Review by Choice Review
Martin (partner, Liontrust Asset Management, UK) explains in well-written prose the current thinking and economics behind the concept of money. Since the beginning of civilization, there have been many forms of currency as a medium of exchange for goods and services--from barter to giant stones on the Pacific island of Yap to gold and paper IOUs backed by gold. Citing Adam Smith's classic work An Inquiry into the Nature and Causes of the Wealth of Nations, Martin notes other commodities such as salt, nails, and tobacco that served as money. However, the main contribution of this work is its discussion of money and economic thought. Clear and at times entertaining, Martin includes classical economists Jean-Baptiste Say and Walter Bagehot as well as modern practitioners Milton Friedman and Alan Greenspan. He also relates the anecdote of Queen Elizabeth II speaking to the London School of Economics in 2008, the period of the great recession, and asking why no one had seen the crisis coming. Although the history of money has been researched and written by others, Martin brings new material on the evolving status of money. Summing Up: Recommended. Lower-division undergraduates and above; general readers. R. T. Sweet Hood College
Copyright American Library Association, used with permission.
Review by New York Times Review
MOST PEOPLE ARE used to owing money to others, but few think about what money may owe us: an equitable society, a functioning political system, a peaceful economy that can stay off the exhausting roller coaster of financial booms and crashes. We don't usually think of money as a tool to accomplish all that, but Felix Martin, an economist and former World Bank official and author of the compulsively readable new book "Money: The Unauthorized Biography," says that money can give us all those things; it can deliver "both stability and freedom." The catch is that we must radically rethink money itself. It's not a fixed, physical thing, he argues, but a virtual "social technology" that should be used to enable a more democratic and equitable world, bring order to the banking system and foster "peace, prosperity, freedom and fairness." Sign me up. Martin's best stories remind us of the quirky ways money existed in the past. He opens the book late in the 19th century in Yap, a Pacific island that favored as its currency enormous stone wheels the size of boulders. One especially rich family's only proof of their wealth was a boulder at the bottom of the sea. (Talk about underwater homeowners.) For centuries in England, accounts were marked on wooden tally sticks; in 1834, when Treasury officials burned the tallies in a tantrum of modernization, not only did they wipe out English financial history, they also created a conflagration that literally burned down Parliament. "Money" is a fascinating and entertaining pep talk for bankers, economists and armchair revolutionaries dissatisfied with the current financial system, and an attempt to galvanize them into action. The best arguments center on widespread unfairness: "Global banking's current structure generates an unjust distribution of risks, where losses are socialized - taxpayers are on the hook for bailouts - while gains are private - the banks and their investors alone reap any profits." In addition to widespread wealth inequality and stagnant incomes, "the baby boomers own all the houses, and no one under 30 can get on the property ladder." Martin's complaint will be familiar to anyone who has kept up with the flailing of finance in the five years or so since the crash. A wide group of dissidents has strengthened its opposition to the current financial system. This worldview - which holds, roughly, that banks are greed-driven agents of chaos and governments their weak-willed enablers of social inequality - crystallized first in the back alleys of the Internet, then on the streets through the Occupy protests, on to the campaign trail with Ron Paul's "End the Fed," and now peeks through the growing debate around the virtual currency Bitcoin, which is backed by no government or bank. This set of movements was spurred by what its adherents consider a failure of capitalism as we know it and a desire to either change it for the better or escape it entirely. Martin is very much with them - or at least with some of them. Martin sides strongly with the camp that says the financial system failed, particularly the banking system. He suggests that banks broke their traditional bond with governments by going rogue: issuing trillions of dollars of derivatives that flooded the shadow banking system and creating a largely unregulated "parallel monetary universe." He calls it a coup d'état, and he's sympathetic to the dissidents - "Why respect the rules of the system, ask the Occupy protesters and indignados in Madrid, if the system consistently generates crises?" - but rejects financial anarchy and interlopers like Bitcoin and comes down on the side of changing our financial system for the better. His practical solution is to break up the banks in the "Chicago Plan" style of the Depression-era economist Irving Fisher: Some will be utilities regulated and backed by the state, and a separate set of financial institutions will make