The Ascent of Money

2008, Economics  -   54 Comments
8.37
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Ratings: 8.37/10 from 70 users.

The Ascent of MoneyProfessor Niall Ferguson examines the origins of the pillars of the world’s financial system, and how behind every great historical phenomenon – empires and republics, wars and revolutions – there lies a financial secret.

Episode 1: Dreams of Avarice. From Shylock’s pound of flesh to the loan sharks of Glasgow, from the ‘promises to pay’ on Babylonian clay tablets to the Medici banking system, Professor Ferguson explains the origins of credit and debt and why credit networks are indispensable to any civilization.

Episode 2: Human Bondage. How did finance become the realm of the masters of the universe? Through the rise of the bond market in Renaissance Italy. With the advent of bonds, war finance was transformed and spread to north-west Europe and across the Atlantic. It was the bond market that made the Rothschilds the richest and most powerful family of the 19th century. And today governments are asking it to bail them out.

Episode 3: Blowing Bubbles. Why do stock markets produce bubbles and busts? Professor Ferguson goes back to the origins of the joint stock company in Amsterdam and Paris. He draws telling parallels between the current stock market crash and the 18th-century Mississippi Bubble of Scottish financier John Law and the 2001 Enron bankruptcy. He shows why humans have a herd instinct when it comes to investment, and why no one can accurately predict when the bulls might stampede.

Episode 4: Risky Business. Life is a risky business – which is why people take out insurance. But faced with an unexpected disaster, the state has to step in. Professor Ferguson travels to post-Katrina New Orleans to ask why the free market can’t provide adequate protection against catastrophe. His quest for an answer takes him to the origins of modern insurance in the early 19th century and to the birth of the welfare state in post-war Japan.

Episode 5: Safe As Houses. It sounded so simple: give state-owned assets to the people. After all, what better foundation for a property-owning democracy than a campaign of privatisation encompassing housing? An economic theory says that markets can’t function without mortgages, because it’s only by borrowing against their assets that entrepreneurs can get their businesses off the ground. But what if mortgages are bundled together and sold off to the highest bidder?

Episode 6: Chimerica. Since the 1990s, once risky markets in Asia, Latin America and eastern Europe have become better investments than the UK or US stock market. The explanation is the rise of ‘Chimerica’, the economic marriage of China and the United States. But does it make sense for poor Chinese savers to lend to rich American spenders?

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54 Comments / User Reviews

  1. Iljung Choi

    It is impossible to deny that money is one of roots of all human progress. And the flow of it, somewhat called as 'Finance', runs parallel with a history of mankind. we can't say a human being without the finance system in front of it. Try to understand the finance system. This is what Ferguson would like to say.

  2. Minkyu P

    We have to understand the world of finance in order not to repeat the collapse of financial market. Today’s financial world is the result of four millinia of financial evolution. Yet, the planet finance is vulnerable as ever in the world of financial boom and bust, because of human factor of propensity of unpredictable behavior and chronic inability to learn from the history.

  3. Nickie

    You shouldn't allow college professors to use the full documentary as a writing assignment. Especially a single spaced, 6 page paper...* worth a shot

    1. Lou G

      I believe we may have the same professor smh

  4. Kenneth Kelly

    The USA will be entirely financed by China and then China will begin its decline.

  5. cjay686

    One explanation concerning manmade economic/political systems is that they all have 'built-in' flaws that necessite their own demise. Even more important than the 'built-in' flaws that cause self-destruction is the corruption component. The corruption component is so prevalent and all encompasing in manmade economic/political systems that in reality distort the system to such a degree as renders it entirely unrecognizable from it's original ideal. This is in most cases understated and ignored to the detriment of the world and humanity.

  6. Kristoffer Lindstrøm

    Since there are already in-dept comments regarding the "succes" of Chile after Friedman's idea I refrain from commenting on that part.
    However I'd like to point out how ironic the end was.
    On one hand he uses the classic black swain argument, that one cannot predict the future based on experiences (induction), and in almost the same breath he claims that based on what he have shown in the documentary series shows that we can never have real stability nor efficiency.

    1. Devon Griffiths

      The probability of stability, I think, is quite low given that it has never been empirically observed before.

