whose exercise of power will affect all of us for years to come: the president-elect, whose victory in November and transition—accompanied by the virtual disappearance of President Bush—have marked a resurgence of confidence in America. A senior European diplomat recently marveled to me about the American capacity to change course with rapidity and apparent ease: the shift from Bush to Obama —from the scion of one of America's noblest families to the child of a brief marriage between a young Kansan and a Kenyan academic, who proceeded to see his son exactly once—was simply astonishing.
In the following pages, you will find NEWSWEEK's highly subjective list of the most powerful people who will figure in the era over which Obama will preside. It is arbitrary, but the choices are well considered, and each, we believe, represents a thread in the new global tapestry. Some are utterly surprising; others are not. Perhaps most important, each meets the test of power as we have just defined it: they are men and women who are either in the business of bending others to their will or seeking to rearrange reality in ways they find more congenial. They are in command, or they seek control. There is, naturally, more than a little overlap; the features are not mutually exclusive. (The reprehensible are also here—Osama bin Laden is one example—as an acknowledgment that evil can affect us, too.)
We are not undertaking this to create simply an American list, or to delineate an elite based on wealth, social class or educational credentials. The figures in this issue are global, and they are chosen on merit. Many of the names here, it is true, are well-off, move in what might be considered high circles and went to celebrated schools. But many began life in obscurity (see, for instance, the 44th president of the United States) and have risen to prominence through a combination of determination and good fortune. Part of the promise of this country in particular is that those who work hard will have the opportunity to thrive; it is, along with the proposition that all men are created equal, the promise at the heart of the national enterprise.
In Latin the word for power is imperium, which is largely evocative of the state, and we tend to think of power in political terms—that is, in terms of our relation to one another in the public sphere (power dynamics within families are usually confined to the private sphere, except when those families play political roles—see the Kennedys, the Bushes and the Clintons). Very roughly, political power in America has moved from being the monopoly of the landed elite from the 18th-century Revolutionary era through the 19th-century Age of Jackson, when the suffrage was broadened to white men beyond the traditional gentry. In the 20th century, women and, at long last, African-Americans were included in the mainstream. Now, in the 21st century, the world is turning over yet again. The political energy in the country is being harnessed by a younger and more diverse group than it has been in ages past. This does not mean the millennium is at hand, but it does mean that the face of power is changing.
The worship of power for power's sake is debilitating and disorienting. The central creation myth of the West turns on just that insight. In the Book of Genesis, the serpent is able to seduce Eve and Adam into disobeying the Lord by promising that the fruit of the forbidden tree would turn them into gods—would, in other words, make them more powerful than they were in their innocence.
It is more fashionable to speak of such grasping not as sin but as the will to power, Friedrich Nietzsche's 19th-century formulation. "My idea is that every specific body strives to become master over all space and to extend its force (its will to power) and to thrust back all that resists its extension," wrote Nietzsche, who elevated power, rather than good, to ultimate concern. "But it continually encounters similar efforts on the part of other bodies and ends by coming to an arrangement ('union') with those of them that are sufficiently related to it: thus they then conspire together for power. And the process goes on." The moral reply is that some things are more important than power—love and freedom among them. That the security of such virtues often requires the use of force is an inescapable element of reality, but there is a distinction between the pursuit of power for domination and subjugation and the use of power to make possible the journey toward what Winston Churchill called the "broad, sunlit uplands."
Still, the bleak Germanic view has suffused elements of modern life. Resentment of those in charge of the industrialized state in an age of mass media is on vivid display in the work of C. Wright Mills, who published "The Power Elite" in 1956. Mills's vision was one of not-so-quiet desperation: "The powers of ordinary men are circumscribed by the everyday worlds in which they live, yet even in these rounds of job, family, and neighborhood they often seem driven by forces they can neither understand nor govern … But not all men are in this sense ordinary. As the means of information and power are centralized, some men come to occupy positions in American society from which they can look down upon, so to speak, and by their decisions mightily affect, the everyday worlds of ordinary men and women." Sarah Palin would probably agree with Mills, at least on the looking-down part.
