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Money: The Unauthorised Biography

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What is money, and how does it work? The conventional answer is that people once used sugar in the West Indies, tobacco in Virginia, and dried cod in Newfoundland, and that today's financial universe evolved from barter. Unfortunately, there is a problem with this story. It's wrong. And not just wrong, but dangerous. Money: the Unauthorised Biography unfolds a panoramic secre What is money, and how does it work? The conventional answer is that people once used sugar in the West Indies, tobacco in Virginia, and dried cod in Newfoundland, and that today's financial universe evolved from barter. Unfortunately, there is a problem with this story. It's wrong. And not just wrong, but dangerous. Money: the Unauthorised Biography unfolds a panoramic secret history and explains the truth about money: what it is, where it comes from, and how it works. Drawing on stories from throughout human history and around the globe, Money will radically rearrange your understanding of the world and shows how money can once again become the most powerful force for freedom we have ever known.


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What is money, and how does it work? The conventional answer is that people once used sugar in the West Indies, tobacco in Virginia, and dried cod in Newfoundland, and that today's financial universe evolved from barter. Unfortunately, there is a problem with this story. It's wrong. And not just wrong, but dangerous. Money: the Unauthorised Biography unfolds a panoramic secre What is money, and how does it work? The conventional answer is that people once used sugar in the West Indies, tobacco in Virginia, and dried cod in Newfoundland, and that today's financial universe evolved from barter. Unfortunately, there is a problem with this story. It's wrong. And not just wrong, but dangerous. Money: the Unauthorised Biography unfolds a panoramic secret history and explains the truth about money: what it is, where it comes from, and how it works. Drawing on stories from throughout human history and around the globe, Money will radically rearrange your understanding of the world and shows how money can once again become the most powerful force for freedom we have ever known.

30 review for Money: The Unauthorised Biography

  1. 5 out of 5

    Paul Fulcher

    Something of a mixed bag overall - in part because there are two books in one, a reasonably interest history of money and a rather simplistic polemic with his views on reform of the money system post the financial crisis. But overall, worth reading. The best part is where Martin provides a highly readable account of the history of money from the earliest days, including the evolving philosophy of how people thought about money. Although given how recently it is written it was a shame to see no co Something of a mixed bag overall - in part because there are two books in one, a reasonably interest history of money and a rather simplistic polemic with his views on reform of the money system post the financial crisis. But overall, worth reading. The best part is where Martin provides a highly readable account of the history of money from the earliest days, including the evolving philosophy of how people thought about money. Although given how recently it is written it was a shame to see no commentary on the new cyber-currencies such as Bitcoin - although he has since blogged on his views http://prod.wired.com/2014/03/bitcoin... He successfully refutes some well-trenched myths - for example he asserts, based on anthropological evidence, that money didn't evolve out of a barter system as is commonly thought, and he makes the point that the key to money is the decentralised transfer, with an agreed recording system, of an universally accepted measure of value. He also emphasis the importance of transferable credit as part of money supply and the key role of banks - albeit the Bank of England have recently written more cohrently about this http://www.bankofengland.co.uk/public... It is crucial to his theories that the choice of the economic value of money should be political not physical (he is no fan of the gold standard). But it is at this point that the history stops and the polemic starts - for example he regards central bank independence as misleading at best and dangerous at worst, and would clearly like to see government's instructing central banks to inflate away the current debt build-up. And he ends up with the old chestnut of "narrow banking" (aka the Chicago plan) presented as if it is the magic solution to 4000 years of monetary crises. I also found the style of the book a little grating after a while - there is too much meta-commentary including a rather annoying invented conversation with a friend (he is clearly a believer in tell them what you're going to tell them, tell 'em, and tell them you've told them).

  2. 5 out of 5

    Mehrsa

    This is the best--most clear and persuasive--history of money and economics I have ever read. And I read a lot about money and economics. There isn't a single sector or era or philosophy that he doesn't touch. My only complaint is that I didn't find this book sooner.

  3. 5 out of 5

    Alex Givant

    Excellent book about money and all stuff around it.

