Review: Niall Ferguson’s ‘The House of Rothschild: Money’s Prophets’ Volume 1

One of the pleasures of travelling that I find is that it allows me some time to lose myself in a book. Normally I find reading somewhat difficult to do in the living room, bed room or somewhere stationary and I get most reading (for pleasure I hasten to add) done on the tube, bus or when flying.

As many who come to this blog or have seen on others that I frequent know, I am very much interested in economics, particularly the history of its development into a subject area that now appears to take centre stage in everything we do in ways it never used to. My interest has been with me know for about 10 years, though since the Global Financial Crisis (GFC) has come about, along with many others my interest has only grown as something is clearly rotten with the system we appear to be propping up at the moment.

With that in mind, I have made a point of following Niall Ferguson‘s series that appeared on Channel 4 in the UK, PBS in the States called ‘The Ascent of Money‘ which gave a blow by blow account of the development of the financial system, how certain crises have come about and why certain financial instruments that we take for granted today came into being. The series is fascinating viewing, easy to understand and the book that accompanies the series was the first of Ferguson’s work that I have read. Much like his tone and pace on the small screen, his prose is also easy to follow yet is incredibly detailed and attention grabbing.

This lead me to read his book ‘The World at War‘ which highlighted how the 20th century is one of the bloodiest, if not the bloodiest century in the history of man. Again, a hugely enjoyable read (if such a subject matter can be enjoyable in normal sense of the word) and also hugely informative.

Which brings me on to the main thrust of this piece, the third of Ferguson’s books I have read, ‘The House of Rothschild: Money’s Prophets (1798 – 1848)‘. The book is the first of two dealing with the Rothschild family, a German Jewish banking dynasty that started out in the Frankfurt ghetto and due to the industriousness of the pater familias, Mayer Amschel, together with his five sons based in the primary finance centres in Europe, they were able to create what amounted to the first truly multi-national merchant and investment bank.

The book itself is incredibly detailed and Ferguson should be commended for the the great time, effort and study he employed in bringing together what I found to be an amazingly interesting book. Ferguson was granted access to the English branch of the family’s archives (that what remained) including correspondence between the brothers. This correspondence was often of an incredibly sensitive nature and if it were to fall into the wrong hands would place the brothers at a distinct disadvantage, therefore the brothers wrote to each other in code but far worse, in Juden Deutsche, essentially German using Hebrew script, making it near impenetrable to most and for the writer something of a hurdle to overcome when translating!

The book and the research carried out allows us to see the many forces that drove on each of the five brothers, the challenges they faced in different jurisdictions (primarily due to them fulfilling an anti-Semitic stereotype of being wealthy financiers as well as existing rules, laws and regulations constraining the freedom of Jews throughout Europe) and laying to rest many of the historical inaccuracies, myths and legends that surround the family and how it acquired its wealth whether it is the making of ‘dirty money’ from the outcome of the Battle of Waterloo, knowing it’s result before the general public did (this venture nearly bankrupted the family in its entirety), supporting a whole host of reactionary forces throughout 19th century Europe against the forces of democracy and revolution (they didn’t much care which regime was in charge of where, so long as they didn’t lose out with their existing investments) or even that the French railways that they helped finance, build and in some cases part own where deliberately shoddy and thus employed to kill many (a ludicrous assumption, these ventures at becoming an industrialist cost James a lot of money, where roundly condemned by the London branch and the branch of de Rothschild Freres nearly went into liquidation at one stage) are all gone over and laid to rest as either jealousy on the part of banking rivals, anti-Semitic black propaganda or on the odd occasion a fabrication on the part of the brothers themselves to make them appear to have more power than what they actually had.

The brothers acquired their wealth and power primarily through the sale and purchase of government bonds which helped the finance of grand public works through out the industrial revolution as they were located in each of the main European finance centres, thus enabling the creation of a cross border market for bonds, something otherwise hitherto unknown or dreamt of before.

The House of Rothschild became the first de facto multi-national merchant and investment bank and as such, they were able to become probably the wealthiest family in Europe in the 19th century. And in a time when being Jewish would have been a hindrance in business and personal freedom, when many established Jewish families thought it better to convert to Christianity, they stayed ever faithful to their religion and its followers throughout all of Europe and beyond.

It is amazing to read about what can only be described as a noveau riche family, one that was hated and ridiculed by many in the aristocracy and beyond, become the toast of the town owing to the fact that they bankrolled many in the upper echelons of society, yet the first generation of brothers seemed not too effected or to be slavish to the comforts they could now afford but more determined to increase their stranglehold on the European finance business.

The book is a tremendous read and an example of a very well researched piece of historical work that I believe is easily accessible to the general public, whether they have a limited knowledge of finance or of events in the 19th century. I will be reading the second volume in the coming weeks, however, if you would recommend anything else in the meantime please let me know by dropping a comment in below.


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