Money: The Unauthorized Biography - A History of Currency & Its Impact on Society | Perfect for Economics Students, Investors & History Buffs

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.A most thorough, objective and insightful review of the history of money.Very sensible thoughts, not as revolutionary as they try to be but well worth reminding some people about, delivered in a very catchy and entertaining style. I knew the Economics but learned much history and it helps.Martin takes a very deep and entertaining look at how people have perceived money since its invention a couple of thousand years ago, how different societies have dealt with it, and how he thinks it should be defined (which matters a lot). The traditional conception of money as something of value (gold or silver, say) that is used as a medium of exchange is wrong, he says. The idea that money replaced barter is also wrong, in his view. Money is, instead, transferrable debt that is based on a universally accepted measure of value (a dollar, for example). A dollar bill, then, is a token showing that the holder has that amount of credit. And who will honor that token? Since the dollar is universally accepted within some society, then anybody in that society will accept it. So, if you have a dollar bill, then society as a whole owes you a debt of one dollar. And how about a gold coin? The same thing is true. The gold may have some current value as a metal (measured in dollars, of course), but that just makes a gold coin a token of credit with some built-in collateral. As for barter, Martin says that no evidence has ever been found of a true barter society.This is the first book of many that I have read on the subject of money and financial crises that has been clear and that has illuminated the subject. It is also very well written as well as being enjoyable for the selection of anecdotes. I thought that this would be a cute exposition following its cute "unauthorized bio" line, but I found this to be a revolutionary declaration of the important role of money. This role is made as contrast to economics and financial theory where goods or credit respectively swallow the show. Very, very good. It should be promoted as being more important. For comparison it follows many of the ideas from Mervyn King's book, The End of Alchemy.This book is an eye opener. Martin takes a fresh look at money, and peels back the layers of confusion and 'myth' that have accumulated on the subject since money's invention in ancient Greece. The first recorded economic crash was in the early Roman empire. Many have occured since then on a regular basis (typically every ten or twenty years). These cycles appear to be part of the system. Money frees up people to be more productive; but there is always someone who tries to game the system by 'printing' their own money. (At least until the bubble bursts.) In other words, Martin gives a clear description of the benefits of money, and of its disadvantages. He does this through many fascinating examples from history.I enjoyed reading this book very much. I also learned a good deal. This is not a 'dry' economics textbook, more like a historical novel. It is pleasant to read and easy to understand. However, there is also an excellent bibliography and numerous annotated notes, if you want to deep deeper and study further.The book expanded my (naive) understanding of "money" and gave me basic understanding of its history. Written very well, pleasant to read. Make sure to read the bibliography chapter at the end if you are interested and want to dig deeper.This is a great book overall, and a very worthwhile read. It isn't the first book to point out that the "first there was barter, then there was money" history of money is almost certainly wrong, but it benefits from being more approachable than the others I've tried over the years (e.g. David Graeber).It's possibly a remarkable thing to say given the importance of money in the modern economy, but we arguably understand less about it now than we did fifty years ago. Reading this book helps to understand that point, and also the point that "money" and "credit"---far from being separate---are a lot more closely related than we're typically taught to realise.I wasn't a big fan of the way in which the book's conclusion was written - an imaginary conversation between the author and a clever-clogs. But there is far more of value in this book to be put off by the style of its concluding chapter.At first I thought this was going to be a revelatory new look at what money is (and isn't). The first few chapters captured my attention forcing me to rethink my (entrenched?) perspectives. But as I progressed through the chapters it felt increasingly like a rhetorical diatribe against capitalism without a robust analysis. In fact, the book ceased to be about money per se with a heavier focus on economic organisation. Nonetheless, for me it was an interesting read, as I had to confront my own long-held views. I would recommend this volume to anyone interested in money, but it needs to be read with a strong critical attitude.Gets really intense in the middle, but I liked how the last chapter summarised the main points. Last few chapters do go into a lot of detail which can get too dry.I am interested in economics and business but have not studied them formally. This is a brilliant explanation of what money is and how it works. I especially like the way Felix Martin shows how the headbanger view of money==gold is completely wrong. I feel much better placed to form my own opinion on this topic now, and recommend everyone reads this book!It was a tough read for me. So much information. I expected more from this book however there were some interesting facts I did not know.