  4. 5 out of 5

    Michael Austin

    Anyone who takes even a few minutes to think about it can figure out how money evolved: it began in primitive barter societies where people exchanged what they had for what they needed. But this was too limiting, as I might not always have the thing that you need. So, gradually, people began to use other things--cowrie shells, salt, silver, or gold--as a sort of proxy that allowed for an organized, large-scale barter system. Gradually, we became comfortable with this medium of exchange, so we co Anyone who takes even a few minutes to think about it can figure out how money evolved: it began in primitive barter societies where people exchanged what they had for what they needed. But this was too limiting, as I might not always have the thing that you need. So, gradually, people began to use other things--cowrie shells, salt, silver, or gold--as a sort of proxy that allowed for an organized, large-scale barter system. Gradually, we became comfortable with this medium of exchange, so we continued to make it more abstract. Gold became bank notes backed by gold, which became checks, which became credit cards, which eventually became a system of computerized credits and debits many levels removed from the basic barter economy that they represent. But at the core of money there still lies an exchange of valuable goods and services between people, facilitated by a monetary apparatus. This history of money is intuitive, well-documented, frequently taught, and, according to Martin, completely wrong. And he makes a very strong case that we should stop thinking about money that way. The problem with the standard narrative is that it treats money as a unit of value rather than as a technology for social exchange. If money has some kind of inherent value--even an inherent value that has been abstracted many times since the days of exchanging chickens for strawberries--then the essential problem of monetary policy is how to create an environment in which the "true value" of money can be expressed. But if money is essentially a facilitator of social exchange, then the essential problem of monetary policy is deciding what kind of society we want to b This all goes back to the early barter economies, where the standard narrative of money affixes its inherent value. As it turns out, there never actually were barter economies. People have always traded this for that, of course, but we have no evidence that such exchanges were ever the basis of an economic or social system. This is just the economist’s version of the mythical “state of nature” where everybody interacted without any kind of social organization. But there has never been an original state of nature either. We can go all the way back to chimps and bonobos, and there is always a social organization. And the social organization is always based on promises, obligations, and reciprocal duties. And it is these that are, in Martin's revisionist narrative, the real origin of money. In pre-monetary societies (which was pretty much every society before the Greek and Ionian city states starting around the 6th century BCE) obligations and promises were structured differently, but they still existed, and people kept track of them (indeed, some anthropologists believe that keeping track of such things drove much of our cognitive evolution--see Robin Dunbar's Grooming, Gossip, and the Evolution of Language). These obligations and responsibilities often took the form of religious sacrifices (which had the effect of redistributing foodstuffs through the cultic center), marital settlements, and reciprocal duties in hierarchical relationships. When obligations and reciprocal responsibilities become “debts,” and are accounted for in a systematic way, they can be monetized and exchanged. Money is a way to organize social responsibilities in a large society by converting those responsibilities into units that can be tracked and exchanged. For money to exist, then, there must be three things present in a society: 1) The idea of a “universally accepted unit of value,” which means that anything that someone promises to do for, or give to someone else can be assigned a value of X number of units; 2) The ability to keep track of who owes what to who; and 3) The ability to transfer obligations with the confidence that the promises embedded in them will be always be honored. Martin's history of money begins in about 600 BCE, when the highly developed accounting systems of the Fertile Crescent (Babylon and Persia) came into contact with the nascent Greek concept of universal value. This is why the first coins that we know about trace back to the Ionian kingdom of Lydia in about 590 BCE. Lydia (in Modern Turkey) was situated in between the Greek and Persian worlds, and the two most famous Lydians in history--Croesus and Midas--are probably also the two most famous cautionary tales in history about the dangers of a money economy. What this means in practice is that the things we consider the most abstract about money are the things that have always been there. Money has always been a promise to pay something that could be recorded and transferred. This aspect of money existed before gold coins, or anything else, became the most common way to do the recording and the transferring. And these tokens have never been necessary to the essential function of money (which is why about 90% of the "money" in the United States, and 97% in the United Kingdom, exists as nothing more than computerized accounting entries). It is the promises, not the exchange tokens, that make money. And it is faith that the promises will be fulfilled, not a certain amount of gold, that gives money its value. This need for confidence is probably the most important difference between Martin's narrative of money and the "standard version" that I began this review with. The standard version assumes that money has always represented some innate, natural value--either the value of the gold or silver it is composed of, or the value of the gold or silver that backs it, or the value of the goods or services that were once traded by barter. The new narrative rejects this origin of money and, by doing so, rejects nearly all of the assumptions of most modern monetary theories and policies. As Martin himself puts it, paraphrasing the 19th century economist Walter Bagehot: If money is in essence transferable credit—rather than a commodity medium of exchange, as the academic economists insisted—then fundamentally different factors explain the economy’s demand for it. Meeting demand for commodities is a simple matter of ensuring a sufficient supply on the market. When it comes to transferable credit, however, volume alone is not enough: the creditworthiness of the issuer and the liquidity of the liability come into play. And both these factors are determined not technologically or physically but by the general levels of trust and confidence. (198) These different ways of understanding money have profound consequences for governments and policymakers. As long as money has inherent value, then the job of policymakers is to simply create the conditions in which the actual value of money can be expressed. But if money is primarily an extension of personal obligations that we have to each other, backed by the confidence that these obligations can be exchanged and honored, then the job of economic policy is to create trust and confidence. These are fundamentally different ways of understanding, not just money, but the role of government. What ultimately emerges from Martin's analysis is a sort of historical competition between these two very different ways to view money: money as a thing that represents value, and money as a technology that organizes social interactions. The differences are profound. Under the former view, for example, the cause of poverty is that people do not produce anything of value. Under the latter view, the main cause of poverty is that people don't have money. In Martin's narrative, the two views dueled for about 300 years, with the second view always being articulated by somebody, but the first view winning out because it was more philosophically compatible with the values of the Enlightenment. Over time, though, the tendency of money economies to accumulate debt lead to the growth of a largely unregulated debt management industry that collapsed in 2008 and vaporized trillions of dollars, forcing governments to bail out financial industries that had emerged in the shadows of their monetary policy and thereby combining the worst aspects of both command and laissez faire economies by socializing risk while privatizing profits. In effect, what happened in the events leading up to the crash of '08 was that the banking industry was treating money as negotiable obligation, while governments and regulators were treating it as something with inherent value. To put this another way, money was acting like the thing that it is, and governments were treating it like the thing it was supposed to be. The only way out of the trap, he suggests, is to flip the lens and acknowledge that money is a social and political construction that organizes social relationships and not a abstract reflection of something called "real value." I found Martin’s arguments very compelling, and I was impressed by his handling of the sorts of texts not normally associated with economics: Homer and Aristophanes, Dickens and Shakespeare, Cicero and Caesar--they all give us hints about how money worked at certain times in history, and he is as comfortable with them as he is with Adam Smith and Karl Marx. But where I found Money: The Unauthorized Biography the most compelling was in its author’s ability to balance a sterile (if essential) discussion of monetary policy with a deep understanding of the social relationships that make money, well, money. He helped me grasp, in a way that I never had, the fact that money is essentially a mechanism for social interaction between actual human beings and that many of the problems that we associate with it are actually problems with the way we interact with each other.

