Ascent of Money A Financial History of the World

Winner of the 2013 Lionel Gelber Prize

There has always been some gap between rich and poor in this country, but in the last few decades what it means to be rich has changed dramatically. Alarmingly, the greatest income gap is not between the 1 percent and the 99 percent, but within the wealthiest 1 percent of our nation--as the merely wealthy are left behind by the rapidly expanding fortunes of the new global super-rich. Forget the 1 percent; Plutocrats proves that it is the wealthiest 0.1 percent who are outpacing the rest of us at break-neck speed.

Whats changed is more than numbers. Today, most colossal fortunes are new, not inherited--amassed by perceptive businessmen who see themselves as deserving victors in a cut-throat international competition. As a transglobal class of successful professionals, todays self-made oligarchs often feel they have more in common with one another than with their countrymen back home. Bringing together the economics and psychology of these new super-rich, Plutocrats puts us inside a league very much of its own, with its own rules.

The closest mirror to our own time is the late nineteenth century Gilded Age--the era of powerful ‘robber barons like Andrew Carnegie and John D. Rockefeller. Then as now, emerging markets and innovative technologies collided to produce unprecedented wealth for more people than ever in human history. Yet those at the very top benefited far more than others--and from this pinnacle they exercised immense and unchecked power in their countries. Todays closest analogue to these robber barons can be found in the turbulent economies of India, Brazil, and China, all home to ferocious market competition and political turmoil. But wealth, corruption, and populism are no longer constrained by national borders, so this new Gilded Age is already transforming the economics of the West as well. Plutocrats demonstrates how  social upheavals generated by the first Gilded Age may pale in comparison to what is in store for us, as the wealth of the entire globalized world is concentrated in fewer and fewer hands.

Cracking open the tight-knit world of the new global super-rich is Chrystia Freeland, an acclaimed business journalist who has spent nearly two decades reporting on the new transglobal elite. She parses an internal Citigroup memo that urges clients to design portfolios around the international “Plutonomy” and not the national “rest”; follows Russian, Mexican, and Indian oligarchs during the privatization boom as they manipulate the levers of power to commandeer their local economies; breaks down the gender divide between the vast female-managed ‘middle class and the worlds one thousand billionaires; shows how, by controlling both the economic and political institutions of their nation, the richest members of Chinas National Peoples Congress have amassed more wealth than every branch of American government combined--the president, his cabinet, the justices of the Supreme Court, and both houses of Congress.

Though the results can be shocking, Freeland dissects the lives of the worlds wealthiest individuals with empathy, intelligence, and deep insight. Brightly written, powerfully researched, and propelled by fascinating original interviews with the plutocrats themselves, Plutocrats is a tour-de-force of social and economic history, and the definitive examination of inequality in our time.

-The Wall Street Journal

"[An] excellent, just in time guide to the history of finance and financial crisis."

-The Washington Post

" Shrewdly anticipates many aspects of the current financial crisis, which has toppled banks, precipitated gigantic government bailouts and upended global markets."

-Michiko Kakutani, The New York Times

A Booklist Editor's Choice of 2012

"Rising inequality is one of the most pressing issues of our time. Chrystia Freeland's Plutocrats provides us with a glimpse of the lives of America's elites and a disquieting look at the society that produces them. This well-written and lively account is a good primer for anyone who wants to understand one extreme of America today."

    --Joseph Stiglitz, author of The Price of Inequality; University Professor, Columbia University

"Mix crisp economics, ripe history, and two pinches of salty gossip, and you have the flavor of Chrystia Freelands entertaining book. From the opulent Bradley Martin ball of 1897 to its modern echoes in Sun Valley and Davos, Plutocrats chronicles the habits of the workaholic overclass—its taste for British public schools, its immodest philanthropy, its fundamental rootlessness. Even as she describes this gilded tribe, Freeland advances a paradoxical warning. Open societies may allow super-achievers to pile up extraordinary riches—and to feel that they have more or less deserved them. But the more these meritocrats succeed, the more likely they are to entrench their own offspring at the top of the heap, negating the very meritocracy that afforded them their chances. Already in the United States, graduating from college is more closely linked to having wealthy parents than to grades in high school. When class matters more than going to class, Freelands message must be treated with the utmost seriousness."

    --Sebastian Mallaby, author of More Money than God: Hedge Funds and the Making of a New Elite

"Our world increasingly revolves around global elites who not only have an oversized effect on our politics but also set the trends and furnish us with the dominant discourse. In this delightful book, Chrystia Freeland tells the story of how we got here and what distinguishes our elites from those of previous epochs. Most importantly, she explains why the elites' dominance, even when it appears benign, is a challenge to our institutions and gives us clues about how we can overcome it."

