Washington Post Book Reviews
For You
Monday July 19, 2010
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HIGH FINANCIER: The Lives and Time of Siegmund Warburg
Niall Ferguson
Penguin Press
ISBN 978-1-59420-246-9
548 pages
$35
Reviewed by T.J. Stiles
There's a saying in publishing that the only brand is the author. Unquestionably Niall Ferguson is a brand, thanks to sweeping, Big Picture, Big Idea books, such as "Colossus" and "The Ascent of Money." With Ferguson, we expect provocative interpretations of epochs, empires and civilizations.
Not this time. In "High Financier," Ferguson follows a solitary capitalist into the weeds and flowers of his financial garden. This is no failing, of course; biography is simply a different enterprise. Rather than overarching, it often must be minute and particular. And Siegmund Warburg was extremely particular.
If Warburg's name seems unfamiliar, that is partly by design. He operated largely behind closed doors, which he latched, locked and bolted. As one of London's leading merchant bankers (what Americans commonly call investment bankers), he saw himself primarily as an advisor to corporate clients and policymakers. He was exceptionally discrete. His opinion of an American partner soured after Warburg saw the Yank eating peanuts at a cocktail party a little too eagerly -- behavior well outside of Warburg's strict code of conduct. Not that Warburg was meek: Henry Kissinger said that he "was an easy person to get along with if you just said 'yes.'" Kissinger's words suggest the scope of Warburg's influence, in politics as well as banking. Ferguson calls Warburg a prophet of globalization, and argues that he did more than anyone else to restore London's leadership in international finance after World War II. Yet Warburg's mere survival, let alone triumph, was little short of miraculous.
As Ron Chernow chronicled in "The Warburgs," Siegmund belonged to an illustrious Jewish family based in Hamburg. Merchant banking had been its business since 1798; the flagship firm, M. M. Warburg, achieved great heights under Max Warburg, who recruited his 18-year-old cousin Siegmund in 1920. Young Warburg, having endured World War I and an attempted socialist revolution, now faced hyperinflation. Small wonder he developed a lifelong aversion to risk.
Then came the darkness. After Hitler took power, Ferguson writes, Warburg briefly (if astonishingly) mused that the Nazis might do some good. He came to his senses and fled to London. "Uncle" Max hung on for almost too long, helplessly watching "Aryanization" strip him of his firm.
Siegmund's choice of London seems curious, given his family connections in New York. When he organized a new house in the bomb-scoured square mile of the City, the financial district, he faced the public-school anti-Semitism of British banking. "He is an international Jew to whom no bounds of country ... are known," wrote a Bank of England officer in 1953. "He employs Jews in his many operations which have often been askance to the Authorities."
Despite this hostility -- not to mention economic devastation and an avowedly socialist Labour government -- Warburg prospered. He organized a groundbreaking hostile takeover of British Aluminium in the late 1950s, and he largely created the Eurobond market. A clever device for circumventing currency controls, Eurobonds served to politically integrate the continent. With success (and discretion) came acceptance and influence. When he spoke, presidents, prime ministers and Henry Kissinger listened. Yet after he died in 1982, his firm abandoned his caution, over-expanded, and was taken over in 1995. It all sounds uncomfortably familiar.
Ferguson brings great authority to this account. Every page demonstrates his deep research in vast, newly opened archives. He crisply sketches Warburg's perfectionism, cultural life and exacting vision of high finance, situating him precisely in the hurricane history of 20th-century Europe.
At times, though, the very mass of Ferguson's expertise and research weighs upon his writing. I was surprised by his confidence in readers' historical and financial knowledge; I doubt he helps many by placing an event "at the time of the financial wrangles that helped topple Prince Bulow from the Reich chancellorship." The bounty of manuscripts occasionally leads to overindulgence, with a narrow focus on Warburg's views, not their impact. Ferguson refers to "a highly critical memorandum," for example, without telling us who, if anyone, read it.
The subtitle speaks of Warburg's "lives." To me, this suggests conflicting pursuits or radical changes -- say, Arnold Schwarzenegger's leap from bodybuilder to movie star to governor. But Warburg played many roles simultaneously -- financier, policy advisor and Zionist (among others) -- and all reflected a coherent personality and career. Unfortunately, Ferguson splinters them into separate chapters and relegates Warburg's peculiar faith in handwriting analysis (which he relied on in hiring) to a postscript. As IKEA does with its furniture, he has disassembled Warburg's life and handed over the pieces, asking the reader to put them back together.
Ferguson is a talented writer, capable of grace and insight, but it is his ability as a historian that shows most strongly in "High Financier." It illuminates a critical aspect of European history and shows that Warburg, though flawed, was one banker worthy of respect.
