In his delightful memoirs, the art historian Kenneth Clark recalls that Lord Cunliffe, governor of the Bank of England, came to lunch with his father on August 2, 1914. “There’s talk of a war,” said Lord Cunliffe, “but it will never happen; the Germans haven’t got the credits.” Almost a century earlier Gutle Rothschild, widow of Mayer Amschel Rothschild, is supposed to have said of a dispute between England and Prussia, “It won’t come to war; my sons won’t provide money for it.” Niall Ferguson’s extraordinary book is both a history of the world’s most powerful banking dynasty and an attempt to understand the role of high finance in an international system about which such statements could be made and be believed.
In the nineteenth century the power and wealth of the Rothschilds fascinated their contemporaries, not least because their trans-European business remained a family firm. An American observer of the 1830s portrayed the five sons of Mayer Amschel as “peering above kings, rising higher than emperors, and holding a whole continent in the hollow of their hands…. Not a cabinet moves without their advice…. Baron Rothschild…holds the keys of peace or war.” When Amschel’s son James de Rothschild died in 1868, he was reported to have left a personal fortune which came to just over 4 percent of France’s GDP. (Today the equivalent fraction would make it about $50 billion.) Ferguson’s own calculations yield a significantly lower figure.
Unaccountable power always breeds resentment, especially when it is money power. The Rothschilds were demonized in Europe in much the same way as J.P. Morgan was in the United States—only more so, because they were Jewish. The myth of their omnipotence, in which they themselves sometimes believed, bred a virulent anti-Semitism, which fastened onto a uniquely visible Jewish family. To conservatives the Rothschilds were a standing threat to the establishedhierarchy; to socialists they stood for unbridled exploitation of the worker. Long after their power had disappeared, Hitler combined the two strands into a lethal cocktail, when he referred to the “rapacity of a Rothschild, who financed war and revolutions and brought the peoples into interest-servitude through loans.” The origins of Auschwitz can be traced in part to this fateful coupling.
Ferguson has taken to heart Fernand Braudel’s maxim that “the history of the great merchant families is…every bit as valuable as the history of princely dynasties in the study of political fluctuations….” The central historical question raised by his book is the extent to which high finance shaped the politics of the nineteenth century when, as he says, the Rothschilds were “the world’s banker.”
Although it was published as a single volume in England, Viking has split up Ferguson’s long history into two books for the American market. The first, published in the US last year, takes the story up to 1848. It tells how Mayer Amschel’s five sons, led by Nathan, spread out …