    --Daron Acemoglu, co-author of Why Nations Fail; economics professor, Massachusetts Institute of Technology

"The worlds wealthy elite are more wealthy, more knit together, more separate from their fellow citizens and probably more powerful than ever before. This very important  book describes their lives and more important how their lives affect all of ours. It should be read by anyone concerned with how their world is being shaped and how it will evolve."

    --Lawrence Summers, Former U.S. Treasury Secretary; Charles W. Eliot , University Professor, Harvard University

"Chrystia Freeland has written a fascinating account of perhaps the most important economic and political development of our era: the rise of a new plutocracy. She explains that todays wealthy are different from their predecessors: more skilled and more global; and more often employees than owners, notably so in finance and high technology. By putting together stories of individuals with reading of the scholarly evidence, she gives us a clear view of what many will view as a not so brave new world."

    --Martin Wolf, Chief Economics Commentator for the Financial Times

A Booklist Editor's Choice of 2012

"Rising inequality is one of the most pressing issues of our time. Chrystia Freeland's Plutocrats provides us with a glimpse of the lives of America's elites and a disquieting look at the society that produces them. This well-written and lively account is a good primer for anyone who wants to understand one extreme of America today."

    --Joseph Stiglitz, author of The Price of Inequality; University Professor, Columbia University

"Mix crisp economics, ripe history, and two pinches of salty gossip, and you have the flavor of Chrystia Freelands entertaining book. From the opulent Bradley Martin ball of 1897 to its modern echoes in Sun Valley and Davos, Plutocrats chronicles the habits of the workaholic overclass—its taste for British public schools, its immodest philanthropy, its fundamental rootlessness. Even as she describes this gilded tribe, Freeland advances a paradoxical warning. Open societies may allow super-achievers to pile up extraordinary riches—and to feel that they have more or less deserved them. But the more these meritocrats succeed, the more likely they are to entrench their own offspring at the top of the heap, negating the very meritocracy that afforded them their chances. Already in the United States, graduating from college is more closely linked to having wealthy parents than to grades in high school. When class matters more than going to class, Freelands message must be treated with the utmost seriousness."

    --Sebastian Mallaby, author of More Money than God: Hedge Funds and the Making of a New Elite

"Our world increasingly revolves around global elites who not only have an oversized effect on our politics but also set the trends and furnish us with the dominant discourse. In this delightful book, Chrystia Freeland tells the story of how we got here and what distinguishes our elites from those of previous epochs. Most importantly, she explains why the elites' dominance, even when it appears benign, is a challenge to our institutions and gives us clues about how we can overcome it."

    --Daron Acemoglu, co-author of Why Nations Fail; economics professor, Massachusetts Institute of Technology

"The worlds wealthy elite are more wealthy, more knit together, more separate from their fellow citizens and probably more powerful than ever before. This very important  book describes their lives and more important how their lives affect all of ours. It should be read by anyone concerned with how their world is being shaped and how it will evolve."

    --Lawrence Summers, Former U.S. Treasury Secretary; Charles W. Eliot , University Professor, Harvard University

"Chrystia Freeland has written a fascinating account of perhaps the most important economic and political development of our era: the rise of a new plutocracy. She explains that todays wealthy are different from their predecessors: more skilled and more global; and more often employees than owners, notably so in finance and high technology. By putting together stories of individuals with reading of the scholarly evidence, she gives us a clear view of what many will view as a not so brave new world."

    --Martin Wolf, Chief Economics Commentator for the Financial Times

Bread, cash, dosh, dough, loot, lucre, moolah, readies, the wherewithal: Call it what you like, it matters. To Christians, love of it is the root of all evil. To generals, itas the sinews of war. To revolutionaries, itas the chains of labor. But in The Ascent of Money, Niall Ferguson shows that finance is in fact the foundation of human progress. Whatas more, he reveals financial history as the essential backstory behind all history.

Through Fergusonas 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 worldas 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? Whatas 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 canat 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 worldas biggest countries, India and China, from poverty to wealth in the space of a single generationaan economic transformation unprecedented in human history.

Yet the central lesson of the financial history is that sooner or later every bubble burstsasooner or later the bearish sellers outnumber the bullish buyers, sooner or later greed flips into fear. And thatas why, whether youare scraping by or rolling in it, thereas never been a better time to understand the ascent of money.

Niall Ferguson follows the money to tell the human story behind the evolution of our financial system, from its genesis in ancient Mesopotamia to the latest upheavals on what he calls Planet Finance. What's more, Ferguson reveals financial history as the essential backstory behind all history, arguing that the evolution of credit and debt was as important as any technological innovation in the rise of civilization. As Ferguson traces the crisis from ancient Egypt's Memphis to today's Chongqing, he offers bold and compelling new insights into the rise--and fall--of not just money but Western power as well.