But power in America and elsewhere is undergoing directional changes that complicate Mills's argument. Yes, there are still cultural arbiters, and yes, presidents and lawmakers and executives obviously exert enormous influence. It is arguable, though, that technology has given us a more democratic culture (if not politics) than the world has seen since perhaps the founding of Athenian democracy. In ways that we are still only beginning to understand, the Internet is changing how power is accumulated and exercised.
This is a subject that Al Gore—who knows a lot about the vicissitudes of fortune—understands well. In Gore's thinking, we are now in the midst of a great turning point in the history of power, a moment akin to the introduction of the printing press in Europe in the mid-15th century. The proliferation of printed information helped fuel the rise of democracy until, in Gore's view, television replaced print as the central political medium. Now the Internet has, like Gutenberg, lowered barriers to information and has given virtually anyone with something to say the means to say it. The Web is not only a source but a stage on which we can engage in the life of the nation and of the world armed with facts we have weighed in the light of reason. "Knowledge is now once again connected to power," says Gore—and that is a kind of power which means all of us belong on a list like this.
The other new factor in the global power game of 2009 is Obama himself. Well read, technologically savvy, politically astute, he comes to the White House in grim times but with high expectations. Whether he succeeds or fails, it will be a close-run thing. "It must be considered that there is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things," said Machiavelli. If Immanuel Kant is to be believed, even Obama's cool intellectualism is risky: "It is not to be expected that kings philosophize or that philosophers become kings, nor is it to be desired, because possession of power corrupts the free judgment of reason inevitably." So much for Plato.
Characteristically, Obama would reject the Kantian formulation as a false choice—one can be a king who rules with the benefit of philosophy. And what, exactly, is Obama's philosophy of power? He is a man with a tragic vision of the world: he knows that while progress is possible, perfection is not, and he comes to the office, it seems, with an appreciation of the limits of politics and the fleeting nature of power. As his story about Gore's old supporter suggests, Obama is a student of such things.
The account of the conversation about Gore's fall from power included Obama's own musings about how Gore may have felt now that his coming by, once an honor, seemed a "chore." "Sitting there … trying to make the best of a bad situation, he might have thought how ridiculous were the circumstances in which he found himself; how after a lifetime of work he could have lost it all because of a butterfly ballot that didn't align, while his friend the executive, sitting across from him with a condescending smile, could afford to come in second in his business year after year and yet still be considered successful, still enjoy the exercise of power," Obama wrote. "It wasn't fair, but that wouldn't change the facts for the former vice president." It is a fact, too, that one day Obama's power will fade, as will that wielded by the others on our list. What they do with it in the meantime will determine how their own story is told.
Friday 2 January 2009
NYT Review of Nial Ferguson's Ascent of Money
December 28, 2008
Follow the Money
By MICHAEL HIRSH
Skip to next paragraph
THE ASCENT OF MONEY
A Financial History of the World
By Niall Ferguson
Illustrated. 442 pp. The Penguin Press. $29.95
Niall Ferguson, it is fair to say, is a one-man book factory. In fact, if the American economy cranked out goods as prolifically as Ferguson does histories, we might not be in half the fix we are in right now. But then Ferguson wouldn’t have nearly as much to write about. The onetime enfant terrible of the Oxbridge historical establishment, Ferguson specializes in finding fault with great powers, especially the way they mismanage their empires. Ferguson first came to notice a decade ago with “The Pity of War,” a revisionist tour de force arguing that Britain made a world-historical error by entering World War I (and thereby destroying its empire) when it should have simply waited out the swift German conquest of Europe and remained a superpower, with Europe the better for it. More recently the Scottish-born Ferguson, who now spends half the year teaching at Harvard and the other half at Oxford, has turned his attention to the prodigal young heir to the British imperial crown, the United States. In “The Cash Nexus” (2001) and “Colossus” (2004), he urged Americans to emerge from their self-denial and fulfill their obvious destiny as the next “liberal” empire spreading the light of democracy and Anglo-Saxon legalism across the globe. “The greatest disappointment facing the world in the 21st century,” Ferguson concluded in “The Cash Nexus” (published in the opening months of the Bush presidency), is that “the leaders of the one state with the economic resources to make the world a better place lack the guts to do it.” Ferguson later supported the Iraq war as evidence that Washington had finally gotten up its courage, imperially speaking.
