The Ascent of Money

A couple of hours ago I did something amazing: bought lunch. I walked about a kilometre down the road, straight into my favourite Thai restaurant, and got myself some fried rice. Now, you’re probably questioning my sanity, or at the very least pondering how amazing my story is. But it is amazing. In exchange for a colourful piece of paper, the wonderful lady behind the counter put down her newspaper, and through a mixture of skill and fresh ingredients made me a tasty meal. How did it get that way? Why does a piece of paper imbue sufficient power to drive human action? This, my friend, is the story of money. It’s the story of innovation. And it’s an incredibly fascinating story.

 

“Credit and debt, in short, are among the essential building blocks of economic development, as vital to creating the wealth of nations as mining, manufacturing or mobile telephony.”

 

Where to begin? Written on the cusp of the Global Financial Crisis, Niall Ferguson starts his tale with a rumination on what exactly money is — silver, paper, pixels on a screen. The root of all evil, the cause of our discontent, and the key to our success. Money is and has been all of these things. But these are not what make money, well, money. Money is a unit of exchange, a unit of account and a store of value. These are the real essences of money, not the whiff of Gold or the declaration of a sovereign. And it’s the story of money’s transformation through all of these stages, to hit all these targets, that makes up the bulk of the pages.

 

“From ancient Mesopotamia to present-day China, in short, the ascent of money has been one of the driving forces behind human progress: a complex process of innovation, intermediation and integration that has been as vital as the advance of science or the spread of law in mankind’s escape from the drudgery of subsistence agriculture and the misery of the Malthusian trap.”

 

The most interesting component of the book, however, are the ancillary tales of these great leaps. The clay tablets from 2000BC Mesopotamia, which turn out to be a form tradable debt — thousands of years before the first bond markets. The Spanish looting of an Incan civilisation thoroughly unaware silver’s status in the West, and the long term affects on Spanish Competitiveness. The rise of the Stockmarket in Amsterdam, which fuelled the long arm of the East India Companies. The spread of the “Cotton Bond” allowing the American South to stick around in a war with the North. The Scottish Clergymen who started an Insurance fund that invested the proceeds and paid the widowers and children of clergy out of the profits. And, finally, collateralised debt obligations, sub prime mortgages and the Global Financial Crisis.

 

“When we withdraw banknotes from automated telling machines, or invest portions of our monthly salaries in bonds and stocks, or insure our cars, or remortgage our homes, or renounce home bias in favour of emerging markets, we are entering into transactions with many historical antecedents.”

 

It’s with that last point that Ferguson really strikes home. The final parts of the book deal with the complexity of the modern financial system, and how it unravelled in the period leading up to publication. For while all these great innovations have built the world we now inhabit, they have also created one so complex that many simply give up. But we can’t. Giving up is what allows the likes of sub-prime loans to promulgate, and myriad mistakes be remade. Ferguson’s book is a partial answer to that. It’s nowhere near the silver bullet — for more sophisticated readers, there is much to be desired (Adam Smith seems to be particularly glossed over, for example), but it’s a great overview. And Ferguson’s passion for anecdote makes it particularly enjoyable. Three out of five.

Muhammad

Growing up in a family with a large number of Muslims, I first heard the story of Muhammad when I was very young. I would hear of Muhammad’s return to Mecca, his clearing the Kabah of pagan idols, and his fight for social justice and the empowerment of Women. It’s a version of Muhammad I can understand. It fits my family.

“The history of a religious tradition is a continuous dialogue between a transcendent reality and current events in the mundane sphere.”

But this image has become muddled. It’s clear that there are many visions of who Muhammad was and what he means. Much of my life has taken place against the backdrop of a cosmic war — planes flying into buildings, invasions, car bombs and police raids. And Muhammad has been invoked, repeatedly, by all sides. Used to justify all manner of atrocities. This tension has become especially meaningful in the past few months, as gunmen attempt to police his image on our own doorsteps.

