“The very rich are different from you and me,” Ernest Hemingway has F. Scott Fitzgerald write in the original version of “The Snows of Kilimanjaro.” “Yes,” comes the response, “they have more money.”
This famous (and wholly fictional) exchange is memorable because it captures so succinctly one of the great fascinations of finance, how it is at one and the same time something so completely mysterious and so utterly banal. It also poses an important question: Does having more money than someone constitute a difference only in quantity, or in quality? Does the increase of financial wealth just make for more of the same — or does it change people in a more essential way?
Hemingway was exploring these questions on the level of the individual. William N. Goetzmann, the Edwin J. Beinecke professor of finance and management at Yale, is shooting for bigger game in his new book, “Money Changes Everything: How Finance Made Civilization Possible.” His goal is to explore the consequences of the invention and growth of finance for whole societies. As his title suggests, his conclusion is that they are firmly positive. Financially advanced societies, he argues, are very different from financially primitive ones — and not just in that they have more money.