Whatever one thinks of his arguments, it’s impossible to ignore Niall Ferguson. He’s like the brightest kid in the debating club, the one who pulls all-nighters in the library and ferrets out facts no one thought to uncover. And in his latest book, “The Ascent of Money” — humbly subtitled “A Financial History of the World” — Ferguson takes us on an often enlightening and enjoyable spelunking tour through the underside of great events, a lesson in how the most successful great powers have always been underpinned by smart money. “The ascent of money has been essential to the ascent of man,” he writes, making a conscious reference to the BBC production he loved as a boy, Jacob Bronowski’s “Ascent of Man.” (In fact, like Ferguson’s three previous books, “Colossus,” “Empire” and “The War of the World,” “The Ascent of Money” was written as a companion to a TV documentary series.)
“Behind each great historical phenomenon there lies a financial secret,” Ferguson says. He goes into fascinating detail about how “it was Nathan Rothschild as much as the Duke of Wellington who defeated Napoleon at Waterloo” by selling bonds and stockpiling gold for the British Army. The richest bankers on the Continent in the 19th century, the Rothschilds became known as die Finanzbonaparten (the Bonapartes of finance). And, as Ferguson argues, they also played a crucial part in the South’s defeat in the Civil War by declining to invest in Confederate cotton-collateralized bonds. Imperial Spain amassed vast amounts of bullion from the New World, but it faded as a power while the British and Dutch empires prospered because they had sophisticated banking systems and Spain did not. Similarly, the French Revolution was made all but inevitable by the machinations of an unscrupulous Scotsman named John Law, whom the deeply indebted French monarchy recklessly placed in charge of public finance. “It was as if one man was simultaneously running all 500 of the top U.S. corporations, the U.S. Treasury and the Federal Reserve System,” Ferguson writes. Law proceeded to single-handedly create the subprime mortgage bubble of his day. When it collapsed, the fallout “fatally set back France’s financial development, putting Frenchmen off paper money and stock markets for generations.” Wilhelmine Germany, meanwhile, came up short in World War I because it “did not have access to the international bond market,” Ferguson writes. Every one of these episodes sounds like a warning shot: Will America be the next great power to fall because of unsound finance?
The question is particularly pressing in the midst of what is widely seen as the worst financial crisis since the Great Depression. And Ferguson’s conclusions are troubling. Only a few years after accusing Washington of “imperial understretch” for failing to flex its muscles — and without any hint of irony — Ferguson now argues that the United States may be succumbing to financial overstretch. Deeply in debt to the rest of the world, it has become part of a “dual country” that he calls “Chimerica.” “In effect, the People’s Republic of China has become banker to the United States of America,” he writes. Until the current global financial crisis, this seemed to be a fairly reliable relationship. American consumers over-bought goods and over-borrowed from China, and the Chinese in turn accumulated huge dollar surpluses that they plowed back into Wall Street investments, thereby supplying profligate Americans with the financing we needed to consume and sustain ourselves as the lone superpower. “For a time it seemed like a marriage made in heaven,” Ferguson writes. “The East Chimericans did the saving. The West Chimericans did the spending.”
Suddenly, however, it’s looking more like a marriage made in hell. According to Ferguson, much of the current crisis stems from this increasingly uneasy symbiosis. It turns out “there was a catch. The more China was willing to lend to the United States, the more Americans were willing to borrow.” This cascade of easy money, he argues, “was the underlying cause of the surge in bank lending, bond issuance and new derivative contracts that Planet Finance witnessed after 2000. . . . And Chimerica — or the Asian ‘savings glut,’ as Ben Bernanke called it — was the underlying reason why the U.S. mortgage market was so awash with cash in 2006 that you could get a 100 percent mortgage with no income, no job or assets.” Going forward, the system seems likely to be increasingly unstable, as Treasury Secretary Henry Paulson suggested recently when he warned that unless fundamental changes are made, “the pressure from global imbalances will simply build up again until it finds another outlet.”