  5. 5 out of 5

    Muath Aziz

    What is money? The classical view (Aristotle and Adam Smith etc) is that in ancient time economy was Natural/Barter system where you give cow milk to the baker in exchange for bread. Then humans found out that the system was not flexible so the rare robust gold was used. This was proven to be a common misunderstanding, there have never been a Barter Economy in human history! There is a difference between money and currency: "money is the system of credit accounts and their clearing that currency What is money? The classical view (Aristotle and Adam Smith etc) is that in ancient time economy was Natural/Barter system where you give cow milk to the baker in exchange for bread. Then humans found out that the system was not flexible so the rare robust gold was used. This was proven to be a common misunderstanding, there have never been a Barter Economy in human history! There is a difference between money and currency: "money is the system of credit accounts and their clearing that currency represent". So basically, currency (like the dollar bill) is just tokens representing the money. In modern times, we don't even bother with these tokens: "around 90% of US money has no physical existence at all!". Irish banks closed for a long period in 1970s due to workers strike. No one had cash, yet economy had grown! Why? Because they used cheques instead, remember that cash is just a token (same case with Yap island and its awesome big rocks currency). "Currency is ephemeral and cosmetic: it's the underlying mechanism of credit accounts and clearing that is the essence of money". In Iliad and Odyssey, there was no mention of money. Ancient Greek consisted of small tribes where they shared everything (socialism) and exchanged gifts with other tribes, so there was no need for money. But Uruk of Mesopotamia (a big city, not a small tribe) and its clay tables taught us this: Not all writing systems started as Pictography, Mesopotamians used abstract writing, numbers and words (kinda). This led to them developing Literacy, Math, and Accounting. So for example, if I sell you 3 goats, a symbol representing the number 3 and a symbol representing a goat will be drawn in the clay table to record the transaction. But is the symbol representing the goat shows the goat phonologically or is it shaped like a goat? If the latter then it's Pictography. Actually, it was Cuneiform, a primitive alphabet system. Why did Mesopotamia had some kind of money/exchange/accounting but Greece didn't? Mesopotamia had individuality, a person can work harder and have more stuff, Greece treated everyone equally. But, even though Mesopotamia had literacy, it didn't develop the concept of universal value among different commodities where tokens represent this value, so Mesopotamia didn't develop money. On the other hand, Greece did have the concept of universal value, but lacked literacy, so it too didn't develop money. ----- We have standardized measurements (SI measurements), since they are physical concepts, but we can't standardize money (which is an economic value, a social concept). At the same time Aristotle developed his idea of money being a flexible way for bartering, the ancient Chinese political and philosophical book Guanzi stated that "money's value was directly proportional to how much of it was in circulation compared to the quantity of goods available. This is a very advanced thought honestly! Guanzi suggests that the sovereign shall control the liquidity of currency, making more or less cash to circulate among society, in order to make prices go up (inflation) or down (deflation), whatever he sees fit for the economy. This has political consequences: to have sole power in minting money is to have sole power in controlling the economy. Kings and governments did take advantage of controlling currency, where for example 10 cents copper coin cost only 1 cent to make, so 9 cents are earned by the king for each coin minted. Even to this day this practice, so called Seigniorage, earns US government 25 billion dollars annually. Then around the middle ages, a kind of banking system was developing, crediting became so common. "any IOU has two fundamental characteristics: its creditworthiness (how likely it is that it will be paid when it comes due) and its liquidity (how likely it can be realized, either by sale to a third party or simply by coming due if no sale is sought)". Also, to make cross-Europe trade flexible, banks started issuing their private internal currency (ecu de marc) where a merchant from France can go to his local bank to take a loan (he had to be creditable person) in the form of this special currency, then reimburse it Italy and buy merchandise from there and go back to France, selling those merchandise and paying back his loan and keeping his profit. It would've been difficult to trade for the merchant if it weren't for these banks agreeing on their private shared currency where they would meet quarterly to balance their books. Virtually, (indirect) currency exchange was born. This meant that the sovereign no longer had full control over the economy since he no longer sole controller of currency. At the end of seventeenth century, the king of England lacked money, national lottery was invented, along with government bonds and some kind of public banking. Also, English economy was suffering from high inflation which meant that silver coins had greater value if melted (which also means that seigniorage was a negative value). Locke argued in front of the parliament that coins lost their wight in silver, the solution was to remint coins to their proper weight. Many argued against Locke but his reputation made him win. This was an obviously naive backward understanding of money and made things worse. In 1840s when Ireland had famine because of bad year harvest, English economists were against helping them, they deeply believed in Adam Smith ideas of "letting the economy adjust itself". They didn't think of the morality of their actions, they only saw numbers. ----- Soviet Union tried to abolish money, since a utopian society didn't need it (Plato in his Republic agrees to some extent, but still believes money has to exist). This wasn't a very radical idea. While neighboring states like Athens had money, Sparta was against using money. Banks were nationalized and abolishing money was in action. Lenin on the other hand believed that moving to true socialism will take time (he even believed society had to go through Capitalism btw). And until they achieve world success, money, the greatest weapon of bourgeois class, need to exist, "when you live among wolves, you must howl like a wolf" Lenin said. There was a spectacular collapse in agriculture and industrial output. Completely revised monetary policy was unveiled, banks were back, and money was not to be abolished after all. Btw, I read once that Cuba after their revolution tried to get rid of their currency, it was catastrophic. Now Cuba has a very bad unfair system of two currencies. Locke's ideas of "money is just silver" and Soviet Union ideas of abolishing money altogether were both wrong. A third solution would be fiat money. A young Scotsman named John Law had the opposite idea of Locke but no one home listened to him. He managed to apply his ideas in France where the french king had a hugh debt. To have large public corporation where debt translated into equity, a radical successful idea. And gold standard was abolished, Law argued that it didn't make sense if a prosperous nation had scarce gold and silver resources, so the solution is to put control of money quantity under the king and not under silver supplies. The corporation was overvalued and when the bubble burst, people blamed it on the fiat money, Law barely escaped his death and this solution was only implemented again after two and a half centuries (1973). One of the issues Law system had, was that it is in the hands of the king to adjust the market. The market shall adjust itself, surprisingly like what 594 BC Greece did. Jews "shook off" debts every 50 years as Torah teaches. In ancient Mesopotamia, the god-king would from time to time abolish some or all debt. John Locke, Adam Smith, and John Stuart Mill were all trying to fix the economy top-down, to adjust the economy to fit their abstract ideas. Walter Bagehot (born in 1826) didn't get formal economic education but he learned it be practice. He witnessed many bubble bursts which motive him to educate politicians by writing his simple and brilliantly named book, Lombard Street. He understood economics bottom-up, insisting that money is money, not silver. Why do markets collapse? Not because that the gold behind the money caused the issue; it was loss of trust and confidence. ----- The author then gives a comprehensive overview at economical collapses and measurements governments did to prevent and fix. One of the problems is that the common understanding of the economy is flawed, and it's all Locke's fault it seems. Even though many solutions to our modern economical problems where already outlined many centuries ago, traditional classical understanding of the market still persist. I personally believe (please note I didn't win a Nobel prize for Economy) that most of the effort to fix the economy is done to the symptoms, not the root cause. Combine that with the naive top-down understanding for Economy. Economy is a social aspect, just like language, it involves humans so it needs to be studied bottom-up. This is the good ol' Idealism vs Empiricism. Also, the cycle of giving loans that accumulated to the point that the reset button (were it be every-50-years or the bubble-bursting-market-it-adjust-itself) was needed to be pressed, is inescapable. The core flaw of economy can not be escaped, unless interest was abolished, which is even more ridiculous. The last chapter was hilarious tho!

