Money Changes Everything – How Finance Made Civilization Possible
By William N. Goetzmann
Princeton University Press – £24.95
From ‘Athenian Finance’ to Fibonacci Finance;’ from ‘Marx and Markets’ to The Russian Bear;’ this utterly uncompromising book acutely accesses the long trajectory of finance from its nigh humble beginning(s). As such, to refer to it as a read and a half (and then some), would be a flippant understatement.
Money Changes Everything – How Finance Made Civilization Possible by William N. Goetzmann is, if nothing else, a most pertinent and brave publication. Especially right now, where the international monetary cleavage between the haves and the have-nots, is forever widening beyond any point of any return.
As the marvellous Sir Bob Dylan is known to have both said and sung: ”money doesn’t talk, it swears.” And right now in the UK at least, money has for many, gone way beyond any form of swearing and spilled over unto the premise of sickening greed.
To be sure, said argument clearly exacerbates the assumption that in the terrible aftermath of recent – and continuing – financial stasis, it’s easy to assume that finance per se, is some sort evil, untouchable disease. A malignant disease which destroys lives, fortunes, banks and jobs, before ultimately reaching the already warped tentacles of governmental thinking. Yet to a certain degree, these twenty-eight chapters are a complete polar argument to such assessment.
Goetzmann, who is the Edwin J. Beinecke Professor of Finance and Management and director of the International Centre for Finance at the Yale School of Management (whose previous books include The Origins of Value: The Financial Innovations that Created the Modern Financial Markets and The Great Mirror of Folly: Finance, Culture and the Crash of 1720), insists that the development of finance has made the very growth of civilization possible: ”Finance is often regarded as an abstract, mathematical subject that occasionally calls attention to itself by dramatic crisis or as a symbol of excess. In fact, finance has been an integral part of the development of human society over the past 5,000 years. Finance played a key role in the development of the first cities, the emergence of classical empires, and the exploration of the world.”
He further explains that finance is a ‘time machine,’ a technology that allows us to move value forward and backward through time; and that this ”innovation has changed the very way we think about and plan for the future.” But, and this is the big one, why does finance continue to be so bloody dangerous, so horribly manipulated, and so very often inexcusably, if not murderously wrought beyond that which ought ever be allowed?
Perhaps the sociological answers lie within the acutely analysed pages of Goetzmann’s next book? Reason being, the fundamental tonality of Money Changes Everything extends no further from the premise from that which it initially embarked: finance.
That’s right folks, finance, the making(s) of, as well as a great deal of the history thereof; a quintessential facet of the book’s writing that makes for surprisingly interesting reading. For instance, having spent time in the wonderful French city of Toulouse, my initial reticence was somewhat piqued to read: ”[…] with the revival of European civilization after the year 1000, Toulouse shared many of the strengths of the trade-oriented Mediterranean city-states, including a strong merchant class, a tendency toward citizen rule, and the openness toward religious freedom. Toulouse differed in one key aspect – its law […]. The law of Toulouse allowed widespread freedom for citizens to contract on financial obligation of all sorts. Toulouse contracts included money loans, loans in kind, loans of grain, loans assigned to others in payment of obligations, mortgages, leases, sub-leases, fiefs, baillies, and assets of all sorts held in partnership […]. On this novel legal base, Toulousain economy and society flourished, and Toulouse became an important stop on the European road to capitalism.”
The writing of financial history and the way it flourished is scattered throughout these 521 pages – which, if nothing else, allows the reader to make their own informed assessment(s) as to whether or not, the finance, as a commodity, actually works.
Littered with a varying number of illustrations and photographs, this hefty, worthy book, really is a historical eye-opener if nothing else. As the University of Zurich’s Hans-Joachim Voth explains: ”If anyone had told me that someone could write coherently and intelligently about Karl Marx, cuneiform tablets, the South Sea bubble, the opium trade, and David’s painting Death of Marat between a single set of covers, I would have shaken my head in disbelief. This book accomplishes precisely this. Money Changes Everything does nothing less than to think through the contribution of finance to modern civilization. A thrilling read.”