High Financier: The Lives and Time of Siegmund Warburg Paperback – Jun 28 2011
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"Ferguson brings great authority to this account.... [He] is a talented writer, capable of grace and insight, but it is his ability as a historian that shows most strongly in High Financier. ---Washington Post --This text refers to the MP3 CD edition.
About the Author
Niall Ferguson is Laurence A. Tisch Professor of History at Harvard University, a Senior Research Fellow of Jesus College, Oxford University, and a Senior Fellow of the Hoover Institution, Stanford University. The bestselling author of Paper and Iron, The House of Rothschild, The Pity of War, The Cash Nexus, Empire, and Colossus, he also writes regularly for newspapers and magazines all over the world. Since 2003 he has written and presented three highly successful television documentary series for British television: Empire, American Colossus, and, most recently, The War of the World.
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"High Financier" can be divided into three parts based on the word "Lives" in the subtitle. The first "life" of Siegmund Warburg was his German one, from 1902-1933, covered in the first 90 pages of the book. His second "life" was his "Anglo-American" life - this runs from 1934 through the 1950s, or about page 200 in the book. The focus here is on Warburg's efforts at increasing transatlantic financial ties. The remainder of the book, slightly more than half, includes his "Anglo-German" life, or his work from the 1950s through his death in 1982 which primarily focused on European integration.
That first part will be of most interest to readers interested in German history and the interwar period. One intriguing point is what Ferguson describes as Warburg's ambivalent feelings toward the Nazi rise to power. As an educated German Jew he was of course repelled by their anti-Semitism and thuggish manner. Yet Warburg's diary and correspondence show that elements of the Nazi program appealed to him. This appears to be because as a life-long man of the political left, Warburg felt a strong attraction to collectivist policy and hostility for the decadence of the bourgeoisie, and thus hoped a coalition government including them might do some good. Ferguson's point is that if even someone like Warburg could fail to understand the Nazis' true nature until 1934, we should be more understanding of people in other countries who took even longer.
Ferguson goes to some effort to portray Warburg as an active opponent of the Nazis once he fully realized the threat, but he tries too hard. He claims Warburg to have been "an ardent opponent of the policy of appeasement," but cites no public anti-Hitler statements prior to 1939. All of the footnotes cite his diary and private correspondence. Indeed, during the 1934-1939 period Warburg traveled to Germany regularly for business, and was never bothered by the regime. All his family had left the country except two uncles who had chosen to stay to maintain the family business. Maybe it was because he didn't become a British citizen until 1939, or maybe he was concerned about his uncles. But despite all the talk about "spiritual values," it is hard not to suspect that Warburg's life priorities were no different than those of any other banker.
In regard to Warburg's "Anglo-American" life, he spent some time in the U.S. at a young age in the late 1920s, before the crash, and with part of the Warburg family firmly established in New York. He considered first going there, but after moving to London in 1934 he was heavily involved in cross-Atlantic finance before his focus moved back toward the continent.
Warburg's third life, taking up just over half the book, is his Anglo-German life. I say that - and this is a term Ferguson uses himself - because while living in the UK is business focused primarily on European finance and the need for greater integration. Whether Warburg was as important as Ferguson claims, I don't know enough about British financial history 1945-1980 to judge. But he portrays Warburg as the father of the hostile takeover in Britain, and as key to the rise of the Eurobond market and to London's revival as a financial center generally.
Warburg does seem to have been a master of business management. Ferguson devotes significant space to Warburg correspondence on the principles of a banker's work and good management practices. I won't go into that here, but readers interested in business philosophy may find these segments fruitful.
Warburg was also a strategic visionary. Ferguson consistently portrays him as being ahead of his contemporaries when it comes to business and finance. But he also presents him as being farsighted in geo-strategic terms, foreseeing the synthesis of Kennan's containment and Kissinger's détente. In 1954 Warburg wrote that the keys to victory were "building up the strength of the Western allies, second, raising the standard of living in the East (particularly in South-East Asia), and third, by a relaxation of tension..."
