BOOK REVIEW: THE HISTORY OF MONEY

Now here is a book. It instructs and provokes and entertains. Even its mistakes are worthwhile. The secret of "The History of Money" is in the subtitle: "a story of humanity."

For David McWilliams, an Irish economist, podcaster and chastened former central banker, monetary economics is a branch of humane letters. For every nod to John Maynard Keynes he makes 2 1/2 to James Joyce, Dante, Martin Luther or Johannes Gutenberg. As for Friedrich Hayek and Ludwig von Mises, two of Keynes's foremost monetary sparring partners, he makes none. Regrettable omission.

What, then, is money? It is, according to Mr. McWilliams, "a store of wealth that motivates and excites us. It amplifies human behavior, bringing into focus attributes such as enthusiasm, hope and optimism, as well as greed, envy and pride." Also: It is "a living thing, and like the adoption of a new word, phrase or idiom, each innovation made money more useful; the more useful it was, the more used it became."

These are not conventional definitions—no technical terms like "M-1" or "M-2" for the unconventional Mr. McWilliams, the founder of Kilkenomics, "the world's only economic and stand-up comedy festival," held annually in Kilkenny, Ireland. Most economists "do not really understand money," he asserts, and not because so many economists have so little of it. The dismal scientists rather lack the imagination to see money for what it really is. "Money is power," Mr. McWilliams contends, "it is domination, but it can also be liberation. Money buys independence."

The author carries his readers from antiquity to medieval times to Renaissance Florence to the Age of Revolutions (American and French) to the 19th century and on to the present day and beyond. He dotes on "M-Pesa," a 2007 Kenyan innovation that turns mobile-phone credit into money. He gives the rough side of his tongue to crypto, asking: "What problem did it solve?" And answering: "None."

In Mr. McWilliams's fast-moving narrative (short chapters thematically clustered), credit rates equal billing with money. Credit is the promise to pay money, an IOU. It is therefore a creature of confidence, he writes. In the words of Daniel Webster: "man's trust in man."

For Mr. McWilliams, next to nothing is irrelevant to the story of man and money, including the first bicycle craze, ca. 1900, the simultaneous exploitation of the Congo (by King Leopold II of Belgium, for the rubber with which to satisfy the unquenchable demand for pneumatic bicycle tires), the nature of a social network, the cigarette-money of World War II prisoner-of-war camps.

Progress is Mr. McWilliams's North Star. Mankind advances by tossing aside the trammels of yesteryear, be they religious or monetary. Thus, to the "tyranny"—to the "dead hand"—of gold, he says good riddance. What prodigies of wealth and abundance has the world achieved on the pure paper standard!

"Fiat money," reads one of many such panegyrics, "is the most significant innovation in money since the Lydians minted their first coin. For the first sustained period, countries, and of course their citizens, were truly free from the brace of the precious metal." To which he appends, "give people money and, in economic terms, magic happens."

To read the complete article (subscription required), see:
‘The History of Money' Review: What Made the World Go 'Round (https://www.wsj.com/arts-culture/books/the-history-of-money-review-what-made-the-world-go-round-fbfeeb31)

To read the earlier E-Sylum articles, see:
NEW BOOK: THE HISTORY OF MONEY (https://www.coinbooks.org/v28/esylum_v28n46a05.html)
BOOK REVIEW: THE HISTORY OF MONEY (https://www.coinbooks.org/v28/esylum_v28n46a06.html)

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