      As an engineer, I find the idea that a system can just regulate itself to be totally absurd. There is no such system anywhere. You can build a machine to do a task but eventually someone is going to have to repair it, and the more you intervene to take care of it, the better it's going to function. It's certainly not going to function better with less care.

      I think anyone who believes that systems can regulate themselves, should never take their car to a mechanic. It's even more laughable if we're talking about "natural" systems. Every system in nature is built to fail, without exception. It gives an illusion of stability only by incorporating instability into its functioning. Anyone who believes natural systems are inherently stable, should never see a doctor.

    2. Alexander Owen Spencer

      I wholeheartedly agree with you, no system is truly infallible or permanent. Even systems that seem sustainable require a recharge or repair in the long haul. To think that something we created could violate these laws is vain, similar to attempting to create perpetual motion machines. I think stability is attainable by making a system that only needs to be updated at regulated intervals, I just don't know that humanity will be capable of such for many generations to come.

  7. petescag

    Author is incorrect regarding Fibonacci with respect to money lending and interest. " Fibonacci was well aware of a merchant's desire to circumvent the church's ban on charging interest on loans. So he devised a way to hide the interest in a higher initial sum than the actual loan, and based his calculations on compound interest"

    The (Fabulous) Fibonacci Numbers by Posamentier and Lehmann

  8. maddy1011

    I think it was the British East India company to issue stock.. and not the Dutch East India Company as the documentary says...

  9. tony

    that guy is waaayyyyyy to animated!!!

  10. awful_truth

    A good documentary in some areas, absolutely terrible in others. When Niall Ferguson gets into Milton Friedman economics, he exposes his bias for for unfetered capitalism, and disregards the facts concerning the 'Chile project'. Check the previous blog by drewhempel for clarification. Niall Ferguson conveniently makes no mention of the CIA backing Augusto Pinoche and doing everything in their power to overthrow a democratically elected leader, or to destroy the Chilian economy prior to the fall of Allende.(later charged as a war criminal) More importantly, the shock doctrine of disaster capitalism was never attempted in the U.K or the U.S, because the people would have never supported it, and would have caused anarchy. This is precisely why Milton Friedman and the Chicago boys set up shop in Chile for their great experiment. I can only conclude that Niall Ferguson didn't want to admit that democracy and capitalism do not go hand in hand. This is why corporate power rules, and overrides any national or democratic view. Bolivia is a another great example of privitization where it became illegal to catch rainwater, because it was now owned by the Bectal corporation of San Fransisco. (major shareholder Donald Rumsfeld)
    Friedman's shock doctrine has only been implimented in countries where democracy has already been removed. Niall Ferguson makes no mention of the fact that Milton Friedman had no use for unions, protection for workers, etc, because his father's business went belly up in the U.S after they immigrated from Hungary. Friedman blamed pressure from the workers demanding better work conditions as the demise of the business.(they owned a sweatshop) Social safety nets in countries like Canada for example, and profound regulations were put in place after the great economic collapse of 1929, to prevent the very corruption that had caused it. Friedman was a staunch believer, like Alan Greenspan, that their should be no interference or influence from government regarding any business transactions. The mindset is that no one can be trusted, and since everyone is looking out for the best interests of their own investment, there is no need for regulations. That is of course until you realize that people are not looking out for their investment, because they have someone else doing it. (Bernie Madeoff - 65 billion in theft)
    In reality, no one can be trusted, period!(absolute power corrupts absolutely) This is why there has to be laws and regulations that can't be sidestepped. If there is anything people should take from this documentary, it is that evil and greed are best expressed by their creative ability to keep pulling the wool over everyone's eyes. It is this disconnect which causes people not to identify with influentual people. We think, well they would never do anything that awful. The awful truth is, 99.9% of the people do not have the wealth or power of these people, not recognizing that; no, these people will kill millions if it suits their purpose, and they don't think like you and I because they sold their soul for wealth long ago.(something 99.9% of us don't have) I leave the readers with the following thought to ponder. What is more likely to occur, democratic capitalism, or totalitarian capitalism? The answer is obvious to anyone who knows a little history, and applies a little critical thinking. To everyone else, all I can say is live and die in ignorance. Of course, this is just my opinion. Don't take my word for it, research it yourself.

