Friday, 15 May 2009

Ascent and Exchange: reviewing two books

My review of two books - The Ascent of Money and A Splendid Exchange - is up at Culture Wars today - Ascent and Exchange.

Do go and read it on Culture Wars, but I'll post the text here as well after the weekend. A couple of excerpts:

When they set out to write these texts, neither author must have expected to create an especially political book. But for the first time in decades, opinions about the detailed management of the economy are intensely political, and any book, article or quotation on financial matters in the last few years is likely to be re-read in that light.

Bernstein’s other argument is a little more controversial, and therefore more interesting. He portrays nearly every major development in world history as the result of trade, competition over trade profits, or protection against trade. Early chapters cover the expansion of Islam across the Middle East, North Africa and South Asia; the middle of the book explores European exploration and colonisation of key locations in the Pacific and the New World; and the last third explains the rise and fall in turn of Portugal, Spain, the Netherlands, Britain and America as dominant world powers. At times the idea is stretched – was protectionism really a major contribution to the outbreak of World War II? – but in general it is well argued and sheds much light on how the world turned out as it is.

The Ascent of Money on the other hand has no such argument. It is a survey of six different aspects of money, conveniently scaled to fit into six one-hour episodes on Channel Four. The chapters – on the invention of money, bonds, bubbles, risk, property, and ‘Chimerica’ – contain some interesting ideas, and there’s more enquiry into the nature and philosophy of money than Splendid Exchange makes into the ideas behind trade. But the book is still unsatisfying, and it is hard to see any thread consistently running through the chapters.

The best segments of both books are between about 1400 and 1800, where Bernstein tells stories of exploration, misunderstanding and chance, and of the grand contest between the English and Dutch East India Companies (and by proxy, Britain and Holland); and Ferguson shows us that bond and derivatives profiteering and stockmarket bubbles are nothing new. Each book less evocative in the further past, with Ferguson showing some pictures of 3000-year-old money in clay tablet form, and Bernstein providing a thousand years of detail about ports and sultanates in the Middle East which no longer exist and have little relevance to the ongoing argument.

Strangely, the book that’s about the stuff of all our lives – how often do you live a day without money? – feels less relevant and meaningful than the book about something we only come into occasional contact with, international trade. There is a book waiting to be written about how we psychologically interact with money and what it means to us when it’s in our pocket or leaving our wallet. Maybe that will be informed by history too, but The Ascent of Money isn’t it. A Splendid Exchange, on the other hand, makes real and immediate the effects and benefits of the movements of containers that most of us never see and goods whose origin we rarely notice. The arc of the story of the rise of trade over five thousand years is well drawn.

If you only have time to read one...

I'm afraid you'll have to go and read the review to find out which one it should be.

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