This exclusive event was made possible by T. Rowe Price.

As the world continues to struggle to find its footing amid rising unemployment, constricted credit and crumbling banks and industries — raising questions about how the economic system collapsed — PBS presents Niall Ferguson’s ASCENT OF MONEY. This groundbreaking four-part series examines the creation of the economic system by taking viewers on a global trek through the history of money. (An abbreviated version of the documentary, which focused on the current economic crisis at the advent of the Obama administration, aired in January; it can be streamed in full on the Website.) The four-hour version delves deeper into how the complex system of global finance evolved over the centuries, how money has shaped the course of human affairs and how the mechanics of this economic system work to create seemingly unlimited wealth — or catastrophic loss.

ASCENT OF MONEY is based on Ferguson’s best-selling book The Ascent of Money: A Financial History of the World, which predicted the current economic crisis and was released within weeks of the meltdown of sub-prime loans.

Said Ferguson, “In the midst of a major economic depression, it is often hard to appreciate the historical precedents and truly understand that while a situation may look dire, our system of finance, banking and trade has allowed for unprecedented progress. I’m hopeful the film will allow viewers to better understand the on-going evolution of our financial system and how our economy remains extraordinarily viable even as we are grappling with a crisis of historic proportions.”

For millions of people, the recession has generated a thirst for knowledge about how our global economic system really works, especially when so many financial experts seem to be equally baffled. In ASCENT OF MONEY, economist, author and historian Ferguson offers insight into these questions by taking viewers step-by-step through the milestones of the financial history that created this system, visiting the locations where key events took place and poring over actual ledgers and documents — such as the first publicly traded share of a company — that would change human history. Ferguson maintains that the history of money is indeed at the core of our human history, with economic strength determining political dominance, wars fought to create wealth and individual financial barons determining the fates of millions.

Among the places Ferguson visits are Bolivia, where Spain established vast gold and silver mines — still in operation — and enslaved the indigenous people to create so much currency for the Spanish crown that it eventually became worthless; Italy, where the Medici family transformed the sinful practice of usury into the banking system we know today and in the process became as powerful as monarchs; Paris, where Scotsman John Law created a Ponzi scheme tied to the Louisiana territory that brought France to its knees; London, where bonds trader Nathan Rothschild and his family nearly went bankrupt by helping to finance the British army’s war against Napoleon, then achieved enormous wealth through the buying and selling of war bonds; Scotland, where two ministers established the first life insurance fund, and New Orleans, where the shortcomings of their calculations would be demonstrated to tragic effect in the wake of Hurricane Katrina; and New York, where Ferguson interviews financial wizard George Soros about the concept he introduced of short selling derivatives based on a prediction that they will lose value.

Through this history, viewers learn economic fundamentals that inform the meanings of sub-prime mortgages and credit default swaps and an understanding how the Chinese economy has risen to dominate the world.

GRADE LEVEL: 9-12

TOPIC / SUBJECT MATTER: Economics, Finance, History

TIME ALLOTMENT: 2-3 45-minute class periods

OVERVIEW:
Using video segments from the PBS series THE ASCENT OF MONEY, this lesson teaches high school students about the role of banks both in history and the present day. Students will learn about key financial concepts that contributed to the evolution of banks. Those concepts will then be applied to modern banks and the services they provide. As a culminating activity, students will be introduced to the concept of creditworthiness.

LEARNING OBJECTIVES

By the end of this lesson, students will be able to:
• Define the terms “credit” and “interest”
• Explain the evolution of money lending to banking
• Detail the role of modern banks and the services they provide
• Analyze criteria banks use to determine creditworthiness
• Understand the roots of the modern banking system
• Recognize how personal choices and decisions affect one’s creditworthiness

STANDARDS

National Standards for Economics
Standard 4: Role of Incentives

• People respond predictably to positive and negative incentives.

Standard 5: Gain from Trade

• Voluntary exchange occurs only when all participating parties expect to gain. This is true for trade among individuals or organizations within a nation, and among individuals or organizations in different nations.

Standard 10: Role of Economic Institutions

• Institutions evolve in market economies to help individuals and groups accomplish their goals. Banks, labor unions, corporations, legal systems, and not-for-profit organizations are examples of important institutions. A different kind of institution, clearly defined and enforced property rights, is essential to a market economy.

Standard 11: Role of Money

• Money makes it easier to trade, borrow, save, invest, and compare the value of goods and services.

Standard 12: Role of Interest Rates

• Interest rates, adjusted for inflation, rise and fall to balance the amount saved with the amount borrowed, which affects the allocation of scarce resources between present and future uses.

MEDIA RESOURCES
VIDEO

Clip 1:

Establishing Credit, Earning Interest

Clip 2:

Borrowing Time

Clip 3:

First Bank of the Medici

Access the streaming and downloadable video segments for this lesson at the Video Segments Page.

WEBSITES
CitiFinancial: Resource Center: All About Credit
http://www.citifinancial.com/resourcecenter/allaboutcredit_lender.php
This Web site from Citibank details criteria for granting a loan or issuing a credit card.

What’s Up in Finance? It Costs What?! Credit Card Primer
http://www.thirteen.org/finance/games/itcostswhat_creditcard.html
In this learning interactive from THIRTEEN, users learn about the basics of using credit cards.

What’s Up In Finance? It Costs What?! Case Files
http://www.thirteen.org/finance/games/itcostswhat_casefiles.html
In this learning interactive from THIRTEEN, users read about and understand different ways of dealing with credit card debt.

MATERIALS

For each student:
• Creditworthiness Student Organizer (PDF) (RTF)
• Weekend Trip Invitation (PDF) (RTF).

For each pair/group of students:
• Chart paper and markers
• Computer with access to internet

For the class:
• Creditworthiness Student Organizer Answer Key (PDF) (RTF)
• Bank Services Answer Key (PDF) (RTF)
• Computer with access to internet
• Projector and screen

PREP FOR TEACHERS

Prior to teaching this lesson, you will need to:

Preview all of the video segments and Web sites used in the lesson.

Download the video clips used in the lesson to your classroom computer, or prepare to watch them using your classroom’s Internet connection.

Bookmark the Web sites used in the lesson on each computer in your classroom. Using a social bookmarking tool such as del.icio.us or diigo (or an online bookmarking utility such as portaportal) will allow you to organize all the links in a central location.

Make copies of the Student Organizers.

Next: Proceed to Activities

Lesson plans for THE ASCENT OF MONEY were created by the LAB@Thirteen, Thirteen’s Community and Educational Outreach Department.