    1. John Marus

      I'm thinking air-borne virus wipes out 99.9% and then, only then will the wealthy agree to your regulations. NOw bankers join the ranks of lawyers in the contest to the bottom. All you have is now, you don't have to live by their rules - live simply and always NOW, the present moment is all you'll ever have.

  11. Gareth Hayes

    Love it how he's talking about China with Hong Kong in the background. Surely he knows they have a completely different monetary and legal system... It's almost as bad as talking about North Korea with pictures of Seoul in the background.

  12. Oscar Esteban Arce Oses

    I found the documentary a lot interesting!! of course you will find as biaced films as different people opinions exist... but the film focused the financial world history and summarize it in 5 hours... and it worked for me. I liked it.

    I like that the author presented the dark side of many of the financial markets and products, for example the pension funds from Chile.

  13. Juan Carlos

    I found the first episode very interesting as it shows the evolution of money and the role and influence it has had in our society through its history, and how our country development have become so dependant on it.

  14. Martín Murillo

    During the series of events that saw of, for as long as I could, I could not understand the author's position in relation to the structure of capitalism as a historical mode of production. I would suggest that the future can emphasize in connection with that topic.

  15. Oscar Esteban Arce Oses

    A nice first episode, I could realized that our educational systems have an insufficient financial education for us: the "capitalist childhood".
    As I red in the first Rich Dad, Poor Dad book from Robert Kiyosaki, "you can't see the money" but it is so difficult to understand this.
    However, what I can do now is trying to learn more about best personal financial practices and manage my worth better, and help others to realize the difference of lending versus borrowing, investing versus expending, assets versus liabilities...

  16. namerequired

    This documentary does not mention any of the following critical topics:

    #1: What is money? Is it a commodity or a unit of measure?

    #2: Why is a record of debt (the national debt) kept for the United States, when the United States ostensibly owes itself?

    #3: Who owns the Federal Reserve?

    #4: How fractional reserve banking creates money out of thin air.

    #5: How is the public supposed to pay back debts with interest when the amount owed is larger than all the money in existence?

    #6: What is the history of central banking - specifically in regards to threats to national sovereignty and threats to the health of the economy as a whole?

    This video hints at these questions, but quickly glosses over them and then changes the subject over and over.

    1. michaeldean

      Thankfully this not yet another documentary exploring these point.
      I don't agree with Neil Ferguson on many things - in particular his apologies for Pinochet and his idea about the welfare state inevitably leading towards collapse. But, his worldly view and manner are a welcome break from the numerous other 'money' documentaries available here.
      Also, it's interesting to hear institutionalist monitory theories, contributing to an important wider debate, in such an accessible form.

    2. Jlang Lang

      Any suggestions of where these questions are answered?

    3. Mat TheCat

      Ah yes, that would be because Niall Ferguson has based his entire career on boot licking the establishment and one doesn't talk about such taboo subjects as 'Fractional Reserve Banking' or the Great Depression being caused essentially by massive credit expansion during WW1 etc etc. The socially acceptable explanation is 'it was Herd Mentality what causes it all'.

      Niall Ferguson is an id**t, yet his arrogant smarmy manner seems to impress a lot of people. It is like if someone acts and talks like they are 100% correct 110% of the time (and Ferguson's real world credentials with regards to being wise before the event are several magnitudes of order lower than that), it will impress people and the person is hailed as a genius.

  17. D

    This is 1 of my favorite documentaries. I've developed a greater understanding of the development of 'money' and the emergence of global finance. A must watch for any consumer.

  18. chris

    vladko

    all the videos are down!

  19. Ryan

    Vlatko, you are awesome. My TA was just telling us to read The Ascent of Money OR go watch the PBS documentary...he wondered if it was online yet.

    As soon as he said that, I thought: SeeUat Videos. I know it's gonna be on there.

    This site is incredible.

  20. Rakan

    can i get subtitle of the series
    thanks for this

  21. McGarvey

    @ Angie

    Yeah, thought was too simplistic! Are you using internet explorer - perhaps change your browser! Alternatively, go to google videos and look up the ascent of money there - It's a good show, I watched it when it was on TV!

  22. Angie

    Only Episode 6 shows up...the other ones are blank. Not sure why.

  23. McGarvey

    @ Angie

    All episodes are working for me! You are pressing the small play button in the bottom left of the screen and not clicking in the middle of the window(Not trying to insult your intelligence - it's just the only thing I could think of and probably something I'd do!!)

