Product Details

• Amazon Sales Rank: #52280 in Books
• Published on: 2001-09-26
• Original language: English
• Number of items: 1
• Binding: Paperback
• 448 pages

Amazon.co.uk Review
Any business book with a testimonial on its cover from one Paul Volcker deserves at least a second glance. Not that the former chairman of the US Federal Reserve says much ("The story of gold--in all its splendour and mythology") but it's better than a poke in the eye with a sharp stick. Still, gold is a fascinating subject and one that most of us would probably agree we'd like to see a bit more of. They did in ancient times, according to Peter Bernstein. It was more plentiful then, and its use was "for adornment and decoration and not for coinage or hoarding". This is underlined by a swift retelling of Moses' descent from Mount Sinai with the newly minted Ten Commandments to find a golden calf being worshipped. Even as slaves, the chosen people had ample amounts of gold on their person. "It never occurred to them to use their gold to bribe their way out of captivity in Egypt, they would have found few takers." O tempora, o mores, one might think. From Moses in the desert to Montagu Norman at the Bank of England. From Kubla Khan to Maynard Keynes, The Power of Gold describes itself as the history of an obsession. There's more to it than that. Peter Bernstein's sequel to Against the Gods, The Remarkable Story of Risk is a highly readable potted history of modern mankind, told through the development of money and modern economics. --Brian Bollen

The Independent - Friday Book, 20th October 2000
"...readers with an interest in history or finance will welcome Bernstein's interesting history of gold and money in the West."

The Economist, October 14-20th, 2000 Edition
Mr. Bernstein's sympathies lie rather with John Maynard Keynes, who famously denounced gold as the "barbarous relic", and with Benjamin Disraeli, who once declared that the "gold standard is not the cause, but the consequence of our commercial prosperity." Mr. Bernstein cites this comment more than once. But is it true? Could the credit and trade of the British empire have been established on any other monetary standard? The answer is probably not. Once gold protected people against the depredations of tyrants. However, the age of democracy has legitimised flat currencies. This explains why John Law failed to impose a paper currency in France in the early 18th century (this key moment in the history of gold is strangely overlooked by Mr. Bernstein). By the 20th century, gold had become an anachronism, as Keynes correctly recognised. It took others longer to release themselves intellectually from their "golden fetters". The populace of Britain suffered for this in the 1920s, as did the Americans in the early years of the 1930s depression. Today gold is simply an adornment. Long may it remain so.

Customer Reviews

Gold as a Barbaric Relic of Greed or Adornment
Mr. Bernstein skeptically sees gold as overrated and as potentially harmful. Think of this book as "The Tragedy of Obsession with Gold" as the story line. As Mr. Bernstein puts it, "This book tells the story of how people have become intoxicated, obsessed, haunted, and humbled over pieces of metal called gold."

To make that point, the book begins with a story that Ruskin told about a man who is on a sinking ship with his gold. He gets the gold and jumps overboard, and drowns from the weight of the gold. Mr. Bernstein cites the analogy throughout the book for the fate that awaits those who are committed to their gold. The gold has them, rather than vice versa.

Mr. Bernstein does a nice job of creating an on-going story line to put the role of gold in perspective. Gold first makes its appearance as an adornment for religious or personal purposes. This application leads to gold becoming used as money. Then gold helps create trade that only money can provide. From the trade comes power, and that power expands influence. Then as the world economy outgrows the supply of gold as a monetary stock, gold becomes a brake on economic growth. At the end of the book, gold is again turning into an adornment having been cut loose from being a reserve for the monetary stock. In this context, the book is about the rise and fall of the gold-based empire. That tale is best captured in the story of how little the gold from the Americas helped Spain economically. If a shortage of gold as money can slow down economic growth, an excess of gold can create inflation in general prices. That's the essence of Mr. Bernstein's argument about gold as a mercantile asset.

Economic history is rarely so interestingly told, and Mr. Bernstein deserves a lot of credit for taking something that could have been dull and making it lively. He is an excellent story teller, and you will find what he has to say contains many new and interesting points.

I was fascinated by the number of times that the fate of countries was affected by gold. Ransoms paid in gold for French Kings beggered that country on more than one occasion. The failure of worldwide wheat crops allowed the U.S. economic expansion to continue after the Civil War, as the U.S. was threatened with a shortage of gold needed for industrial goods. The Byzantine Empire lived on much longer than it would otherwise have by being able to buy defenders with gold. The Arab expansion was aided by access to gold. After World War I, the gold standard contributed to the Depression.

Mr. Bernstein leaves us out on a limb about where our system of floating rate currencies will end. Without some form of global currency, we should see rapid distortions in economic results whenever such shifts in currency values occur. We are in the middle of one of those shifts right now between the dollar and the euro. Certainly, the universal government preference to debase the value of currencies will continue to plague us. Mr. Bernstein leaves us with no answer to the problem, except to be certain that returning to the strait-jacket of the gold standard is not it. I wonder if it is really that simple, or if we are facing a severe future disruption that will make gold look good by comparison. Certainly, a world currency seems inevitable, whatever its nature is.