“We have a long history of Islamophobia in Western culture that dates back to the time of the Crusades. In the twelfth century, Christian monks in Europe insisted that Islam was a violent religion of the sword, and that Muhammad was a charlatan who imposed his religion on a reluctant world by force of arms; they called him a lecher and asexual pervert.”

So, who was Muhammad? The benevolent and merciful figure that I’ve grown up with? The man who inspires the billion plus Muslims who go about their days peaceably, who we never hear from? Or was he the great Muslim crusader that the Islamic Fundamentalists tout? How about the bloodthirsty tyrant that many of his obstreperous critics claim? As the cosmic war of the past decade is joined by a culture war, increasingly on our own doorsteps, this is a question that needs answering. And so, I turned to Karen Armstrong.

“The work of Muhammad’s first biographers would probably not satisfy a modern historian. They were men of their time and often included stories of a miraculous and legendary nature that we would interpret differently today.”

Muhammad has had many biographers, the first emerging a hundred or so years after his death. However, like many other religious figures, the bulk of our knowledge comes from the scriptures, which in turn rely on an oral history. Armstrong begins the story with Muhammad’s first revelation, when he was forty years old. But she quickly backtracks and takes us through the religious, cultural and economic context of Muhammad’s time. Aspects of his life that are inseparable from his teachings and legacy, but are rarely mentioned now. We learn about his birth into the Hashim clan in Mecca, an important clan in a powerful city. His marriage to Khadijah in his twenties Khadijah was employer and a rich widow with whom he would remain monogamous (not the norm) until her death. And as the short 200-odd pages go by, we follow the slow creation of Islam, the Muslim exile to Medina and their struggle to return. All set in the context of the wider Arabian world that both influenced and was influenced by them.

“Muhammad literally sweated with the effort to bring peace to war-torn Arabia, and we need people who are prepared to do this today. His life was a tireless campaign against greed, injustice, and arrogance. He realised that Arabia was a turning point and that the old way of thinking would no longer suffice, so he wore himself out in the creative effort to evolve an entirely new solution.”

This focus on context is brilliant. After all, Muhammad’s tale is like many other stories from pre-modernity – awful when the context is removed. However, there are also weaknesses with Armstrong’s account. The most obvious is that it is entirely uncritical. Apart from a brief mention at the beginning, there is scarce reference to the fact that the entire story is built upon an oral history of Muhammad’s followers. And yet, it is also written with absolute certainty. There are no questions given to the possibility of bad memory, an incomplete historical record, or alteration through retelling. This problem is especially clear when Armstrong repeatedly asserts Muhammad’s reputation for honesty and grace – it may be so, but his followers would say that wouldn’t they? And since the scriptures are God’s revelations channeled through Muhammad, from where does this survey of his contemporaries emanate? Even worse, such hagiographic characterisations are often accompanied by literary flourishes and insights into the Prophet’s own mind – what are the sources for these intrusions? I would greatly love to read the tome in which his every sigh and facial expression are also recorded.

“The Qur’an is the holy word of God, and it’s authority remains absolute. But Muslims know that it is not always easy to interpret. Its laws were designed for a small community…”

For those who don’t mind a critical account, there is another big issue – the question of Muhammad’s agency. The context-centric approach means that most of the events are portrayed as a reaction to external cultural and political events. For example; the rival Quraysh clan does something, and suddenly Muhammad is gifted the perfect revelation and strategy. What comes off is both a God and Prophet in thrall to outside events, responding to the world rather than shaping it. Armstrong repeatedly asserts Muhammad’s disdain for metaphysics, but should we come away with such an emphasis on politics? A cynical reading could conclude that Muhammad doesn’t have agency, and that many of these revelations are quite convenient. Is that the intention? If so, who exactly is the target audience of this account?