  24. Angie

    How may I access the other episodes to The Ascent of Money? I can only get Episode 6 to work.

  25. Eric

    Wow! I had no idea that bonds would be a bad investment if inflation took off! Time to re-balance my portfolio...

  26. Robert

    For those that were not able to see the entire documentary, try calling your local Libray to find out if they have it on DVD. Most Libraries in the United states have a very good and extensive catalog with Documentaries on tape and DVD.

  27. Robert

    I have seen this documentary when it aired on my local PBS station as well as numerous re-broad casts. I even checked it out from my local library. It is so good I will watch it again via this awesome, incredible website. If you enjoyed this documentary I would highly recomend the "War of the World" also by Mr. Ferguson.

  28. bod

    the last bit of episode 1 has not downloaded? What was that about "fixing it"?

  29. Eugene

    Very impressive doc.
    NINJA- thats a good one. :)

  30. Radam Deys

    The Documentary is a fresh-perspective, *BUT* it is also biased.

    It fails to include the bigger-picture of setting up of 'world-bank' post world-wars, and it does not discusses the concept of 'Usury' or 'Interest on Money' in a moral-perspective, but only on material-perspective.
    Which is a bit odd, since 'morality' is one of the basis and pillars of economics, not *only* the-profit motive.

    I would appreciate if there were an episode dealing with the 'moral' implications of 'paper-money' and 'interest on money'.

  31. Epicurean_Logic

    Definitely one of the better doc's on ecomonoics, 'the money masters' is the only other one that is comparable.

    Ferguson puts across a compelling case for his pro-system (obviously as he is a professor!) economic history/theory and brings these ideas up to the modern in a logical manner.

    Interestingly this is one of the few doc's on money that puts a positive and intelligent spin on loans and dept theory. This really opened up my eyes to the fact that there are some positive outcomes to dept, primarily that dept is ok if you are using it to make more money.

    I was also happy to see (at last) some reasoning behind the Jewish/money lending history so that we can begin to disseminate the 'it woz da Jews' mentality that is prevalent and rife on many forum of learning.

    Overall 4/5. If i manage to make some money off these ideas i will upgrade to a 5.

    peace.

  32. Yuvi

    Awesm work Vlatko..
    This website is one of a kind nd i must say you have done a great work for all intellactualy hungry out there

  33. Anca

    Extraordinary! Thought-provoking, essential things for each and every one of us! Thank you!

  34. noname

    Thank you Vlatko, but final Chimaerica?chapter is still missing.

    1. Vlatko

      Fixed that. Cheers.

  35. AndyClimax

    Hey Vlatco,

    Great doco, loved it... but still itching for the incomplete last episode to be uploaded... I've been waiting for months. Let us know when you upload it or if we can view it somewhere else.

    By the way, great site... don't mind wasting hours of my life here at all! =]

    Cheers, AndyClimax

  36. js

    awesome documantary.
    thank you vlatko. it would take me ages with all my work to find so many documantaries on the net and download them.

  37. fillip 0

    Facinating.

    Big gratitude to Niall for such a good grounding in economic history.

    It does go at some pace so I needed to pause it a number of times and look things up, but am pleased I put the time in to do it.

    I'm currently investing in tinned food with far off use by dates.

  38. Shelly

    Vlatko you are awesome! I love this site is my favorite already..

  39. bvaust

    The final chapter is incomplete.. plse update so we can see ending

    1. Vlatko

      Done that. I think now it's OK.

  40. Vlatko

    I'll try to fix that ASAP.

  41. Robin Morrison

    Yes...I agree with Guybrush...what happened to the rest of the documentary???

  42. Guybrush

    This documentary is incomplete, the last part does not finish and cuts off half way through

  43. Reggie

    I paid some $25 dollars for this book. THis book/documentary is more about the evolution of modern high finance coupled with interesting tidbits of history. I was looking for an explanation of empire building. such as taxes to the crown, tolls, trade routes, how money worked in the colonies, how Europeans "forced" free trade. Etc, Neil claimed a study of finance is a study of history in general, But this is not what he does iin either the book or this doc.

  44. Jonathan R

    Very interesting film - More people need this kind of financial eduction