Niall Ferguson Interview: Conversations with History; Institute of International Studies, UC Berkeley

Money and Power: Conversation with Niall Ferguson, John Herzog Professor of Financial History, New York University; November 3, 2003 by Harry Kreisler

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Being a Historian

What does it take to do your kind of history? You have a remarkable breadth to your work -- when you're talking about war, it's not just diplomatic and military history, you're also talking about the economy and society. What is involved in preparing for that kind of work and that view of history?

You could argue this as slightly dilettantish, in an age of professional specialization. I'm not promiscuous, in that I dabble in economic history and then flirt with military history, and then hang out for a little bit with the diplomatic history, and even do some cultural history. I'm sure some people in the academic world would regard this as very unsound. To my mind, those specializations, those compartments that we've erected in academic institutions are, in fact, a barrier to understanding, because it's the connections between, for example, economic and military history [that] are really interesting. All the work that I've done from the very first book I wrote has been about, if you want to put it this way, the interface between economics and wider social and political questions. It's just that that interests me. If one were simply to say, "Niall Ferguson does financial history, and his books are exclusively about financial transactions and have no relationship, for example, to nineteenth century literature or to the great military conflicts of the twentieth century," well, they would be more boring books, but they would also be far less illuminating, I think.

So this strategy works toward giving a big picture of what you're discussing, or a different cut into the problem.

I think there are very profound problems of causation in modern historiography that are rather under-explored. There used to be a straightforward causal model, which was, more or less, on the shelf to be used by students and professors alike, and it was called Marxism. In Marxism, it was the economics and the economic change that essentially drove everything else. Now that's long gone. But in its place, a whole range of far less clearly articulated, unintelligible models. Indeed, there are models which don't have any room at all for the economics. A great deal of the cultural history that's done today seems to me almost completely divorced from economic reality. And that's pretty futile, because, certainly, the study of modern history is simply inseparable from the study of economic history.

My mission is to join adults together again to say, "Look, history is a holistic undertaking. We simply cannot exist in the boxes talking to mutual-interested specialists if we want to have some understanding of the way in which" -- to give one single example -- "financial markets interact with grand strategy." It's an issue which is at the center of global politics today, and it was at the center of global politics one hundred years ago. But you can't understand it if there is one group of people studying the financial markets, and one group of people studying the wars, and they never meet.

You are associated with a way of thinking about history that has another dimension to it, and it's called "counterfactual history." Tell us what that is, and how it adds another layer, another dimension, to this holistic view.

Counterfactual history is a mouthful, and rather off-putting, and some people might find a more accessible idea if one said, "It has to do with 'what if' questions: What if the United States had never intervened in the First World War and even the Second World War?" -- just to take a single example. Those kinds of questions used to be regarded as frivolous and unserious by professional historians. The great E.H. Carr, in his dreadful play-act, What is History? dismissed them as the kinds of questions that would be asked by bad losers. In fact, it's a very frivolous argument to make against counterfactual history, because it is impossible to understand any major historical event without posing a "what if" question, either implicitly, which many historians do or -- and I think this is much better -- explicitly.

For example, if you think the Great Depression was the reason for the rise of Hitler, then you are implicitly suggesting that if there had been no Great Depression, then there would have been no Nazi regime. book coverNow, that's the kind of implicit counterfactual that I argue in a book called Virtual History. We should be explicit. We should be straight with our students and with our readers and say, as I try to do in The Pity of War, "I think if Britain had stayed out of the First World War in 1914," a perfectly plausible scenario, since it was a keenly, hotly debated question in the British government, "the world would be very different. The entire twentieth century would have turned out differently." I think it's a matter of scholarly responsibility to say that explicitly, and then to try to show the reader what an alternative history would have looked like.

You're saying that you actually have to look at the alternatives that were presented to the actors for which there is evidence, and which might have pointed to a different course for history.

I think that's the key. It's not a matter of plucking imaginary scenarios out of the air. Virtual history -- and this is a very, very important point, which isn't understood by many people who dabble in "what if" questions -- is only legitimate if one can show that the alternative that you're discussing, the "what if" scenario you're discussing, was one that contemporaries seriously contemplated. In all the essays in the book Virtual History, the contributors were asked to make it absolutely clear what the evidence was for their alternative scenarios. After all, that's not difficult to do, because in the present, we don't know the future. We have plausible futures from which to choose. We make plans. We build scenarios. We do this in our everyday lives, because we've absolutely no idea what's coming a year from now. So it's not difficult to go back and find that in 1914 -- just to give that example again -- British politicians were imagining plausible scenarios, including non-intervention. That's how they made the decision. They set these scenarios out. They discussed them, and they opted for intervention because they saw a nightmare future of German domination of the continent.

That's the key point. You've got to look at the alternatives contemporaries considered. After all, if we are in the business, as Ranke said we should be, of capturing the past, "Viez aiglen les te vezen," as it actually or essentially was, that has to include the experience of decision-making, the experience of contemplating futures, including futures that never actually happened.

