The Ascent of Money
While reading The Ascent of Money I learned that throughout the history of Western civilization, there has been a recurrent resentment to finance and financiers. The resentment is created from the idea that those who make their living lending money are somehow freeloading on the “real” economic activities of agriculture and manufacturing. The resentment to finance and financiers has the following three causes:
Debtors have tended to outnumber creditors and the former have seldom felt very well disposed towards the latter.
Financial crises and scandals occur frequently enough to make finance appear to be a cause of poverty rather than prosperity, volatility rather than stability.
For Centuries, financial services in countries all over the world were disproportionately provided by members of ethnic or religious minorities, who had been excluded from land ownership or public office but enjoyed success in finance because of their own tight-knit networks of kinship and trust.
Over the last decade you still see these types of issues in finance that continue to leave a bad taste in people’s mouths. Scandals such as; WorldCom, which created billions in illusionary earnings and then filed for bankruptcy in 2002, or Enron using mark to market accounting techniques and creating special purposes entities, and the latest was Bernie Madoff’s Ponzi scheme.
I am left wondering what the purpose of this book actually was, and who the intended audience is for. Is it a financial history of the world or it book to financiers about catastrophic events that occurred in the past, and will like to reoccur in the future? He gives very great examples of John Law and his boom to bust. How they claim he was the world’s ultimate inside trader. John Law was responsible for the Mississippi Company bubble, where he exaggerated the wealth of Louisiana with an effective marketing scheme, which led to speculation of shares in the