T.J. Stiles is the author of "The First Tycoon: The Epic Life of Cornelius Vanderbilt," which won the 2010 Pulitzer Prize for biography and the 2009 National Book Award for nonfiction.
Copyright 2010 Washington Post Writers Group
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RESET: Iran, Turkey, and America's Future
Stephen Kinzer
Times
ISBN 978-0-8050-9127-4
274 pages
$26
Reviewed by John Lancaster
For the title of his new book, Stephen Kinzer borrows the latest diplomatic fad word -- reset -- in calling for a makeover of U.S. policy in the Middle East. I know what you're thinking: Oh no. Not another book on -- fill in the blank (American missteps in Iraq, the Israel lobby, Saudi oil politics etc.). While Kinzer touches on several such themes, his main thesis is more provocative: namely, that the path to a stable Middle East runs not through Israel and traditional Arab allies but through Turkey and Iran. Therein lie the book's strengths as well as its main weakness.
First, its strengths: A former foreign correspondent for the New York Times, Kinzer argues persuasively that despite their very different governments -- one friendly and free, the other hostile and theocratic -- both Turkey and Iran are host to vibrant democratic traditions that make them natural long-term partners of the United States. He deftly interweaves the stories of the Iranian and Turkish democracy movements, whose roots are deeper than most Americans realize.
For example, Kinzer shows how recent anti-government protests in Iran are part of a continuum that dates at least to 1906, when popular fury toward a decadent monarchy led to the creation of Iran's first parliament. Of particular interest is the story of Howard Baskerville, a young Princeton graduate from Nebraska who was teaching in Tabriz when the ancient city was besieged by royalist forces seeking to crush the new democracy. Baskerville sided with the democrats and died while leading schoolboys into battle in 1909. "Today Howard Baskerville is an honored figure in Iran," Kinzer writes. "Schools and streets have been named after him. His bust, cast in bronze," holds a place of honor in Tabriz. Who knew?
The account is typical of Kinzer's lively, character-driven approach to history. Mustafa Kemal -- also known as Ataturk, the charismatic army officer who is regarded as the founder of modern Turkey -- is depicted as an alcoholic and libertine whose conquests included a teenage Zsa Zsa Gabor, or so she later claimed. More substantively, Kinzer describes a ruler so bent on purging the Turkish state of religious influence that he ordered civil servants to shed their traditional fezzes in favor of Western-style bowler hats. In that and other ways, Kemal had much in common with Reza Shah Pahlavi, the rough-hewn soldier who seized power in Iran in 1921. Despite their autocratic styles, both rulers were relentless modernizers who promoted education and women's rights -- and in doing so, Kinzer argues, helped create the conditions that allowed democratic ideals to germinate. The two countries "developed national identities shaped by the Enlightenment as well as Islam," Kinzer writes. "This was a new synthesis. It invigorated Turkey and Iran and set them starkly apart from the countries around them."
After decades of instability and military rule, Turkey, a NATO member, has capitalized on its democratic potential and has even moved haltingly toward membership in the European Union. For that Kinzer assigns much credit to Turkey's ruling Justice and Development party, whose Islamist leanings belie the view that Islam and democracy are incompatible. "Democracy has become Turkey's only alternative," Kinzer writes. "Even pious Muslims recognize, accept, and celebrate this." Iran, of course, is another story. That is at least partly the fault of the United States, whose role in ousting the democratically elected government of Mohammad Mossadegh in 1953 forms an important part of Kinzer's narrative (and the focus of one of his previous books). The coup restored the Pahlavi dynasty. It also set the stage for the 1979 Islamic Revolution and the decades of U.S.-Iranian enmity that have followed. But Kinzer still finds reasons for hope. Even now, he writes, "Iran is the only Muslim country in the world where most people are reliably pro-American. This pro-American sentiment in Iran is a priceless strategic asset for the United States."
Kinzer's take on Iran and Turkey is fresh and well-informed, but he stumbles when he starts to play policymaker. His plea for a more conciliatory approach to Iran sounds a bit fanciful at a time of rising tensions over its nuclear program. And besides, haven't we tried that already? Nor is there anything particularly new about Kinzer's call for a recalibration of U.S. policy toward Saudi Arabia and Israel. For example, he is hardly the first to urge a tougher approach to Israel, a chorus that has only grown louder since Israel's disastrous commando raid on a flotilla trying to breach its naval blockade of Gaza in May. In Kinzer's view, it's time for the Obama administration to "impose" a peace settlement on Israel and the Palestinians, but he doesn't explain quite how it should do this, other than presiding over "a coercive version of the smoke-filled room." After the riches of the book's first half, I found myself wishing that Kinzer had dispensed with the think-tank musings (and bullet points) and stuck to his strengths as a journalist and historian.
John Lancaster is a former Middle East correspondent for The Washington Post.
Copyright 2010 Washington Post Writers Group
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