Previous periods of global stability and peace had relied on judicious mechanisms like the Congress of Vienna or the Bretton Woods agreements. Now the international system — and America’s position within it — has come to depend on what looks more like a global Rube Goldberg machine running on hot money. And though Ferguson doesn’t come out and say it, the Chinese may now have the upper hand in this chimerical Chimerica. While so far it’s worked in Beijing’s interest to underwrite America’s rampant consumerism — because we buy so many of their goods — the Chinese also have the option of recycling some of their surplus billions into their own huge population. We, on the other hand, don’t have the option not to borrow from them. Indeed, it’s no secret on Wall Street and in Washington that the real targets of President Bush’s $700 billion bailout plan were the foreign funds, including “sovereign wealth funds,” that keep America’s financial system afloat. Unless these foreign financiers — principally China and Japan — get reassurance that the global financial system can function properly again, America’s long period of growth and power may be coming to a close.
Perhaps, then, the conclusion should be that Americans need to flex our muscles less as an empire and fight a little harder for fiscal sobriety and balance in our foreign policy. To be fair, Ferguson was early in seeing that America’s fiscal problems were serious. In “Colossus,” he warned presciently of America’s increasing reliance on Chinese capital, although he argued then that we should be mainly worried about domestic entitlements like Medicare and Social Security — indicating that he, like the Bush administration, seriously underestimated the ultimate cost of the Iraq war.
As with Ferguson’s three previous documentary efforts, “The Ascent of Money” sometimes feels as if it were laid out like a shooting script. Ferguson will depart from an exegesis on the 17th century or the Great Depression to pop up in post-Katrina New Orleans or Memphis (for a report on bankruptcies), and we surmise it’s to record another on-scener for PBS. The book, whose main text comprises a scant 360 pages (a light effort for Ferguson, especially considering the ambitious subtitle), is also reductionist at times. Is it really fair to say Chimerica is mainly at the root of our current problems? (A lack of oversight and regulation of the subprime mortgage market here at home had a lot to do with it as well.) China’s backwardness between the 1700s and 1970s was largely due to its dearth of financial innovation, he suggests, but other historians have pointed equally to the absence of technological innovation of the kind that arose in Europe’s close-quartered patchwork of states because of repeated wars.
And in the end, as Ferguson himself seems to acknowledge, the scope of the financial crisis that is plaguing the world today calls into question the book’s premise — that the “trajectory” of finance through history, while “jagged and irregular,” is “unquestionably upwards.” Our increasingly sophisticated finance clearly contains self-destructive tendencies, and its very complexity may have become our undoing. Ferguson wonders whether the cruel realities of biological evolution are the model for what is happening now. Contemplating the financial Armageddon that has devastated Wall Street and set back globalization, he asks: “Are we on the brink of a ‘great dying’ in the financial world — one of those mass extinctions of species that have occurred periodically, like the end-Cambrian extinction that killed off 90 percent of Earth’s species, or the Cretaceous-Tertiary catastrophe that wiped out the dinosaurs?” Here we thought we were making all this progress as a species, and suddenly we find our supposed innovations lumped with Tyrannosaurus rex. Doesn’t sound like much of an ascent to me.
Michael Hirsh is Newsweek’s national economics correspondent and the author of “At War With Ourselves: Why America Is Squandering Its Chance to Build a Better World.”