“If we are to avoid catastrophe, the Muslim and Western worlds must learn not merely to tolerate but to appreciate one another. A good place to start is with the figure of Muhammad: a complex man, who resists facile, ideologically-driven categorisation, who sometimes did things that were difficult or impossible for us to accept, but who had profound genius and founded a religion and cultural tradition that was not based on the sword but whose name — “Islam” — signified peace and reconciliation.”

To answer my conundrum from earlier, Armstrong paints a picture of Muhammad quite close to the one I was brought up with. Only much richer than my family could ever manage. He wasn’t the man claimed by the fundamentalists on either side, but a man of his time. The context she provides is eye opening, and definitely an important addition to our current debate. But Armstrong’s lack of criticism is really the takeaway. It invalidates it for anyone who wants as “true” a picture as possible. Granted, in our current climate it is understandable why Armstrong could not do for Muhammad what Reza Aslan did for Jesus, but Muhammad already has enough hagiographies. Muhammad by Karen Armstrong is the best biography I have found so far. So, for now at least, I will recommended it. But I’m going to keep looking for a more definitive biography.

 

Title: Muhammad – Prophet For Our Time

Author: Karen Armstrong

Pages: 249 (Paperback)

Josh’s Rating: 2/5

Amazon Link: Muhammad – Prophet For Our Time

The Accidental Billionares

Facebook has become all-pervasive. It screams at me from the laptops of my fellow classmates, tracks me as I traverse the interwebs, draws visitors to my blog and radio show, and invades the real world through my vibrating phone. The draw of its network and the push of it’s firehose has become inexorably linked with the internet itself. However, like many, I ache to escape its grasp. I have all but shut down my profile, installed blockers on everything but my cat, and rarely log on. But perhaps what I want more is to figure it out. And so I found myself opening ‘The Accidental Billionaires’ by Ben Mezrich. You might know it as the basis of ‘The Social Network,’ which was a surprisingly faithful and brilliant adaptation. It is one of the most entertaining business book I have ever read. That isn’t a compliment.

“Nonfictionish” is how I have seen it described in a couple of places. And, really, I can think of no better descriptor. The Accidental Billionaires is a business book written like a novel. Or, as Mezrich put’s it in the introduction; “a dramatic, narrative account based on dozens of interviews, hundreds of sources, and thousands of pages of documents…”. Now, having read that, I was expecting something along the lines of a Michael Lewis or Malcolm Gladwell tale — a high concept told narratively to keep us plebs interested. Unfortunately Mezrich does not seem to have the deft touch of Lewis or Gladwell, as it’s the drama that wins out over everything else.

From the start, the booze-fueled parties, super-speculative points of view, and bizarre literary flourishes build mountains of melodrama and scant understanding. I really am unsure what insights should be gleamed from Mark Zuckerberg lost in his reflection in a computer screen, Eduardo Saverin – our hapless foil — wondering if he ever really knew Zuckerberg, or the virtuous Winklevoss twins fighting for justice in an otherwise cruel campus. The tension between Zuckerberg, Saverin and the Winklevi does well to build tension throughout, but the space needed detracts from everything else. The real meat of Facebook’s genesis and rise is lost amid the kind of superficial account you’d get from a blowhard at a party. I went in wanting to learn about Facebook, but I’ve come out not quite sure if I learned anything at all. Really, upon reflection it seems like Aaron Sorkin may have toned the book down a bit. I don’t remember the movie being as soapy.

Perhaps this is a Facebook book for a Facebook world. Screaming for attention by airing what was once hidden — the sex, drugs and lawsuits. Hiding the message under layers of drama so we don’t even know we’ve learned something — like putting your pet’s medicine in a treat. If all you want is a passing understanding of Facebook, maybe this is the book for you. The Facebook story is in there, superficially at least. But if you want to know more, about it’s conquering of college campuses and burst into the mainstream, about its rise into a genuine business and global powerhouse. If you are looking for lessons, if you want to understand what drives the pokes, look elsewhere. Two stars.

