William N. Goetzmann’s Money Changes Everything

“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.

I reviewed Goetzmann’s fascinating book for The New York Times in its June 26, 2016 issue.  You can read my review here.

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Revolution at the IMF?

What has come over the International Monetary Fund?

Not content with playing the good cop to Europe’s bad in the ongoing Greek crisis – in which it has been arguing for more debt relief and less austerity – the Fund has just published an article in its in-house magazine by three of its leading researchers entitled “Neoliberalism: Oversold?”.

Their answer is “Yes”.

In my latest article in the New Statesman, I explore why – and whether the IMF’s mea culpa will finally win over its critics in the emerging markets or not.

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ABC: The lowdown on money, on The Money

When Richard Aedy and Kate Pearcy, the presenter and producer of ABC Radio National’s flagship business and economics programme The Money, asked their listeners what question they would most like to hear answered, they got a simple response:

What is money?

I was one of the people Richard and Kate interviewed in The lowdown on money in search of the answer – alongside the estimable Steve Keen of Kingston University and Mardi Dungey of the University of Tasmania.

It’s an excellently made programme, providing a very clear introduction to how the modern money and banking system works in under half an hour.

[PS In the programme, I explain that money is best thought of as a ‘social technology’.  I hasten to add that this useful description – which the presenters pick up on quite a bit – is not mine: it was coined by the Cambridge sociologist Geoffrey Ingham in his masterful book The Nature of Money – required reading for anyone interested in money, its history, and how it works.]

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Warwick Economics Summit 2016

I gave a talk at the very impressive 2016 Warwick Economics Summit on Saturday, February 6, 2016.

I will post a link to a video of my talk – Why become an economist?  A 300-year-old tale of murder, mayhem, and monetary policy rules – soon.

In the meantime, here is an interview I gave as part of the day.

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CBC: The Illusion of Money

We think we know what money is. We use it every day and our lives are unimaginable without it.  But look more closely and you find that coins and dollar bills aren’t “real”. They’re promises, symbols, ideas.  And exactly what money is has evolved enormously over the ages.

On Wednesday, February 24, 2016, CBC broadcast the first part of The Illusion of Moneya new radio documentary exploring how we’re rethinking one of the most basic features of human society from the Canadian writer and documentary-maker Anik See.

I am one of the people Anik interviews for the programme.  The others include artist Serge Onnen, anthropologist Joris Luyendijk, and the amazing Isabel Rupschus, experimenter in the art of with living without money.

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The coming storm

When does a stock-market slide become a crash? And when does a financial crash spark an economic crisis? At the end of last year, few investors were giving much thought to such nice distinctions. Less than two months into 2016, with the leading global equity indices having dropped between 10 and 25 per cent at their worst, these questions are on everyone’s lips.

In my latest article in the New Statesman, I discuss why I think we are entering a precarious period for both markets and monetary policy.

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Mohamed El-Erian’s The Only Game in Town

The US stock market has just endured its worst start to a year on record. The fear is that the US may be close to recession, with baleful consequences for the global economy – and still worse, that the world’s policy-makers are out of ammo with which to respond.

What better moment could there be for a book subtitled “Central Banks, Instability, and Avoiding the Next Collapse”? And who better to write it than Mohamed El-Erian – the man who captured the essence of the present era of low growth, low inflation and low investment returns better than anyone else with his memorable concept of the “New Normal”?

I reviewed Mohamed El-Erian’s new book The Only Game in Town in the Financial Times on January 23, 2016.  You can read the review here.

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