Follow the Money
By MICHAEL HIRSH
Skip to next paragraph
THE ASCENT OF MONEY
A Financial History of the World
By Niall Ferguson
Illustrated. 442 pp. The Penguin Press. $29.95
Niall Ferguson, it is fair to say, is a one-man book factory. In fact, if the American economy cranked out goods as prolifically as Ferguson does histories, we might not be in half the fix we are in right now. But then Ferguson wouldn’t have nearly as much to write about. The onetime enfant terrible of the Oxbridge historical establishment, Ferguson specializes in finding fault with great powers, especially the way they mismanage their empires. Ferguson first came to notice a decade ago with “The Pity of War,” a revisionist tour de force arguing that Britain made a world-historical error by entering World War I (and thereby destroying its empire) when it should have simply waited out the swift German conquest of Europe and remained a superpower, with Europe the better for it. More recently the Scottish-born Ferguson, who now spends half the year teaching at Harvard and the other half at Oxford, has turned his attention to the prodigal young heir to the British imperial crown, the United States. In “The Cash Nexus” (2001) and “Colossus” (2004), he urged Americans to emerge from their self-denial and fulfill their obvious destiny as the next “liberal” empire spreading the light of democracy and Anglo-Saxon legalism across the globe. “The greatest disappointment facing the world in the 21st century,” Ferguson concluded in “The Cash Nexus” (published in the opening months of the Bush presidency), is that “the leaders of the one state with the economic resources to make the world a better place lack the guts to do it.” Ferguson later supported the Iraq war as evidence that Washington had finally gotten up its courage, imperially speaking.
Whatever one thinks of his arguments, it’s impossible to ignore Niall Ferguson. He’s like the brightest kid in the debating club, the one who pulls all-nighters in the library and ferrets out facts no one thought to uncover. And in his latest book, “The Ascent of Money” — humbly subtitled “A Financial History of the World” — Ferguson takes us on an often enlightening and enjoyable spelunking tour through the underside of great events, a lesson in how the most successful great powers have always been underpinned by smart money. “The ascent of money has been essential to the ascent of man,” he writes, making a conscious reference to the BBC production he loved as a boy, Jacob Bronowski’s “Ascent of Man.” (In fact, like Ferguson’s three previous books, “Colossus,” “Empire” and “The War of the World,” “The Ascent of Money” was written as a companion to a TV documentary series.)
“Behind each great historical phenomenon there lies a financial secret,” Ferguson says. He goes into fascinating detail about how “it was Nathan Rothschild as much as the Duke of Wellington who defeated Napoleon at Waterloo” by selling bonds and stockpiling gold for the British Army. The richest bankers on the Continent in the 19th century, the Rothschilds became known as die Finanzbonaparten (the Bonapartes of finance). And, as Ferguson argues, they also played a crucial part in the South’s defeat in the Civil War by declining to invest in Confederate cotton-collateralized bonds. Imperial Spain amassed vast amounts of bullion from the New World, but it faded as a power while the British and Dutch empires prospered because they had sophisticated banking systems and Spain did not. Similarly, the French Revolution was made all but inevitable by the machinations of an unscrupulous Scotsman named John Law, whom the deeply indebted French monarchy recklessly placed in charge of public finance. “It was as if one man was simultaneously running all 500 of the top U.S. corporations, the U.S. Treasury and the Federal Reserve System,” Ferguson writes. Law proceeded to single-handedly create the subprime mortgage bubble of his day. When it collapsed, the fallout “fatally set back France’s financial development, putting Frenchmen off paper money and stock markets for generations.” Wilhelmine Germany, meanwhile, came up short in World War I because it “did not have access to the international bond market,” Ferguson writes. Every one of these episodes sounds like a warning shot: Will America be the next great power to fall because of unsound finance?
The question is particularly pressing in the midst of what is widely seen as the worst financial crisis since the Great Depression. And Ferguson’s conclusions are troubling. Only a few years after accusing Washington of “imperial understretch” for failing to flex its muscles — and without any hint of irony — Ferguson now argues that the United States may be succumbing to financial overstretch. Deeply in debt to the rest of the world, it has become part of a “dual country” that he calls “Chimerica.” “In effect, the People’s Republic of China has become banker to the United States of America,” he writes. Until the current global financial crisis, this seemed to be a fairly reliable relationship. American consumers over-bought goods and over-borrowed from China, and the Chinese in turn accumulated huge dollar surpluses that they plowed back into Wall Street investments, thereby supplying profligate Americans with the financing we needed to consume and sustain ourselves as the lone superpower. “For a time it seemed like a marriage made in heaven,” Ferguson writes. “The East Chimericans did the saving. The West Chimericans did the spending.”