Title: The Accidental Billionaires

Author: Ben Mezrich

Pages: 272 (Paperback)

Josh’s Rating: 2/5

Amazon Link: The Accidental Billionaires

Isaac Newton

Like a lot of people, I was absolutely entranced by this year’s remake of Carl Sagan’s Cosmos. It wasn’t just the stunning visuals and mind-blowing science, it was the stories of the people who have carried us this far. The giants upon whose shoulders we now stand. Michael Faraday, William Herschel, Joseph von Fraunhofer, Cecilia Payne, Edmond Halley, and, of course, Isaac Newton (to name a few). Cosmos made them all come alive, and gave me a thirst to know more about them. Unfortunately, it doesn’t seem like the series will be continued. So, for anyone like me, its time to hit the books. Let’s begin with the man who laid the foundation of the modern world – Isaac Newton.

“He was born into a world of darkness, obscurity, and magic; led a strangely pure and obsessive life, lacking parents, lovers, and friends; quarrelled bitterly with great men who crossed his path; veered at least once to the brink of madness; cloaked his work in secrecy; and yet discovered more of the essential core of human knowledge than anyone before or after.”

Isaac Newton is a peculiar figure. Anyone who has received any semblance of a liberal education can probably name him and some of his achievements. You may even be able to recall his pointed nose and luscious hair. But what do we know beyond that? Where was he born? How did he work? What drove him? This is where James Gleick steps in. Many of you may know of Gleick. He’s a prominent science writer, with several other great books out there (a review of The Information is forthcoming). But the deftness with which he brings science to the less erudite is really on show with this biography. It’s not a long book, more of a Newton summary really, but it hits the high points. It begins with a visit to Woolsthorpe – where Newton was born, works through his education and scientific awakening, and finishes with Newton’s legacy. That last subject being something that could fill whole libraries.

“What Newton learned remains the essence of what we know, as if by our own intuition”

For a small book — my edition comes in at under two hundred pages — there is an incredible amount to be gleaned about the life of Isaac Newton. How many of us really consider Isaac Newton the ostensible orphan? When school children learn about his theories in science textbooks, do we realise how hard up the young Newton was for simple paper and pens, let alone textbooks? When we imagine him sitting under the Apple tree (surely a myth), do we conjure the ways the young Newton really did turn the natural world into a veritable laboratory? How many of us imagine a man famous for calculating his way through the mysterious of the cosmos, also filling notebooks with the ingredients for paint, the Bible’s hidden codes, and lists of thousands of nouns in different languages (etc.)? His forays into alchemy and other scorned fields are legendary, but did you know Newton had to be goaded into publishing his legitimate work? Even his famous Principia? Textbooks and popular imagination give us an image of Newton as a robot genius. But Gleick reveals him to be so much more. An irascible yet modest man, whose insatiable thirst for knowledge changed the world.

“It was nature’s destiny now to be mathematised. Henceforth space would have dimension and measure; the moon would be subject to geometry.”

Newton’s life is fascinating, and, as all good biographers do, Gleick has revealed his subject to be much more than our cartoonish popular conception. The book is well written, really, I demolished it in a day. But it’s arguable how much this is due to it’s readability as to it’s length. And it’s the length that gets me. Gleick really, manages little more than pulling back the curtain on a giant of the modern age. And when you consider how much context he must provide — on the age of Enlightenment, the wars with Hooke and Leibniz over no less than Gravity and Calculus (etc.) — it’s no wonder we emerge on the other end having barely touched his personality or character. Newton was a revolutionary, his shadow still falls over science, economics, mathematics, philosophy, theology, and much, much more. As a short dip into his life and works, Gleick’s book is more than sufficient. As a study of one of the most influential men in history, it leaves a lot to be desired.

“No one feels the burden of Newton’s legacy, looming forward from the past, more than the modern scientist. A worry nags at his descendants: that Newton may have been too successful; that the power of his methods gave them too much authority.”

Title: Isaac Newton

Author: James Gleick

Pages: 191 (Paperback)

Josh’s Rating: 3/5

Amazon Link: Isaac Newton

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