Realizing that gold can be harmful, does it seem any less beautiful to you? I found that my aesthetic preference for gold was unaffected by reading this book. I think you can appreciate gold without being greedy for it. Perhaps that's the lesson here.

After you have finished enjoying this fun book, think about where else overreliance on something or some idea can be harmful. My favorite example is the desire to be popular. Most people will do foolish and harmful things that debase quality (much as they did with gold coins) to achieve popularity. One of my favorite examples is in a recent book where a CEO went on CNBC almost naked as a publicity stunt for his company's latest advertising campaign.

Enjoy all things in proper perspective and moderation!

A popular history of glitter
"Unlike any other element on earth, almost all the gold ever mined is still around... If you piled all this gold in one solid cube, you could fit it aboard any of today's great oil tankers; its total weight would amount to approximately 125,000 tons ..."

So writes Peter Bernstein in the prologue of THE POWER OF GOLD. This volume is a highly readable history of the element Au from the reign of King Midas to the present, and from gold's status as a commodity, as money, as a monetary standard, and back to commodity again. To the hardboiled bean counter, Bernstein's work might seem superficial. Well, since I never claim to be a deep thinker, and am relatively indifferent to the state of the world economy and the pretentious pronouncements about it made by financial experts on the morning talk show circuit, it proved to be an entertaining and educational read.

The author guides us down the Golden Brick Road from the times of the ancient Greeks, Egyptians, and Chinese, to Rome and Byzantium, further along to the Black Death-ravaged Middle Ages, on to the empires of the English and Spanish, and finally to the recently-past obsessions of the British, American and French governments. And, while THE POWER OF GOLD describes the element in all its guises - adornment, coinage, spoil of war, power display, horde in a sock - the book is, above all, a fine treatise on economics.

My only quarrel with Bernstein is that he sometimes rambles off on tangents not really germane to the topic. It's enough to know that Spain plundered the gold from the Inca Empire, transporting it back to Europe on its treasure galleons. The author's account of Francisco Pizarro's treacherous capture and murder of the Inca king was nice background, but not essential. Similarly, it's enough to know that the 19th century gold strikes in California, Alaska, Russia, South Africa and Australia destabilized the world's supply of the metal, but I didn't require Johann Sutter's sob story to appreciate the fact. Thankfully, Bernstein gave no background on President Richard Nixon, whose momentous 1971 decision to remove the U.S. $ from the gold standard seems forgotten in the glare of his China policy and Watergate.

As I sit contemplating my few British sovereigns and South African krugerrands losing value in my tiny safe deposit box, I think perhaps Prime Minister Disraeli was quite correct when he said, "Our gold standard is not the cause, but the consequence of our commercial prosperity." The wealth of a nation is perhaps better judged by its (non-gold) natural resources, and the productivity of its citizens in putting those fortuitous gifts to good use.

An Informative and Enlightening Read
Recently, I have noticed a decline in the value of the dollar in the market and great increase of gold. Even the gold went over one thousand dollar at one point. Then, I came to thinking: what if we might be heading to some kind of economy collapse in our near future where our dollars in the banks will disappear overnight and we will be left penniless and head into a great debt without much a warning. Then, it would be likely that gold and silver might return to being as values/standards of money for survival purposes in the event of economy collapse. At least, that is my understanding of using gold.

Before this year, I rarely take notice of gold and often thought of it as just piece of metal. And, I often wondered why gold would be such a big deal or why would gold became a driving motivation behind every nation's growth. Again, I thought, "they are pieces of metals, nothing more...geez, it sounds like everyone is obsessed with such illusion. Why do we even bother?" Then, I was recommended to this book by Peter Bernstein.

"The Power of Gold: The History of Obsession" is very intriguing and easy to read, with only twenty chapters and roughly four hundred pages. It is certainly a book that I could not put down because it answered some of my questions on the subject, or at least to my understanding. I really liked reading about the histories of gold from the ancient times to present, including the stories of Lydian and Greek as well of Johann Sutter in the time of California gold rush. Also, it was interesting to acquire an understanding about the attitude of the people towards gold in the aftermath of The Black Death during the mid-fourteenth century.

I most certainly agreed with the author when he said the following:
"Those who believed that gold was a hedge against the uncertainties of life failed to understand that the pursuit of eternity is not to be satisfied by gold, or by anything else we choose to replace gold - dollars, euros, whatever. Gold and its surrogates make sense only as a means to an end: to beautify, to adorn, to exchange for what we need and really want." (p. 372)

After reading this book, I have gained a better understanding about gold itself: how it was viewed, how it was and is being used, and why were/are people obsessed with gold. Gold may be a piece of metal, but it seems to serve mult-purposes.

I am no economist or trader, but I found this book to be an enlightening read and very informative about the gold's nature, its history, and its relationship with humanity.