  6. 5 out of 5

    Pete

    Money : The Unauthorized biography (2013) by Felix Martin is a decent book that looks at the history of money and then goes on to make various recommendations of dubious merit. The book starts with a contrived dialogue about what money is. Martin then goes on to describe how money is more than just a medium of exchange and the history of the use of money. When the book is looking at the historic side of money from Ancient Greece to the founding of the bank of England the book is really interesti Money : The Unauthorized biography (2013) by Felix Martin is a decent book that looks at the history of money and then goes on to make various recommendations of dubious merit. The book starts with a contrived dialogue about what money is. Martin then goes on to describe how money is more than just a medium of exchange and the history of the use of money. When the book is looking at the historic side of money from Ancient Greece to the founding of the bank of England the book is really interesting. The book goes on to suggest that a major cause of the GFC was a misunderstanding of money. The myriad of other possible causes are not mentioned. Martin goes on to state that central banks should be returned to political control. He ignores the reasons why independent central banks have been set up. He seems to be assuming that we have philosopher kings who will wisely set interest rates and manage money. The experience of massive inflation in many countries all around the world doesn't get much consideration and seriously undermines this idea. The book concludes with another stilted dialogue where the author winds up the book. It's pretty silly and rarely, if ever works as a technique. The history section of the book is good, the sections that venture into the twentieth century are recommendations for today are weak. But the book does make you think about money and suggests further reading.