loans and speculate on their own. It sounds a little like using separate sets of plates to keep the financial system kosher. "Money and banking, incorrectly understood, and so incorrectly configured, are what brought us here." Martin writes. He adds, optimistically, "Money and banking, correctly restructured, will be what brings us out again." His intellectual agenda takes more work. He says both consumers and economists are mistaken when they connect money to things - whether it is gold or cash or goods in a supermarket. We need to understand money as a set of promises, "not as a thing, but as a social technology" that should be "unflinchingly responsive to the demands of democratic politics." Economists, similarly, when they obsess about inflation, are merely conflating money with the fixed value of the things it buys, like the price of an average basket of goods. The financial crisis demonstrates, in Martin's view, that money has failed its democratic promise. He reminds us that money, as we know it, has been the primary tool of democratic government and social mobility. "Under the old social regime, social position had been absolute: born a peasant, died a peasant; born a chieftain, died a chieftain," Martin writes. "In the new world, everything was relative. The only real measure of a man's worth was money - and the accumulation of money has no intrinsic limits." Of course, those Occupy dissidents would argue that our supposedly malleable social order promised by money has turned into a new kind of feudalism, with power concentrated in the hands of a few property owners - the divide between the 1 percent and the 99 percent. Martin doesn't disagree. He may not advocate class war explicitly, but he does go for a hard sell, using language more suited to the Pentagon than to the genteel halls of central banks. "The war on financial instability requires not conventional tactics, but a counterinsurgency strategy," he argues, adding later that our current regulations and attempts to change banks behavior are inadequate. "Conventional warfare will be an infinite regress: attempting to supervise the financial sector is a fool's errand." The revolutionary, populist theme is carried through to the last chapter. If we're going to reform money, "it will ultimately come down to ourselves." A friend of Martin's says, "If you want something done properly - you have to do it yourself!" Spoiler: That's the last line of the book, and it's a cliffhanger. Martin doesn't provide any answers on how the masses can reform money, although he provides an enjoyable account of why we should entertain the idea. Still, he says, his attempt to reform the banking system "isn't meant to start a socialist revolution - it's meant to stave one off." The outstanding flaw in Martin's argument is whether the system can change, and whether the impetus exists to change it - whether, in fact, the crash was bad enough to force a revolution of any kind. There are enough strong voices on the other side of his argument who would suggest it wasn't, including Daniel W. Drezner in his book "The System Worked," and the economists Charles W. Calomiris and Stephen H. Haber, who suggest in their book, "Fragile by Design" (reviewed on Page 22 of this issue) that financial crises are an inevitable outcome of the push-and-pull between banks and governments. Into this pitched battle of economic ideas wanders the well-meaning American consumer, just trying to pay for a latte. Whether he uses cash, credit, loyalty cards or Bitcoins is largely irrelevant to him; he just wants coffee and isn't looking for a fight. Too bad. He is a potential economic foot soldier in Martin's view, and the war is very much on. 'Money and banking, correctly restructured, will be what brings us out again.' HEIDI N. MOORE is the finance and economics editor for Guardian US.
Copyright (c) The New York Times Company [April 20, 2014]
Review by Booklist Review
Does money really need to be explained? Apparently it does, as economist Martin challenges the conventional theory that money emerged from the barter system. Offering a broad historical perspective, Martin begins with the pre-money society of The Iliad and The Odyssey. When the numeracy, literacy, and accounting concepts of ancient Mesopotamia met with the Greek concept of universal social value, the components of money took shape. He traces uncanny similarities in ancient and modern history of monetary maneuvers and crises and how citizens have created quasi currency IOUs, checks, vouchers in reaction to government stumbles in Ireland, Argentina, and Russia. Martin details how the great merchant houses of Europe developed the banking system we currently know. Tapping philosophers and economists, including Plato, Locke, Marx, Bagehot, Keynes, and Greenspan, Martin clearly explains why, even though it seems arcane, it's important to understand the theory behind money, its origins, and how it has operated through the ages. This is economics written with sharp pacing and often amusing perspectives, raising mundane considerations of supply and demand to philosophical discussions of the meaning of value.--Bush, Vanessa Copyright 2014 Booklist
From Booklist, Copyright (c) American Library Association. Used with permission.
