The Cash Nexus

by Niall Ferguson

What's it about?

You may have watched The Ascent of Money, presented by Niall Ferguson on the Beeb recently.  He is the author of a number of works, including The Cash Nexus, which is a history of money, and its effects on global power.  His central thesis is that financial innovation has been inextricably linked to war and states' lust for power. It is an interesting and extremely readable book - if a little long.

Most relevant idea to current times

Ferguson attributes Britain's rise to power over France and Spain in the 17th and 18th centuries to the fact that Britain never defaulted on its sovereign debt, so interest rates were lower, allowing industrialisation.  From this, amongst other things, he concludes that a high public debt can be sustained, if interest rates are low.  In these current times, perhaps we can take comfort from this, provided that excessive devaluation of the currency does not require increased rates to be payable to foreign bond holders.