  7. 4 out of 5

    Mal Warwick

    You get what you pay for with Money. Yes, this book really does tell the story of money from its origins in Mesopotamia and Greece thousands of years ago to today’s endlessly complex international economy. At times, the book is rough going. It appears to have been written by a Ph.D. in economics who may presume a little too much about the ability of the general reader to engage in the sort of mental gymnastics necessary to understand the money market. Still, the storyline is clear: this is the t You get what you pay for with Money. Yes, this book really does tell the story of money from its origins in Mesopotamia and Greece thousands of years ago to today’s endlessly complex international economy. At times, the book is rough going. It appears to have been written by a Ph.D. in economics who may presume a little too much about the ability of the general reader to engage in the sort of mental gymnastics necessary to understand the money market. Still, the storyline is clear: this is the tale of how philosophers, businesspeople, financiers, and politicians have engaged in a debate over the centuries about the nature of money — with the wrong definition emerging as orthodoxy, according to the author, Felix Martin. That misunderstanding of what money is and isn’t has had doleful consequences, he asserts — including the Great Recession sparked in 2008. Through the ages, Martin argues, the predominant view of money is that it is a commodity — a thing like any other — used to facilitate exchange. “The problem,” Martin writes, “is that money is not really a thing at all but a social technology: a set of ideas and practices which organise what we produce and consume, and the way we live together. When it comes to money itself — rather than the tokens that represent it, the account books where people record it, or the buildings such as banks in which people administer it — there is nothing physical to look at.” By contrast, the alternative view — the correct one, in Martin’s view — is that money is simply a form of credit, an IOU. Coins and currency are simply representations of money; so are bonds, letters of credit, commercial paper, and other financial instruments that facilitate trade today. Once upon a time (actually, before 1973, when Richard Nixon took the US off the gold standard) money was given value by precious metals, either silver or gold. This led to what Martin sees as confusion, giving kings, bankers, and the practitioners of that dismal new social science, economics, reason to believe that money possessed some objective reality quite irrespective of the parties to any financial exchange. Many policymakers today, including (I deduce) those in the (US) Republican and (UK) Conservative parties, still make that same mistake, which has led them to shrink the money supply when it should be expanded and focus on specific inflation targets when they should instead pay the most attention to providing enough credit for business to grow and consumers to buy its products. Why? Because “hoping that the market mechanism will impose limits on itself is a pipe dream.” For example, it was these mistaken policies that helped turn the Crash of 1929 into the depths of the Depression. Although much of Money relates the intellectual back-and-forth among philosophers, economists, and politicians, Martin manages to lift the discussion well above the level of an economics textbook by bringing to life the circumstances and ideas of the principal debaters. Among the stars in Money are familiar 20th- and 21st-century figures such as John Maynard Keynes, Milton Friedman, and Lawrence Summers. However, Aristotle, Plato, Adam Smith, John Locke, John Stuart Mill, Walter Bagehot, and other influential thinkers from the past join the cast, too. Martin pays special attention to Locke and Bagehot, who represented opposing poles in the debate about the nature of money. Much of Money is devoted to answering a question posed by Queen Elizabeth II to the faculty of the London School of Economics just seven weeks after Lehman Brothers had collapsed and sent the world economy into a tailspin: “why had none of them seen the crisis coming?” The answer they gave half a year later was “that nobody had seen the big picture: that whilst ‘[i]ndividual risks may rightly have been viewed as small . . . the risk to the system as a whole was vast.'” But Martin regards Alan Greenspan’s answer in testimony before the US Congress as far more satisfactory: “He did not deny that his job had been precisely to understand how the economy worked as a whole. The problem was, he explained with admirable honesty, that his understanding had simply been wrong.” Felix Martin knows whereof he writes. He describes himself as a macroeconomist and bond investor, who happens to have a Ph.D. in Economics from Oxford University. Money is his first book.

  8. 5 out of 5

    José Sousa

    Excellent account of what is money!

  9. 5 out of 5

    Noufal

    This was an excellent book. I highly recommend it to anyone who wants to understand how money (as a social technology) works. Martin builds up the knowledge one needs to understand his thesis very systematically. His explanations along with the historical sources for them are quite solid and one can follow through the book quite satisfyingly. By the time you're done, you'll have a good grip of his ideas. He's also good at the craft of writing. Most of the chapters end with a little cliffhanger w This was an excellent book. I highly recommend it to anyone who wants to understand how money (as a social technology) works. Martin builds up the knowledge one needs to understand his thesis very systematically. His explanations along with the historical sources for them are quite solid and one can follow through the book quite satisfyingly. By the time you're done, you'll have a good grip of his ideas. He's also good at the craft of writing. Most of the chapters end with a little cliffhanger which kindles an interest in what's going to happen in the next. There's just enough repetition in the book to drive home the important ideas without being too boring. The book is bracketed by a conversation between the author and his (perhaps fictional) friend. The beginning serves as a taste of things to come and the final one is a good summary of the large ideas. I found this doubly useful since it served as a starting point for various ideas and concepts in economics that I wasn't used to. The final one third of the book is weaker than the rest. Partly because the ideas presented are subtle and complicated to a layman like me. However, it also feels a tad rushed. The relaxed but tight pacing of the initial parts of the book is missing here. This could also be because of my lack of familiarity with the material. These parts deal with the banking system which has always been opaque to me. On the overall, a very useful book not just to read but to own given the way money is changing so much in our lives.

  10. 5 out of 5

    Karel Baloun

    Ends with a delightfully direct explanation for financial crises: a lack of demand, which turns into a lack of confidence in the value of business and credit. Money is just trusted credit, and pretending it is hard (specie, metals) is an easy to explain fraud, used to buttress the current power and control of those who have money. Explains why QE^n is likely to continue, globally, until demand is adequate to enable near full employment. Technical automation and increasing productivity just add pr Ends with a delightfully direct explanation for financial crises: a lack of demand, which turns into a lack of confidence in the value of business and credit. Money is just trusted credit, and pretending it is hard (specie, metals) is an easy to explain fraud, used to buttress the current power and control of those who have money. Explains why QE^n is likely to continue, globally, until demand is adequate to enable near full employment. Technical automation and increasing productivity just add pressure to inflate currency, since the volume of "consumer surplus" increases, without enabling demand from underemployed members of society. The increasing income&asset gaps along with the control of democratic politics by the monied elite, threaten stability. fortunately, reforms will come, and until them monetary policy will force inflation. Can our natural environment and its free services sustain itself until necessary reforms happen? The final chapter, itself even alone, is brilliant.