Review by Publisher's Weekly Review
Blending history and economic analysis in his engaging first book, economist and bond investor Martin explains the development of sovereign currency and its critically important function in modern economies. This is familiar territory for both economists and non-specialists, but Martin approaches his subject in entertaining fashion, discussing monetarism and monetary theory, from John Locke to the Federal Reserve System. He pauses to consider "excessive accumulation, consumption, and competition for status," which he dismisses as "hard-wired into the human brain," though he fails to consider greed in a world divided into asset holders and not. Martin stresses the connection between money and freedom, explaining why money is a "one of the most powerful and important tools of democratic government." He calls for "radical reform," but it's difficult to find Martin's magic rabbit or discern what his actual reform program would entail. His puzzling Socratic dialogue to try to explain things at the end falls flat. Though possessed of a meaningless subtitle, Martin's book is breezy, fluent, discursive, and informed. It holds considerable appeal for investors, their bankers, and those drawn to the mechanics of wealth. 19 illus. Agent: Natasha Fairweather. (Mar.) (c) Copyright PWxyz, LLC. All rights reserved.
(c) Copyright PWxyz, LLC. All rights reserved
Review by Library Journal Review
The use of money seems second nature to most, and perhaps many people do not think about how monetary systems work. However, a deep understanding of these systems can create new financial opportunities and advantages. Here, London-based economist Martin (formerly with the World Bank; associate of George Soro's Inst. for New Economic Thinking) shows that money is one of the greatest inventions of mankind, tracing its roots to interactions between Mesopotamia and ancient Greece. He chronicles the different kinds of money used by various cultures and through these discussions defines the concept of money. Martin skillfully draws parallels between the old world and the present-day and explains how individuals throughout the ages have made profits in money markets. The perspectives of great economic thinkers such as Adam Smith, Milton Friedman, and John Maynard Keynes are included. -VERDICT This insightful monetary history gives readers a better appreciation of money and its evolution and of current systems and financial events, especially crises. Because money is a complex and abstract concept, this book is geared toward readers with economic backgrounds or financial academic training in money and banking.-Caroline Geck, Camden Street Sch. Lib., Newark, NJ (c) Copyright 2014. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.
(c) Copyright Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.
Review by Kirkus Book Review
What is money? If you think you know the answer, then you may not have thought hard enough about it, a problem that kings and commoners alike have shared throughout history. The Micronesian residents of the island of Yap, long a case study in the history of money, reckon currency by giant stones that, even if sunk in the ocean and therefore inaccessible, nonetheless have value. Their system matches the symbolic abstraction of money with a concrete basis for it. However, writes investor/economist Martin in this improbably lively account, that concreteness no longer underlies our modern economy: "The vast majority of our national moneyaround 90 percent in the US, for example, and 97 percent in the UKhas no physical existence at all." So is money merely symbolic? By one measure, perhaps. But Martin seeks a deeper understanding, relating money especially to power: If on one hand it served as an instrument of rule for sovereigns, it also reined in those sovereigns as something even mightier than they. By that light, as one medieval philosopher formulated it, money "is not the property of the sovereign but of the entire community that uses it." Martin expands on this provocative idea, suggesting that money is a system for allocating economic risk "by making a simultaneous promise of stability and freedom." All this talk can get quite heady, and that's not to mention the ancient Chinese proverb that "the fish is the last to know water"i.e., those of us who use money are so deeply steeped in it that it's hard to think about, let alone answer the more important question: How much power should money have to govern our lives? Refreshingly free of jargon and long on ideasincluding the thought that if it's money that got us into our current mess, it's money that can get us out of it.]] Copyright Kirkus Reviews, used with permission.
Copyright (c) Kirkus Reviews, used with permission.