Suddenly, however, it’s looking more like a marriage made in hell. According to Ferguson, much of the current crisis stems from this increasingly uneasy symbiosis. It turns out “there was a catch. The more China was willing to lend to the United States, the more Americans were willing to borrow.” This cascade of easy money, he argues, “was the underlying cause of the surge in bank lending, bond issuance and new derivative contracts that Planet Finance witnessed after 2000. . . . And Chimerica — or the Asian ‘savings glut,’ as Ben Bernanke called it — was the underlying reason why the U.S. mortgage market was so awash with cash in 2006 that you could get a 100 percent mortgage with no income, no job or assets.” Going forward, the system seems likely to be increasingly unstable, as Treasury Secretary Henry Paulson suggested recently when he warned that unless fundamental changes are made, “the pressure from global imbalances will simply build up again until it finds another outlet.”
Previous periods of global stability and peace had relied on judicious mechanisms like the Congress of Vienna or the Bretton Woods agreements. Now the international system — and America’s position within it — has come to depend on what looks more like a global Rube Goldberg machine running on hot money. And though Ferguson doesn’t come out and say it, the Chinese may now have the upper hand in this chimerical Chimerica. While so far it’s worked in Beijing’s interest to underwrite America’s rampant consumerism — because we buy so many of their goods — the Chinese also have the option of recycling some of their surplus billions into their own huge population. We, on the other hand, don’t have the option not to borrow from them. Indeed, it’s no secret on Wall Street and in Washington that the real targets of President Bush’s $700 billion bailout plan were the foreign funds, including “sovereign wealth funds,” that keep America’s financial system afloat. Unless these foreign financiers — principally China and Japan — get reassurance that the global financial system can function properly again, America’s long period of growth and power may be coming to a close.
Perhaps, then, the conclusion should be that Americans need to flex our muscles less as an empire and fight a little harder for fiscal sobriety and balance in our foreign policy. To be fair, Ferguson was early in seeing that America’s fiscal problems were serious. In “Colossus,” he warned presciently of America’s increasing reliance on Chinese capital, although he argued then that we should be mainly worried about domestic entitlements like Medicare and Social Security — indicating that he, like the Bush administration, seriously underestimated the ultimate cost of the Iraq war.
As with Ferguson’s three previous documentary efforts, “The Ascent of Money” sometimes feels as if it were laid out like a shooting script. Ferguson will depart from an exegesis on the 17th century or the Great Depression to pop up in post-Katrina New Orleans or Memphis (for a report on bankruptcies), and we surmise it’s to record another on-scener for PBS. The book, whose main text comprises a scant 360 pages (a light effort for Ferguson, especially considering the ambitious subtitle), is also reductionist at times. Is it really fair to say Chimerica is mainly at the root of our current problems? (A lack of oversight and regulation of the subprime mortgage market here at home had a lot to do with it as well.) China’s backwardness between the 1700s and 1970s was largely due to its dearth of financial innovation, he suggests, but other historians have pointed equally to the absence of technological innovation of the kind that arose in Europe’s close-quartered patchwork of states because of repeated wars.
And in the end, as Ferguson himself seems to acknowledge, the scope of the financial crisis that is plaguing the world today calls into question the book’s premise — that the “trajectory” of finance through history, while “jagged and irregular,” is “unquestionably upwards.” Our increasingly sophisticated finance clearly contains self-destructive tendencies, and its very complexity may have become our undoing. Ferguson wonders whether the cruel realities of biological evolution are the model for what is happening now. Contemplating the financial Armageddon that has devastated Wall Street and set back globalization, he asks: “Are we on the brink of a ‘great dying’ in the financial world — one of those mass extinctions of species that have occurred periodically, like the end-Cambrian extinction that killed off 90 percent of Earth’s species, or the Cretaceous-Tertiary catastrophe that wiped out the dinosaurs?” Here we thought we were making all this progress as a species, and suddenly we find our supposed innovations lumped with Tyrannosaurus rex. Doesn’t sound like much of an ascent to me.
Michael Hirsh is Newsweek’s national economics correspondent and the author of “At War With Ourselves: Why America Is Squandering Its Chance to Build a Better World.”
Subscribe to:
Posts (Atom)