It also leads to a critique of earlier decisions, because in the World War I book you suggest that had the British spent more money on armaments, they might have deterred the Germans, which they didn't do, and then they wound up intervening at a time when it was too late because they didn't have enough armaments.

Yes. The next step that one can take with the counterfactual method is to make assessments, judgments, about past decision-making. This seems to me an extremely important part of the historian's responsibility. It's not obligatory, but Meineke said that history was about causality and about values. It was about evaluation. It was about judgment. It wasn't simply about, so to speak, presenting the past and simply leaving the readers to choose. To my mind, once you've shown why this decision was taken and what the alternative scenarios were, it seems perfectly impossible to resist the temptation (at least I find it impossible to resist) to say, "Well, actually, maybe they chose the wrong one."

When you make that kind of argument, you're subject to a lot of controversy in the field, because you're going against the conventional wisdom of the meaning of the British intervention in World War I.

In that specific case it was certainly controversial, because people, generally speaking, like to live with the past that happened. They're quite troubled when they're presented with the idea that there are, as it were, parallel universes in which that past didn't happen. In the world of science, this notion is perfectly well understood. And, incidentally, also in the world of the law, where "but for" arguments, "what if" arguments are, indeed, a routine part of arguments about responsibility and causation.

For some strange reason, the historical profession walks away from this kind of reasoning, I suspect because some people find it rather difficult. Therefore, when one comes along and says, "Well, in fact, there were alternatives in 1914. Here is the documentary evidence that the Cabinet was not just divided, but in fact that a majority of the Cabinet favored non-intervention; and here are the consequences. Britain doesn't go in. The Germans win a limited continental war. And the consequences to the rest of twentieth century history are not only different but preferable." This was the thing that I think many readers, including many readers in Germany -- incidentally, German academics utterly hated the book -- found quite difficult to imagine.

Because ... Because they ... ?

Because they had a sort of pre-programmed notion that any kind of German victory in the twentieth century conflict would be the worst possible outcome.

I see.

One obvious implication of the book was that Germany in 1914 was a far less malevolent Germany than the Germany of 1939, which I firmly believe to be true. A German victory in a limited continental war against France and Russia in 1915 or 1916 would have had, really, quite benign consequences. Not least -- and this is a point often misunderstood -- for the Jews of Eastern Europe, who would be much better off under the Wilhelmian Imperial Reich than they were under Czarist Russian rule.

You suggested that Hitler might have continued painting in Vienna.

Well, Hitler would have been out of a job, to put it mildly, because there's simply no way to imagine a Nazi regime emerging, or, indeed, a Weimar Republic emerging, if the Kaiser Reich, the Imperial Reich, is victorious in the war that it begins in 1914. That regime would have endured, and, actually, I think, interestingly, might well have endured and liberalized. Because one of the interesting consequences, as contemporaries pointed out, of the decision for war in 1914 was that Social Democrats were brought into government for the first time. So the Kaiser's wartime government initially moved to the left. Many German conservatives rather worried that one consequence of the war would be a shift in the direction of constitutional concessions to the working class as the price for their collaboration in the war effort.

So the history that you're describing and the particular example seem to require a comprehensive set of knowledge. And by "comprehensive set of knowledge" I mean, coming at the problem from different fields -- what economics tells us about Germany, what diplomatic history tells us about Germany or Britain. So, a lot of different kinds of knowledge brought together in a new way, which then suggests that what's at work here is historical imagination of a different kind.

I think there are two stages to the work that I do generally. Stage one is to try to understand what contemporaries thought was happening. Understanding contemporary thought is the first thing the historian should be concerned with. In that respect, as I'm a classical historicist, I think what we're about is trying to recapture past thought and past experience with all its uncertainties. Once one has entered, if you like, the mind of past actors, you're halfway there. You can see what their options were. You can assess the decisions that they made. But part two of the process is then to say, "With the knowledge that we have, subsequent knowledge garnered from economic, social, and other research, we can perhaps see better than they could see which of the decisions was to be preferred." I think juxtaposing contemporary perception with what I would put very crudely as economic or strategic reality is quite a satisfying way of interrogating historical problems.

It's, of course, a little simplistic to say "Here are the perceptions, and here is the reality." One always wants to avoid the condescension of the historian to the past. What we know with benefit of hindsight is knowledge that has to be very strictly separated from what we know contemporaries knew when we're assessing their decisions. There's no point in saying they got it wrong, because they didn't know, for example, the German economy was about to outstrip Russian economic growth in the twentieth century. How could they possibly have known that? If you're going to make a value judgment, you can only judge them on the basis of what they knew at the time. But there's a second order judgment you can make, which is the judgment with the benefit of hindsight. As long as you make it clear that's what you're doing, that seems to me perfectly legitimate.

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