  11. 4 out of 5

    Iamreddave

    This is the best book I have read so far this year. One by one all the stories I was told about money in school are dismissed using history and anthropology. Barter happened first, Money has to be transportable tokens. Money was always precious metals etc. Are gone through one by one. Then follows various rogues, scammers and incorrigible bankers in a really entertaining and persuasive book. In terms of similar and good books I have read. A more conventional view is The Undercover Economist Strike This is the best book I have read so far this year. One by one all the stories I was told about money in school are dismissed using history and anthropology. Barter happened first, Money has to be transportable tokens. Money was always precious metals etc. Are gone through one by one. Then follows various rogues, scammers and incorrigible bankers in a really entertaining and persuasive book. In terms of similar and good books I have read. A more conventional view is The Undercover Economist Strikes Back: How to Run—or Ruin—an Economy by Tim Harford. And a book on the social aspects of something i hadnt thought of as social is What Technology Wants by Kevin Kelly

  12. 4 out of 5

    Douglas

    Economists don't even know what money is. This book will open your mind to a rich world of money theory, philosophy and reality. In places it is dense like a textbook, but well worth reading if you want to truly understand the amazing world we have created with this virtual medium of human exchange.

  13. 5 out of 5

    Kevin Varney

    Pretty good. In my review I don't think I have misrepresented the author, but I may have done. The concepts are sometimes a little slippery to grasp, but I think I understood most of it. I enjoyed all the literary references, like the story about the post-revolution Russian conman who succeeds in forcing another conman out of his money, only to find he can't actually spend it, because everything is reserved for Soviet functionaries. This is another book that says neo-classical economics is rubbi Pretty good. In my review I don't think I have misrepresented the author, but I may have done. The concepts are sometimes a little slippery to grasp, but I think I understood most of it. I enjoyed all the literary references, like the story about the post-revolution Russian conman who succeeds in forcing another conman out of his money, only to find he can't actually spend it, because everything is reserved for Soviet functionaries. This is another book that says neo-classical economics is rubbish. He argues that money is a social technology, the value of which cannot be fixed, against a pound of silver for instance. He says John Locke was wrong for saying it was, and that this view of money causes problems to this day (he also says J.S. Mill was wrong in his classical view of economics, which by coincidence I will be reading about next). Money is a way of transferring credit between people or institutions. People need to trust it, or people won't accept it as payment or be able to spend it themselves. The author referred to an island in which wealth was represented by a stones which were too heavy to move, but everyone knew each other, and could work out what they owed each other and whether their credit was still good. Likewise Medieval merchants could buy and sell goods between one state and another using bills of sale, which they could transfer between each other and settle their accounts at an annual fair. On a wider scale, government money tends to be more trusted. The author says a government should be willing to intervene by changing monetary value for the public good, or to let inflation to run for a while to reduce debt. There is a lot of history in the book. I was amused by Cicero and Tacitus complaining about the intrigues and evasions of the money lenders. I suppose I was most interested in Walter Bagehot's analysis of the banking crisis of 1866. He said in a banking crisis the national bank should be prepared to honour the loans made by other banks in order to stop panic crippling the monetary system. The problem with the 2008 crisis was that the central banks had to bale out not only banks with a liquidity problem but also those that were insolvent because of all the hidden debt in the newfangled financial products the finance sector had dreamed up in the previous couple of decades. The author suggested we go back to a system similar to what we had before, where banks that deal with customers and businesses are legally separated from other institutions that deal with speculative financial products. Fair enough, but I prefer the C14th Catalan response of publicly beheading the CEOs of failed banks. I think that would resolve the moral hazard problem.

  14. 4 out of 5

    Zihad Azad

    I am at a loss about how to rate this book since the utility it offers is highly skewed on one side while it tapers off pretty quickly towards the end. "Money: an unauthorized biography" is the definitive book on the origin of money and how monetary society deposed traditional society. It pits the conventional Smithian view of money as a mere commodity medium of exchange against the alternative view of money as a social technology. The conventional view holds that money gradually came about to e I am at a loss about how to rate this book since the utility it offers is highly skewed on one side while it tapers off pretty quickly towards the end. "Money: an unauthorized biography" is the definitive book on the origin of money and how monetary society deposed traditional society. It pits the conventional Smithian view of money as a mere commodity medium of exchange against the alternative view of money as a social technology. The conventional view holds that money gradually came about to ease the burden off of barter economy. But as the book points out, there's a resounding lack of evidence to substantiate this claim. Rather, money, as a social phenomenon, can be viewed to comprise of three components: an abstract unit of value in which money is denominated, a system of accounting and the tranferablity of credit. In short, money is the unit of measurement that reckons a universal economic value, much in the same way a meter is a unit of linear extension which measures heights and depths. The first 10 chapters delineates this monetary theory in a cogent, albeit somewhat abstruse, manner. The first challenge is to set a monetary standard. And herein lies the beef between the traditionalists and the radicals. And the bulk of the blame has been heaped upon John Locke and his stubborn insistence to peg the pound to gold so that the sovereign has zero control over the monetary standard. He did so out of a misplaced sense of political liberalism, applied unfashionably to financial economics. And the book goes on great length to show that how this conventional way of perceiving money as a mere commodity rather than a social technology had a pervasive influence over the entire monetary society. All these were very convincing. However, I balked when I saw that he was trying to transfer the blame of the 2008 financial crisis on this conventional monetary theory. Although he did emphasize the importance of regulating the banking sector, his hollow insistence that a misplaced monetary theory caused the housing bubble is, and I say this seriously, utter bullshit. And this is where the book started to lose me. If he finished off the book at the turn of the 18th century when Locke won his crusade over Lowndes, I would have given it a 5 star rating. But sadly, the writer continued, only to reveal his true identity. And this only backstopped my belief: Center right economists are the most dangerous kind!!

