From Publishers Weekly
Public borrowing from citizens in times of war has gone hand in hand with modern democracy, Macdonald argues in this dense, sweeping economic history. A former investment banker now living in London, Macdonald traces the history of public financing of "national emergencies" (read: wars), from the biblical era through the present day. Until modern times, he shows, nations relied on stored treasure and surpluses to finance wars, often with detrimental results. Indeed, Macdonald argues that an inability to raise taxes for wars was one of the causes of Rome's downfall. Placing the importance of credit back at the center of historical causality is one of the book's strengths. The system of public credit swept onto the world stage in 18th-century Britain, France and the United States, and was intricately linked, notes the author, with revolutions in these latter two countries. During the 20th century, the system-and the notion of a "citizen-creditor"-reached its strongest point during WWI and likely had its swan song during WWII, because of postwar inflation, the succeeding decline in trust in government in the West and the increasingly global understanding of citizenship. There is much to learn here, but despite Macdonald's best attempts at accessibility, readers without a background in economics will struggle through.
Copyright 2002 Reed Business Information, Inc.
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MacDonald, a former investment banker, examines the historical linkage between political freedom and public debt, showing why representative governments have been able to borrow more cheaply from citizen lenders than autocratic heads of state who do not consider their citizens to be equals. Beginning at the end of the Bronze Age, this wide-ranging, comprehensive treatise traces the story of public finance and political freedom through the Napoleonic Wars to the twentieth century. We learn that the U.S. role in World War I was funded with public debt and, it is interesting to note, that World War II was the last major engagement in which savings bonds were a vital part of national security and the war effort. The mature bond markets of today have a global reach, and governments no longer depend upon citizen lenders. Even when considering the hard facts of money and credit markets--and their political implications--the author emphasizes the relationship between the state and its people, in this well-considered work. Mary WhaleyCopyright © American Library Association. All rights reserved
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