Niall Ferguson: 'A World War without War' (Spiegel interview)

[Niall Ferguson is Laurence A. Tisch Professor of History at Harvard University.]

SPIEGEL: Mr. Ferguson, were you moved when you saw the future president, Barack Obama, in Chicago?

Ferguson: Yes, it was a very moving moment. It was similar to the release of Nelson Mandela. When Obama was born, in 1961, mixed marriages between blacks and whites were still illegal in one-third of the American states.

SPIEGEL: Historically speaking, that was yesterday,

Ferguson: Of course. But we are talking about ordinary discrimination, not just the legacy of slavery. And it had not disappeared. It is astonishing that the transformation from a racist America to an America that elects a black man to the White House was possible within that period of time. Even the world's most dogmatic conservative ought to be moved.

SPIEGEL: You initially favored John McCain?

Ferguson: I have become a convert in the last six months because of Obama's extraordinary combination of rhetorical genius, coolness under fire and organizational skills. This was the best election campaign we have ever experienced.

SPIEGEL: Which doesn't necessarily have to mean a great presidency.

Ferguson: What it means is enough: the death of racism, the end of the original American sin and, most of all, the right reaction to end the economic crisis. Obama can stimulate self-confidence because he is so calm and collected. He will not simply put an end to the crisis or ensure that banks lend money again. He is a politician, not the Messiah. But he can change the national mood. Americans are lucky that they were able to elect him now, just as the panic reached its climax. It is as if they had voted Roosevelt into office earlier, in 1930, and not in 1933.

SPIEGEL: Shouldn't the world have seen it coming, the economic crisis we are now experiencing?

Ferguson: Of course, it has been clear since 2006. I know that for many people it doesn't feel that way. They are horrified because they were taken by surprise, and they are in a panic because the enemy comes from within. The system is the enemy. And they don't understand the nuances of the crisis, which makes them afraid.

SPIEGEL: In retrospect, historians are usually right. What did you foresee in 2006?

Ferguson: Excessive debt. The debts of private households and the financial institutions reached levels that could no longer be offset. Then came the bubble in the real estate market, when prices doubled even though the houses weren't worth the money. But most of all, there was the ignorance of the bankers, hedge fund managers and financial experts in the political arena, who did not want to recognize something that was plain as day.

SPIEGEL: Namely?

Ferguson: That a liquidity crisis could happen. That they would run out of money. "Impossible," everyone was saying at the time.

SPIEGEL: It sounds a little self-opinionated for you to claim that you had predicted all of this for years.

Ferguson: Oh, I've been wrong before. The thing I was wrong about was the trigger.

SPIEGEL: The trigger?

Ferguson: I had believed that the price of oil would be the cause of the world economic crisis, and that the necessary trigger would be a second defenestration, a second Sarajevo and perhaps even a war, a truly major war.

SPIEGEL: Iraq and Afghanistan don't count?

Ferguson: Too small. I had believed that a geopolitical event would lead to a credit crisis, but this crisis is so fundamental that it was capable of triggering itself. Money disappeared, and now companies can no longer refinance, can no longer borrow anything. Now it'll be bloody.

SPIEGEL: Are the bubbles happening with greater frequency than before, or is this just the way we perceive it? Or has the world economy consisted of a single super-bubble for some time now, as speculator George Soros says?

Ferguson: There have been bubbles large and small, again and again since 1700. First there was the tulip bubble and then, in 1890, it was all about the gold mines. No, we haven't even changed the rules of the game. If a central bank makes loans available to speculators at low interest rates, we have a bubble. Always, it's guaranteed. Yesterday, today and tomorrow again...

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