British historian Niall Ferguson followed 'the money' to New York, and told the US where it has gone wrong. Walter Ellis spoke to him for our series of controversial academic opinions on America.

Every life, every career and every passion has its high points. For Niall Ferguson, the time is now; the deal is in; the wheel is in spin... and everything is coming up roses.

Last year, there was his television series, accompanied by a bestselling book, on the history of the British Empire. This year it is Colossus: The Rise and Fall of the American Empire , also a book and series.

Since quitting the UK for the US in 2002, his world has been a blur of book tours and interviews, interspersed with teaching and punctuated by fortnightly flights home to his wife and children in rural Oxfordshire.

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As professor of financial history at New York University, with visiting rights at Stanford and Oxford universities, Ferguson, not yet 40, is in demand on both sides of the Atlantic. But there is no doubt where he has planted his flag. "Come to where the money and the power is," he was urged by Henry Kaufman, founder of NYU's Kaufman School of Business Administration. Ferguson's students promptly voted the immigrant economist New York's sexiest professor.

But the man ain't done yet. This autumn Ferguson cranks up yet another gear to become a tenured professor at Harvard, the world's number one university, with an endowment greater that the gross domestic product of many small countries.

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Last year, Eleanor Holmes-Norton, who represents Washington DC in Congress and has been voted one of the most powerful women in the US, said that winning her seat on Capitol Hill was nothing compared with her long uphill fight for tenure at Georgetown University, where she is professor of law.

But for Ferguson, glittering in the firmament, the path was cleared in advance. Before setting foot in Cambridge, he has been assured of a job for life.

"How could I say no?" he inquires, offering a smile as replete with disingenuous charm as that of Gilderoy Lockhart (the professor of defence against the dark arts at Harry Potter's Hogwarts school). In contrast to Lockhart, whose conjured-up curriculum vitae was his primary act of academic magic, Ferguson exudes not merely competence but a visionary insight into the way we live.

The Glaswegian-born historian is no neo-Conservative surfing in the slipstream of Dick Cheney and Paul Wolfowitz. Rather, he is self-consciously a member of the New Enlightenment. Had he been born French into an older generation, he would have loomed large in the fevered debates that enlivened Paris cafes' philos in the 1950s.

Ferguson had barely arrived in the US before he was invited to a reception at the White House. "I was never once invited inside Downing Street," he recalls, sipping a cafe latte sharpened by a double shot of espresso. "In America, the elite sees historical knowledge as important."

Colossus has aroused enormous interest in his adopted country. During our interview, sandwiched between presentations to the Carnegie Council and the US Naval Academy, Ferguson voiced his fear that critics would pounce on him for his insistence that the US confront in a serious way what would once have been described as the White Man's Burden. But his fears turn out to have been unfounded. They love the guy. They can't get enough of him. As we spoke, The New York Times rang to make sure he hadn't forgotten his keynote piece for the paper's Sunday edition.

Yet, popularity aside, Ferguson's diagnosis of why the US is not better at imperialism should be unpalatable in the States. The digested, Guardian -esque version of his Colossus thesis can be simply put: America is an empire in denial; because of its inherent attention deficit disorder, it cannot do what's right for more than a few months at a time. Only when politicians and the military settle in for the long haul and learn how to police civil society in crisis can they function properly as an imperial power.

There is room in his narrative for sideswipes at US trade and budget deficits and at the pretensions of European power, as well as part-economic, part-astrological predictions about the growth of India and China. But the meat of the book is that Americans will learn from history (and assume their full responsibilities) only when they take heed of histories other than their own, most obviously that of Britain.

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Ferguson is painfully aware of the dislike most Americans have of "abroad" and their unwillingness to put down roots anywhere outside the US. He contrasts this with the relish shown by Britons in their pursuit of the imperial dream. "They were ready to settle in for a century or more; for Americans a year away is a year too long."

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He sees, too, the way in which Washington, when confronted by an overseas crisis, closes ranks. "When you write about the US," he says, "you're taking on a Colossus. Debate on the Iraq crisis has been suppressed. The political elite has closed the debate down, leaving Bush and (Democrat presidential candidate) John Kerry to move into alignment over what to do next. The popular view is that the boys will be home for Christmas - which is pure fantasy. They have to realise that they may have to run Iraq as a mandate for decades."

Yet, paradoxically, even as he denounces the US for its critical absence of mind, he lauds its "vibrant" political culture. "What I do here seems to have far greater salience. People are passionately engaged by the arguments. The role of a public intellectual gets you access to the highest public fora, into decision-making and influence."

So which is it - engaged or disengaged? Ferguson, caught up in the world of his book tour, seems momentarily unaware of the contradiction.

But such seeming contradictions are perhaps unsurprising, given the revolution that Ferguson's life has undergone since he accepted Kaufman's invitation. A fellow of Jesus College, Oxford, he rose with indecent speed to become professor of political and financial history. His books, including a critically acclaimed study of German business and politics from 1897-19 and a two-volume history of the Rothschilds, were seen by the academic establishment as just the ticket for a young don on the make, and his The Pity of War: Explaining World War One showed that he had more than one string to his bow.

Diversions - what Graham Greene would have called "entertainment" - came in the form of Virtual History: Alternatives and Counterfactuals (1996), a book of historical what-ifs he edited that became a bestseller in Britain and the US. Perhaps aware of the risks of too much populist exuberance, he was also for a year the Houblon-Norman fellow at the Bank of England and soon after made his first excursion into America as a visiting professor of economics at NYU.

It was his initial brush with New York ("I had wanted to live there ever since I was 13 and saw Woody Allen's Manhattan ") that heightened his growing sense of disillusionment with England.

"All my work has a strong foundation in financial history. But at Oxford (where he read for his first degree before gaining a PhD at Hamburg University) most students I taught were innumerate. They had no idea of interest rates until they got their first bank statements. Here (in New York), the history of the Rothschilds is accepted as a serious, important subject. It's standing room only. The English, with their emphasis on class, regard discussion of money as vulgar. They want to study culture and language."

America provides an intellectual home, but on a personal level the transition has not been easy. Ferguson's wife, Sue Douglas (a senior executive with Conde Nast in London), and their two young children live in England. His British friends despair of him because he spends half his time in the US; his American friends wonder why he continues to spend so much time in England.

But once he has taken up his tenure at Harvard, everything, he hopes, will slip into place and acquire some permanence. America, for him, represents both the world's future and his own. As a workaholic who admires the way Americans buckle down and get on with things, he sees no insuperable difficulties ahead.

"I still have emotional ties to Oxford and nostalgia for the UK. But, from a work point of view, America is very satisfying. It may be exhausting, but it's never boring."

Colossus: The Cost and Benefits of the New American Empire is published by Penguin Allen Lane, ?20.00.

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