  15. 4 out of 5

    Don

    This is a deep take on what the brilliant Felix Martin identifies as the real economic problem in the world: a near-universal misunderstanding of what in the hell money really is. The biographical aspects of money are the strength of this story, but along the way there is a fair amount of jargon, inside baseball, and what hit me as just showing off. Some of the philosophical and theoretical threads were just too arcane for me ... although that could be my fault, I don't think so. One problem was t This is a deep take on what the brilliant Felix Martin identifies as the real economic problem in the world: a near-universal misunderstanding of what in the hell money really is. The biographical aspects of money are the strength of this story, but along the way there is a fair amount of jargon, inside baseball, and what hit me as just showing off. Some of the philosophical and theoretical threads were just too arcane for me ... although that could be my fault, I don't think so. One problem was that the whole book came across as a definitive repudiation of what he described as a universal misunderstanding of the definition of money ... Except that the definition he subscribes to is one that I had no idea is such a minority view. He does a nice job of tying it to our recent unpleasantries and showing that banks really ought go stay in the business of banking rather than performing financial gymnastics while the public props them up no matter the risks. His argument reminds us that sovereign support for money also comes with sovereign power to manage -- yes, even regulate -- the markets represented by that money. He cites "ignored geniuses" such as Polish economic theorist Witold Kula, previously discredited Scottish. economist John Law, 1840s Economist writer Walter Bagehot, and John Maynard Keynes, and that understanding these guys provides a clearer opportunity to understanding the role of money in a society. Alrighty then. He might also have pointed to contemporary Nobel Prize winner Paul Krugman, who writes about this ongoing struggle with the titans of industry and government in his books and NY Times column. By the way, the gist is that money, in and of itself, is not the thing, but merely represents the promise of an agreed upon value of goods and services in a society. Promise" is the key word, not "representative" of some other tangible object. Various wonderful anecdotes and historical fragments help to tell the story, but I wanted more of that and less of Martin arguing with the classical school of economics that traditionally tied money to the gold or silver standard. By and large, this is a good, interesting idea and book that might have been meant for a deeper financial and economic thinker ... But even though I couldn't quite dance to it, it had a good beat, and so I give it a three.

  16. 5 out of 5

    Ron

    A wide-ranging discussion of the history of humans' notions of what money is, how it operates, how it is controlled, why we use it, and how we determine money's worth. The discussion ranges through how ancient cultures regarded money, how some cultures have done without money, how money encompasses both abstract philosophical ideas, and very practical notions of exchange. Does money have intrinsic worth? No, it is all dependent on the faith of people in the stability of the entity that issues th A wide-ranging discussion of the history of humans' notions of what money is, how it operates, how it is controlled, why we use it, and how we determine money's worth. The discussion ranges through how ancient cultures regarded money, how some cultures have done without money, how money encompasses both abstract philosophical ideas, and very practical notions of exchange. Does money have intrinsic worth? No, it is all dependent on the faith of people in the stability of the entity that issues the money. Yes, if it is backed by precious metals (which, of course, have little practical value or use in themselves). Read as a recorded book, well read, though rather slowly and at times ponderously , by Nicholas Guy Smith, a Brit. An enjoyable if somewhat esoteric read. I will remember the discussions of how money and credit were formalized by the Sumerian development of writing and bookkeeping, which formed the basis of all future economics. I will remember the good discussion of John Law and the Mississippi bubble, and the on-going debates between "gold bugs" (those who want a return to the gold standard to support money with precious metals) and those who see money as an abstract but solidly accepted means of social engineering. The book ends before the recent turn by some nations away from physical currency at all, to a reliance on electronic bank transfers only.

  17. 4 out of 5

    Nathan Simmons

    Fantastic exposition and History Reads like a novel! I’m very impressed with how the author took what could be considered a very dry topic and made it riveting. Money as social credit is a powerful understanding. On the one hand - it is encouraging that there are ideas out there already that could solve many of the current problems inherent in our system of banking and communal understanding of money itself. On the other, the task of educating everyone who needs to know this is a bit intimidatin Fantastic exposition and History Reads like a novel! I’m very impressed with how the author took what could be considered a very dry topic and made it riveting. Money as social credit is a powerful understanding. On the one hand - it is encouraging that there are ideas out there already that could solve many of the current problems inherent in our system of banking and communal understanding of money itself. On the other, the task of educating everyone who needs to know this is a bit intimidating. I highly recommend this thought provoking book. This and Debt: the First 5,000 years by David Graeber are completely fascinating strolls through history and monetary theory. For a contrasting ( and perhaps complementary ? ) view - I would also recommend “The Bitcoin Standard” by Saifedean Ammous.

  18. 5 out of 5

    Andrew Davis

    An interesting account of money and its role throughout the ages. It starts with demolishing a popular theory that people utilised barter before the money economy. It then proceeds to describe a system of public finances that operated in England between the twelfth and the late eighteenth century, and based on the wooden sticks. The history of money follows from its introduction around sixth century BC, till the modern era. This then leads to a discipline of economics and its founding fathers. O An interesting account of money and its role throughout the ages. It starts with demolishing a popular theory that people utilised barter before the money economy. It then proceeds to describe a system of public finances that operated in England between the twelfth and the late eighteenth century, and based on the wooden sticks. The history of money follows from its introduction around sixth century BC, till the modern era. This then leads to a discipline of economics and its founding fathers. One of the interesting practicians - Walter Bagehot is introduced and his views on money are discussed. Finally, the problems with the modern macroeconomics are identified, especially its oversight of finance, which is argued led to the 2008 crash.