In this updated edition, Niall Ferguson brings his classic financial history of the world up to the present day, tackling the populist backlash that followed the 2008 crisis, the descent of "Chimerica" into a trade war, and the advent of cryptocurrencies, such as Bitcoin, with his signature clarity and expert lens.

The Ascent of Money reveals finance as the backbone of history, casting a new light on familiar events: the Renaissance enabled by Italian foreign exchange dealers, the French Revolution traced back to a stock market bubble, the 2008 crisis traced from America's bankruptcy capital, Memphis, to China's boomtown, Chongqing. We may resent the plutocrats of Wall Street but, as Ferguson argues, the evolution of finance has rivaled the importance of any technological innovation in the rise of civilization. Indeed, to study the ascent and descent of money is to study the rise and fall of Western power itself.

An] excellent, just in time guide to the history of finance and financial crisis. --The Washington Post

Fascinating. --Fareed Zakaria, Newsweek

In this updated edition, Niall Ferguson brings his classic financial history of the world up to the present day, tackling the populist backlash that followed the 2008 crisis, the descent of Chimerica into a trade war, and the advent of cryptocurrencies, such as Bitcoin, with his signature clarity and expert lens.

The Ascent of Money reveals finance as the backbone of history, casting a new light on familiar events: the Renaissance enabled by Italian foreign exchange dealers, the French Revolution traced back to a stock market bubble, the 2008 crisis traced from America's bankruptcy capital, Memphis, to China's boomtown, Chongqing. We may resent the plutocrats of Wall Street but, as Ferguson argues, the evolution of finance has rivaled the importance of any technological innovation in the rise of civilization. Indeed, to study the ascent and descent of money is to study the rise and fall of Western power itself.

Niall Ferguson follows the money to tell the human story behind the evolution of our financial system, from its genesis in ancient Mesopotamia to the latest upheavals on what he calls Planet Finance. What?s more, Ferguson reveals financial history as the essential backstory behind all history, arguing that the evolution of credit and debt was as important as any technological innovation in the rise of civilization. As Ferguson traces the crisis from ancient Egypt?s Memphis to today?s Chongqing, he offers bold and compelling new insights into the rise? and fall?of not just money but Western power as well.

A deeply researched and profoundly timely exposé of income inequality

Alarmingly insightful and refreshingly nonpartisan, PLUTOCRATS  is the missing piece in our political conversation, a groundbreaking examination of wealth disparity. There has always been some gap between rich and poor in this country, but in the last few decades what it means to be rich has changed dramatically. While the wealthiest 10 percent of Americans now receive half the nation’s income—the largest percentage in our history—the real money flows even higher up. Forget the 1 percent; it’s the wealthiest .1 percent who are outpacing the rest of us at breakneck speed.

What’s changed is more than numbers. Instead of inheritance, today’s colossal fortunes are amassed by the diligent toiling of smart, perceptive businesspeople who see themselves as deserving victors in a cut-throat international competition. As a transglobal class of highly successful professionals, today’s self-made oligarchs often have more in common with one another than with their countrymen back home.

Cracking open this tight-knit world is Chrystia Freeland, an acclaimed business journalist on both sides of the Atlantic. At ease in Davos or Dubai, Freeland has reported on the lives and minds of these new super elites for nearly a decade. Grounding her interviews in the economics and history of modern capitalism, Freeland provides countless examples of the new wealth and its consequences. She reveals the internal Citigroup memo that urges clients to design portfolios around the international “Plutonomy” and not the national “rest”; discusses the auction of a massive ex-Soviet steel mill contested between a Luxembourg company, an Indian company registered in the Netherlands, and a consortium of Russians and Ukranian companies; showcases the three-million-dollar birthday party of a New York financier months before the financial meltdown; and details the closed-door 2005 SEC meeting in which the U.S. government allowed investment banks to write their own regulatory laws, with devastating consequences.

 A consummate journalist and industry specialist, Freeland dissects the lives of the world’s wealthiest individuals with empathy, intelligence, and deep insight. Brightly written and powerfully researched, Freeland’s PLUTOCRATS will be a lightning rod event in the midst of this contested election season.

There has always been some gap between rich and poor in this country, but in the last few decades what it means to be rich has changed dramatically. Alarmingly, the greatest income gap is not between the 1 percent and the 99 percent, but within the wealthiest 1 percent of our nation--as the merely wealthy are left behind by the rapidly expanding fortunes of the new global super-rich. Forget the 1 percent; Plutocrats proves that it is the wealthiest 0.1 percent who are outpacing the rest of us at break-neck speed.

