The Ascent of Money: A Financial History of the World

Chapter 1 tells the story of the rise of money and money-lending, along with the history of the banking system. Ferguson begins by asking the reader to “[i]magine a world with no money,” presenting such a scenario as the reality for primitive peoples of the past and as the dreams of communists (17). He says that even communist societies, however, rely on money.

“The Money Mountain”

Ferguson begins with a tale about money during the Age of Exploration. In the 16th century, the Inca Empire in present-day Peru was both moneyless and the most advanced society in South America. A Spanish force under Francisco Pizarro crossed the Atlantic seeking fortune in the form of gold and silver. The Incas had considerable quantities of both metals, which they did not use for money but for other purposes, including decoration. After two years of fighting, the Spanish obtained their objective in 1532, taking tens of thousands of pounds of gold and silver. Pizarro himself died in 1541, but the Spanish conquistadors (“conquerors”) remained, and when a mountain full of silver ore was found in 1545, they extracted all they could using the forced labor of the Incans. The silver mined from Cerro Rico (Spanish for “the rich hill”) was formed into bars and coins before being shipped back to Spain.