Sunday, February 15, 2009

The Ascent of Money

Professor 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 civilisation.

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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Anonymous said...

If Niall Ferguson had questions about economic hit men, he should have consulted John Perkins, the guy who wrote Confessions of an Economic Hit Man. He admits that assassinations did occur, not due to interest on loans but because the leaders would be forced to give the U.S. special deals and access to resources.

Anonymous said...

An interesting series. It spelled out a lot about the world of finance that I had previously not understood. Pretty scary these "booms" and "busts", especially when viewed through the lenses of human desperation. Let's hope rationalism can one day overcome the "herd" mentality and restore some kind of sense, not only to the fidgety world of finance, but also to our personal existence on this fragile world.

Anonymous said...

This is AWSOME!
I love it. It make sense of EVERYTHING. I feel like the people on TV and finical experts should watch this, especially all people who are in the markets. If we are watch his, the bubbles would not get so big.