Having said all that, I certainly did learn something about the business and national financial events of the period covered and this will undoubtedly come in handy in other readings. But learning about financial history is usually a bloodless endeavor, and the Professor's choice of this subject as a biographical vessel for an account of the times only reinforces that perception. Got the rest: the `why' eludes me.
He revitalized London as a banking center after the war and orchestrated the takeover of British Aluminum, first hostile takeover in Britain. His partners were concerned since it flew in the face of City practice. However it resulted in a great deal of new business for the firm. Though I don't rememember it being in the book, he alway insisted on turquoise ink for signing his letters.
The book recounts Sir Siegmund's interest in graphology. I had to write an essay to be hired which presumably was sent to his graphologist.
He originated the eurobond market which helped make London a financial center.
It is a fascinating biography about a extraordinary man.
Ferguson's book may draw a smaller audience in the U.S. because Sir Siegmund's reputation is less well-know here. Nevertheless the lessons to be drawn from Sir Siegmund's efforts are as relevant today as they were when he was teaching them by example 50 years ago.
The book starts with the background of Warburg's wealthy family which was not as financially important as the Rothschilds. It covers family connections as well as political connections in Germany, Britain and the US. Siegmund George Warburg basically dual career pre-war and post-war, starting under the influence of his uncles in family branches in Germany and the USA. The book describes his struggles to become independent of his family.
In addition to financial analysis, it's also a very fine political history of the twentieth century based on Warburg's, not always accurate, political insights. He made an accurate assessment of Hitler's character, but was politically wrong in the belief that the regime would not last. Ultimately he saw the light and left Hamburg for London at great financial sacrifice. Its interesting to learn that none of Warburg's extensive close family was lost in the holocaust. There's his interesting view of Brits as inefficient, especially due to social bias. Some questions remain. Ferguson doesn't explore why Britain accommodated Warburg's desire for British citizenship while rejecting so many other European emigrates. Was it simply an issue of money and connections?
In business he was noted for possibly first ever hostile takeover attempt, Warburg advised on the 1959 British Aluminium takeover with Reynolds, in opposition to Alcoa and other suitors.
Warburg was devoted to free trade, had a Germany based fear of inflation and insisted on liquidity in his investments. Also interesting is the somewhat earlier career of an influential relative of SGW, Paul Warburg, who insisted that the Fed not be called a central bank.
For his politics the book describes SGWs associations with Brunig, vonPapen, Schliecher and other German luminaries in the pre Hitler era. Ferguson points to Schacht's enthusiasm for Hitler. I wonder how valid that is. Perhaps disillusionment followed after Warburg was gone.
He greatly favored the Marshall Plan and deplored Eden's "reckless adventure" in the Suez in 1956. Warburg later advised Harold Wilson and other British PMs and ministers. He was an early advocate of European unification, advising on formation of the EEC. He observed Britain destroying upper and middle classes with ferocious taxation. US growth declined by 1% in the 1970s. The crisis of 1973 brought disillusionment with American politics.
Ferguson descibes the long failed assocation with Koehn Loeb which eventually merged with Lehman Brothers in 1977. After some initial success after SGW's death in 1982 the firm enjoyed some success before succumbing to a general decline of British merchant banking. Today the firm survives as Warburg-Pincus.
SGW associated with literary figures as well as businessmen and bankers. He liked to hire people who shared his literary and philosophical bents. He lunched often with Isaiah Berlin.
He wanted to hire Henry Kissinger. Except for Margaret Thatcher and SGW's graphologist there are no women mentioned. The book doesn't analyze his viewpoint on women in the workplace.
The book gets somewhat repetitive and tiresome on corporate dealings and banking activities.
It's sometimes hard to gauge the importance of the action. There are only occasional interesting characters like Milo Cripps, son of Sir Stafford. There's a listing of SGW's aphorisms. My favorite is "wishful non-thinking." It's very applicable in all eras. He was noted as a perpetual pessimist
Ultimately Ferguson makes Warburg out to be no more or less than a successful banker, ambivalently calling him a nineteenth century German trapped in twentieth century England. In being a German Jewish financier emigrating to become influential in London, Ferguson compares him to Nathan Rothschild, a century earlier.
The book is typical of Ferguson in his use of extensive research to support his historical and financial acumen in great detail.