Whats changed is more than numbers. Today, most colossal fortunes are new, not inherited--amassed by perceptive businessmen who see themselves as deserving victors in a cut-throat international competition. As a transglobal class of successful professionals, todays self-made oligarchs often feel they have more in common with one another than with their countrymen back home. Bringing together the economics and psychology of these new super-rich, Plutocrats puts us inside a league very much of its own, with its own rules.

The closest mirror to our own time is the late nineteenth century Gilded Age--the era of powerful ‘robber barons like Andrew Carnegie and John D. Rockefeller. Then as now, emerging markets and innovative technologies collided to produce unprecedented wealth for more people than ever in human history. Yet those at the very top benefited far more than others--and from this pinnacle they exercised immense and unchecked power in their countries. Todays closest analogue to these robber barons can be found in the turbulent economies of India, Brazil, and China, all home to ferocious market competition and political turmoil. But wealth, corruption, and populism are no longer constrained by national borders, so this new Gilded Age is already transforming the economics of the West as well. Plutocrats demonstrates how  social upheavals generated by the first Gilded Age may pale in comparison to what is in store for us, as the wealth of the entire globalized world is concentrated in fewer and fewer hands.

Cracking open the tight-knit world of the new global super-rich is Chrystia Freeland, an acclaimed business journalist who has spent nearly two decades reporting on the new transglobal elite. She parses an internal Citigroup memo that urges clients to design portfolios around the international “Plutonomy” and not the national “rest”; follows Russian, Mexican, and Indian oligarchs during the privatization boom as they manipulate the levers of power to commandeer their local economies; breaks down the gender divide between the vast female-managed ‘middle class and the worlds one thousand billionaires; shows how, by controlling both the economic and political institutions of their nation, the richest members of Chinas National Peoples Congress have amassed more wealth than every branch of American government combined--the president, his cabinet, the justices of the Supreme Court, and both houses of Congress.

Though the results can be shocking, Freeland dissects the lives of the worlds wealthiest individuals with empathy, intelligence, and deep insight. Brightly written, powerfully researched, and propelled by fascinating original interviews with the plutocrats themselves, Plutocrats is a tour-de-force of social and economic history, and the definitive examination of inequality in our time.

Winner of the 2013 Lionel Gelber Prize

There has always been some gap between rich and poor in this country, but in the last few decades what it means to be rich has changed dramatically. Alarmingly, the greatest income gap is not between the 1 percent and the 99 percent, but within the wealthiest 1 percent of our nation--as the merely wealthy are left behind by the rapidly expanding fortunes of the new global super-rich. Forget the 1 percent; Plutocrats proves that it is the wealthiest 0.1 percent who are outpacing the rest of us at break-neck speed.

Whats changed is more than numbers. Today, most colossal fortunes are new, not inherited--amassed by perceptive businessmen who see themselves as deserving victors in a cut-throat international competition. As a transglobal class of successful professionals, todays self-made oligarchs often feel they have more in common with one another than with their countrymen back home. Bringing together the economics and psychology of these new super-rich, Plutocrats puts us inside a league very much of its own, with its own rules.

The closest mirror to our own time is the late nineteenth century Gilded Age--the era of powerful ‘robber barons like Andrew Carnegie and John D. Rockefeller. Then as now, emerging markets and innovative technologies collided to produce unprecedented wealth for more people than ever in human history. Yet those at the very top benefited far more than others--and from this pinnacle they exercised immense and unchecked power in their countries. Todays closest analogue to these robber barons can be found in the turbulent economies of India, Brazil, and China, all home to ferocious market competition and political turmoil. But wealth, corruption, and populism are no longer constrained by national borders, so this new Gilded Age is already transforming the economics of the West as well. Plutocrats demonstrates how  social upheavals generated by the first Gilded Age may pale in comparison to what is in store for us, as the wealth of the entire globalized world is concentrated in fewer and fewer hands.

Cracking open the tight-knit world of the new global super-rich is Chrystia Freeland, an acclaimed business journalist who has spent nearly two decades reporting on the new transglobal elite. She parses an internal Citigroup memo that urges clients to design portfolios around the international “Plutonomy” and not the national “rest”; follows Russian, Mexican, and Indian oligarchs during the privatization boom as they manipulate the levers of power to commandeer their local economies; breaks down the gender divide between the vast female-managed ‘middle class and the worlds one thousand billionaires; shows how, by controlling both the economic and political institutions of their nation, the richest members of Chinas National Peoples Congress have amassed more wealth than every branch of American government combined--the president, his cabinet, the justices of the Supreme Court, and both houses of Congress.

Though the results can be shocking, Freeland dissects the lives of the worlds wealthiest individuals with empathy, intelligence, and deep insight. Brightly written, powerfully researched, and propelled by fascinating original interviews with the plutocrats themselves, Plutocrats is a tour-de-force of social and economic history, and the definitive examination of inequality in our time.