The Ascent of Money: A Financial History of the World

Chapter 6 discusses globalization and the rise of China’s economy to become intertwined in the American economy such that the author calls the phenomenon “Chimerica.” The East and the West were roughly equal in terms of per capita income 300-400 years ago, and in many ways China was much more advanced. But “between 1700 and 1950 there was a ‘great divergence’ of living standards between East and West” (285). Of the many possible reasons for this, Ferguson focuses on financial differences. Conditions in China prevented the need for the financial innovation that previous chapters have shown took place in Europe. When such innovations did come to China, they were part of a colonial episode and thus were identified with imperialism. As a result, by the mid-20th century, both China and India had largely disengaged from global markets.

“Globalization and Armageddon”

This section examines the globalization that began in the 19th century in China. Ferguson begins with the story of the first Opium War that began in 1839. The British trading company named Jardine and Matheson had been importing opium from India to the southern Chinese city of Guangzhou (then called Canton by Westerners). This was in violation of Chinese law, though they were able to continue doing so for some time.