Tuesday, December 9, 2008

Two Great Christmas Gifts

With Christmas just a couple of weeks away here are two really worthwhile book recommendations that will stimulate your mind and open your eyes to the future, by reviewing the past.

Major kudos to Steve DeAngelis of Enterra Solutions for this post. Steve writes about Niall Ferguson, the Laurence A. Tisch Professor of History at Harvard University and the William Ziegler Professor at Harvard Business School, on the release of his new book, The Ascent of Money: The Financial History of the World.

Steve links a review by Shelby Coffey III in the November 30, 2008 Washington Post, "Markets Don't Make Bubbles, People Do," and makes insightful comments about both the review and Ferguson's book.

A brief excerpt of Steve's post.

People choking in the grasp of the current financial crisis are wondering how we got in this position and what we can do about it. Ferguson's web site provides this synopsis of his new book:

"Bread, cash, dosh, dough, loot: Call it what you like, it matters. To Christians, love of it is the root of all evil. To generals, it’s the sinews of war. To revolutionaries, it’s the chains of labour. But in The Ascent of Money, Niall Ferguson shows that finance is in fact the foundation of human progress. What’s more, he reveals financial history as the essential back-story behind all history. The evolution of credit and debt was as important as any technological innovation in the rise of civilization, from ancient Babylon to the silver mines of Bolivia.

...The importance of Ferguson's book is that it highlights how essential capital flows are for the success of globalization. The only way to bring millions of more people out of poverty is to create wealth. Ferguson's book explains why financial systems are essential in that endeavor.

Coffey's review noted these remarks made by Ferguson on MSNBC.

Ferguson is making the rounds with his new book, saying last week on MSNBC that the United States should follow up the G-20 Economic Summit with a "G-2" meeting with just the Chinese. The professor also winningly confesses that even he is confused about the thrust of Treasury Secretary Henry Paulson's $700 billion rescue fund. Ferguson has, nonetheless, written an admirably illuminating book that will take its place beside such modern classics as John Train's The Money Masters, Peter L. Bernstein's Against the Gods, and Adam Smith's Supermoney.

Ferguson's comments about a summit with China mirror much of what Thomas Barnett has been advocating about locking China in at today's prices.

Read the whole post: Show Me the Money.

Niall Ferguson is one of my favorite authors, writing The War of the World and Colossus: The Rise and Fall of the American Empire among other best sellers. His expertise in economic history, coupled with an amazing ability to be a great storyteller gives him two tools, that make him one of the important scribes of our time. Among his teaching positions he is also a resident faculty member of the Minda de Gunzburg Center for European Studies. He is also a Senior Research Fellow of Jesus College, Oxford University, and a Senior Fellow of the Hoover Institution, Stanford University.

His newly released book The Ascent of Money: A Financial History of the World is described this way on Amazon.

Niall Ferguson follows the money to tell the human story behind the evolution of finance, from its origins in ancient Mesopotamia to the latest upheavals on what he calls Planet Finance.

Through Ferguson’s expert lens familiar historical landmarks appear in a new and sharper financial focus. Suddenly, the civilization of the Renaissance looks very different: a boom in the market for art and architecture made possible when Italian bankers adopted Arabic mathematics. The rise of the Dutch republic is reinterpreted as the triumph of the world’s first modern bond market over insolvent Habsburg absolutism. And the origins of the French Revolution are traced back to a stock market bubble caused by a convicted Scot murderer.

With the clarity and verve for which he is known, Ferguson elucidates key financial institutions and concepts by showing where they came from. What is money? What do banks do? What’s the difference between a stock and a bond? Why buy insurance or real estate? And what exactly does a hedge fund do?

This is history for the present. Ferguson travels to post-Katrina New Orleans to ask why the free market can’t provide adequate protection against catastrophe. He delves into the origins of the subprime mortgage crisis.

Perhaps most important, The Ascent of Money documents how a new financial revolution is propelling the world’s biggest countries, India and China, from poverty to wealth in the space of a single generation—an economic transformation unprecedented in human history.

Based on my previous reading of Ferguson's work I hardily recommend this book to everyone who desires a clear understanding of the current times and how in the end, it is always the money that makes the world go around.

Ferguson's book should be have equal billing on any one's Christmas wish list alongside Thomas Barnett's book, Great Powers: America and the World After Bush to be published in February 2009. Tom recently posted the table of contents on his blog to give readers a road map of where he is going with his vision of grand strategy.

Great Powers Table of Contents and for more Great Powers material.

It is described this way at Amazon.

In civilian and military circles alike, The Pentagon’s New Map became one of the most talked about books of 2004. “A combination of Tom Friedman on globalization and Carl von Clausewitz on war, [it is] the red-hot book among the nation’s admirals and generals,” wrote David Ignatius in The Washington Post. Barnett’s second book, Blueprint for Action, demonstrated how to put the first book’s principles to work. Now, in Great Powers, Barnett delivers his most sweeping— and important—book of all.

In Great Powers, Barnett offers a tour de force analysis of the grand realignments that are both already here and coming up fast in the spheres of economics, diplomacy, defense, technology, security, the environment, and much more. The “great powers” are no longer just the world’s major nation-states but the powerful forces, past, present, and future, moving with us and past us like a freight train. It is not a simple matter of a course correction but of a complete recalibration, and the opportunities it presents are far greater than the perils. Barnett gives us a fundamental understanding of both, showing us not only how the world is now but how it will be.

I will have more on Great Powers in the coming weeks.

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