  19. 5 out of 5

    Chris Baker

    If you're interested in finding out what money is and how it works, look no further. Martin also provides a short history of banking and debt crises, all as a precursor to identifying what went wrong in 2008 and how to fix it. It's all fascinatingly presented and emgagingly illustrated with examples, from the giant stone credit wheels of Yap islanders to post-credit crunch monetary policy. As such, Money makes for a powerful and persuasive polemic, in line with a new generation of broader, altern If you're interested in finding out what money is and how it works, look no further. Martin also provides a short history of banking and debt crises, all as a precursor to identifying what went wrong in 2008 and how to fix it. It's all fascinatingly presented and emgagingly illustrated with examples, from the giant stone credit wheels of Yap islanders to post-credit crunch monetary policy. As such, Money makes for a powerful and persuasive polemic, in line with a new generation of broader, alternative economic thinking by the likes of Ha-Joon Chang. About time too, although it remains to be see how far and how quickly these approaches can infiltrate the mainstream and change the tide in policy and practice.

  20. 4 out of 5

    Sachin Yadav

    In general, money is thought as just another commodity which facilitates exchange. This is basically what is taught in schools. This book by Felix Martin dismissed all those miniature concept about money. It presents a brief history of development of monetary society since the medieval times to the date. It accounts the events of how misunderstanding of money has caused numerous financial crisis through the history, from Mesopotamia and Greek societies to 2008 financial crises, and how these inev In general, money is thought as just another commodity which facilitates exchange. This is basically what is taught in schools. This book by Felix Martin dismissed all those miniature concept about money. It presents a brief history of development of monetary society since the medieval times to the date. It accounts the events of how misunderstanding of money has caused numerous financial crisis through the history, from Mesopotamia and Greek societies to 2008 financial crises, and how these inevitable events can be eschewed by learning the history of monetary evolution. I will highly suggest this book to people who have interest in finance and economics.

  21. 5 out of 5

    Peter Hatfield

    3.5 stars A persuasive argument against the classical view of the origins of money and the notion that economics is a natural science. In many sections the author takes for granted that readers will follow his mental gymnastics as he describes different theories of money and intricate credit systems in various historical settings. I think he could've benefitted from dumbing things down and streamlining his message for slow guys like me. I'm happy this book was written, though, since not enough ha 3.5 stars A persuasive argument against the classical view of the origins of money and the notion that economics is a natural science. In many sections the author takes for granted that readers will follow his mental gymnastics as he describes different theories of money and intricate credit systems in various historical settings. I think he could've benefitted from dumbing things down and streamlining his message for slow guys like me. I'm happy this book was written, though, since not enough has been said about the egregious failings of neoclassical economics.

  22. 5 out of 5

    Jordan Buckley

    Big idea: money isn't a commodity medium of exchange, it's a social technology: transferable credit. The monetary system can and should be regulated and manipulated to maintain a healthy economy. The parts on the history of money and credit are interesting and insightful, but it's a bit too flowery and polemical to recommend as a history of money, which I was looking for. He argues for maintaining the capitalist system but with more regulation of finance and intervention in the money supply to s Big idea: money isn't a commodity medium of exchange, it's a social technology: transferable credit. The monetary system can and should be regulated and manipulated to maintain a healthy economy. The parts on the history of money and credit are interesting and insightful, but it's a bit too flowery and polemical to recommend as a history of money, which I was looking for. He argues for maintaining the capitalist system but with more regulation of finance and intervention in the money supply to stave off a socialist revolution as inequality rises.

  23. 4 out of 5

    Peter

    There were points in this book that were extremely interesting and engaging and then other points that I found ungodly boring. I think it was well written and had some creative structuring and I realize that part of my rating is because I'm not that interested in some of the topics presented. All in all, I'll take away a few of the basic principles of this book but a lot of the details will just fade away.

  24. 5 out of 5

    Leila

    UNFINISHED BOOK Reading the table of contents and maybe a few sentences I can tell this book will read like a textbook on the history of money. Not sure how good or not so good this book is because I do not intend to read it. However, the cover really captured my attention - it's a simple and beautiful cover.

  25. 4 out of 5

    Zhi Yan Jin

    A historical and ideological train ride and analysis. At the core of the book is democratic control of money as a social technology. What are the rules and who gets to write them? That which wins out in the end must be one flexible enough, with decentralised acceptance, credit worthiness, and serve all parties, far and wide.

  26. 5 out of 5

    Bach

    Some worth reading stories of money and earlier day tokens. I do suggest reading the chapter 16 first to have a better sense of navigation through the book. If you are only concerned about the related financial crisis and arguments etc. Read chapter 13-15.

  27. 5 out of 5

    Ateeq Ahmad

    Dense but definitely worth a read We need to change how we see money and this book goes far in trying to explain that. However, it going to take a few more crises to make such radical changes happen

  28. 5 out of 5

    Rachel

    This book was informative, and included some engaging stories. I got a bit lost at times, but that may have been because I was listening rather than reading, which made it harder to go back and double check the parts that went over my head.

  29. 5 out of 5

    Harry Lijia Qin

    One of the best more casual books I've read in the field of monetary economics. Very entertaining read at the same time.

  30. 4 out of 5

    Q. D.

    Money as a social technology like math, English, and higher level code languages.

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