Friday, July 2, 2010

Feguson: An Evolutionary Approach to Financial History

I watched a very interesting presentation made this spring @ Grisham College in London by Niall Ferguson. Entitled "An Evolutionary Approach to Financial History", it proved quite interesting. Financial history is where Ferguson cut his teeth, including a study of the House of Rothschild (in two volumes) and most recently, a biography of German-born, London-based financier Siegmund Warburg. In this talk, Ferguson compares the financial world to the natural world, invoking impressive precedents from the likes of Thorstein Veblen and Joseph Schumpeter, among others. I think his argument and comparisons quite sound; in fact, I've seen more and more comparisons of economic life to the world of evolutionary nature. Ferguson notes that there certainly are differences, such as (the effort, at least) of intelligent design of financial systems and the existence of Lamarckian (inherited traits) evolution (thanks to culture), between the natural world and the man-made world of finances. However, the similarities are even greater. In all, an excellent and thoughtful consideration of a model for considering finance and financial history. I think that Ferguson is on the something here.

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