Episode Details

What I learned from reading The House of Rothschild: Money's Prophets by Niall Ferguson.

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A business can only be managed well if one pays as much attention to the smaller business transactions as one does to the larger ones.

All banks have histories, only the Rothschilds have a mythology. 

Ever since the second decade of the nineteenth century, there has been speculation about the origins and extent of the family's wealth; about the social implications of their meteoric upward mobility; about their political influence, not only in the five countries where there were Rothschild houses but throughout the world.

Unlike modern multinationals, however, this was always a family firm.

Perhaps the most important point to grasp about this multinational partnership is that, for most of the century between 1815 and 1914, it was easily the biggest bank in the world. 

In terms of their combined capital, the Rothschilds were in a league of their own. The twentieth century no equivalent.

What exactly was the business the Rothschilds did? To answer these questions properly it is necessary to understand something of nineteenth-century public finance; for it was by lending to governments or by speculating in existing government bonds-that the Rothschilds made a very large part of their colossal fortune.

It was war and the preparation for war which generally precipitated the biggest increases in expenditure.

It was in this highly volatile context that the Rothschilds made the decisive leap from running two modest firms—a small merchant bank in Frankfurt and a cloth exporters in Manchester—to running a multinational financial partnership.

The system they developed enabled British investors (and other rich "capitalists” in Western Europe) to invest in the debts of those states by purchasing internationally tradeable, fixed-interest bearer bonds. The significance of this system for nineteenthcentury history cannot be over-emphasised. For this growing international bond  market brought together Europe's true “capitalists": that elite of people wealthy enough to be able to tie up money in such assets, and shrewd enough to appreciate the advantages of such assets as compared with traditional forms of holding wealth (land, venal office and so on). Bonds were liquid.

The Rothschilds spent so much time, energy and money maintaining the best possible relations with the leading political figures of the day.

They constantly strove to accelerate the speed with which information could be relayed from their agents to them. They relied on their own system of couriers and relished their ability to obtain political news ahead of the European diplomatic services.

The primary concern of this book is therefore to explain the origins and development of one of the biggest and most unusual businesses in the history of modern capitalism.

The history of the firm is inseparable from the history of the family.

Inevitably, there were conflicts between the collective ambitions of the family, so compellingly spelt out by Mayer Amschel before he died, and the wishes of the individuals who happened to be born Rothschilds, few of whom shared the founder's relentless appetite for work and profits.

There are few major political figures in nineteenth-century history who do not feature in the index of this book.

"I see in Rothschild," he went on, "one of the greatest revolutionaries who have founded modern democracy": Rothschild destroyed the predominance of land, by raising the system of state bonds to supreme power, thereby m