Customer Reviews

The History of Money

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1 star:		(1)

 

 

Jack Weatherford's "The History of Money" takes an interesting take on the development of money and man's evolving relationship its various forms. The book is a very good read for the lay person but it might prove a bit trying for those who are well versed in recent economic history.

Much of the information Weatherford presents is often misrepresented. One example of his misrepresentations is the US dollar has been in constant decline versus the price of gold starting from $35 an ounce in 1971 to $400 an ounce in 1995 and that gold has maintained its purchasing power. Not so. The price of gold peaked in January, 1980 at over $850 and has been in a deflationary trend along with other commodities for about fifteen years. Its early 2002 price is now about $280-290 an ounce. In the late 1930's, an American could buy a very nice mid-size car for about twenty ounces of gold or about $700.00. Even in 1995 using the $400 price, you could barely buy the cheapest new car on the market for the same weight in gold. Weatherford bemoans Nixon's actions to cut the dollar's final link with the dollar as inflationary despite the fact that it was inflation of the late 1960's and the gold drain from the treasury to other foriegn governments that would force the break in the first place. Other problems involve the supposive large declines in prices in the 19th century, with the starting points always during periods of war and high prices and the belief that the state (wildcat) banking period was really more stable than history says, which leads one to wonder what happened during the banking panics of 1819, 1837, and 1857?

Some information Weatherford presents is just wrong. For example, he states that in 1934, Roosevelt and the Congress a passed a law nationalizing silver in the manner similar to gold and as a result slowly debased or replaced the silver coinage with base coins which the result that by 1963 when the law was repealed 3.2 billion ounces was stockpiled by the government. Not quite. A proclamation by Roosevelt on August 9, 1934 (not the Silver Purchase Act of June 18, 1934 which required the government to purchase large amounts of silver from both foreign and domestic sources in order to support its price, that was the law repealed in 1963) did nationalize silver bullion but with the understanding that it would be used for coining. The intent was not to remove silver from circulation and create a reserve like gold was. In fact, the mintage of silver coinage except for silver dollars was greatly increased and the only reason that silver dollars were not minted in greater numbers was because people did not like using them and the treasury already had $500 million of them sitting unused in its vaults backing silver certificates. Unlike gold certificates which were no longer convertible to gold coin, silver certificates would remain fully convertible to silver dollars (the vast majority were minted before 1928, none after 1935) until 1963, then silver bullion until 1968. There was no gradual debasement of U.S. silver coins between 1934 and 1963. Until the Coinage Act of July 23, 1965 removed silver from dimes and quarters and reduced it in half-dollars (the rest was eliminated in 1971), the silver content in these coins remained constant from 1873 to 1964. By the way, the last vestiges of the nationalization of silver ended August 21, 1967 when silver began unrestricted trading as a normal commodity.

Other mistakes range from minor (the Bretton Woods Agreements were signed in July 22, 1944 not 1946 and the conference was held at the Mount Washington Hotel at the base of Mount Washington not Mount Deception as he wished the agreement to be named), to major (the banking and saving and loan disasters of the 1980's and early '90s were not caused by the great increase in housing prices in the postwar era but a combination of overlending to the oil and gas and the commerical real estate sectors during their respective booms then busts plus some good old-fashion banking fraud).

If Weatherford's history is shaky at times, his insight on the social aspects of money makes up for it. His observations on primitive money and its overall development through history are quite excellent as are more contemporary observations on the rich/middle class and the poor use money and the penalities the poor must endure in order perform necessary transactions. He also makes some observations about where money and society may be headed that one may or may not agree on but does make one stop and think a bit.

If you are looking for a good book on money as history, there are better volumes out there but if you interested in money as anthropology, this book will give you an good insight into that realm.

This is a pleasant essay - to call it a "history" is to give it more weight than it has - organized around the development of a truly transforming idea: money. And as innovations in money advanced those societies in which they arose, so this book must be a discussion of how money changed, and was changed by, the most "advanced" cultures of their time. Initially just the merchants needed something trans-national, and bars of raw gold and silver fit the bill. But it was the invention of coins, money that could be used by anyone, that started us down the path to the modern world, where all things - from pain and suffering to bushels of wheat - are commensurable in the one metric: money.

Jack Weatherford is an anthropologist, not an economist, so it is not surprising that he lingers over certain details that don't have a lot to do with his ostensible subject. Thus we are treated to the grisly spectacle of an Aztec human sacrifice, and how the Peruvian Indians who mine the silver that enriches others reconcile themselves to their poor and hazardous lives. Yet he does not stray far, and his depiction of the squeezing of the citizens of Rome for more and more taxes by successive emperors (plus their dilution of the currency) that led to the destruction of the free small-holding and business-owning classes, and with them the Empire, is chilling and instructive. The barbarians were kinder: they didn't use money.

The inventions of banking and of merchants' instruments (such as bills of exchange) are discussed, as well as the first national banks, in explaining the advent of paper money, the next great innovation. The pax Britannica is discussed, too, in a way: the British empire was not really as important, probably, as the British pound, backed by gold, and serving as a fixed monetary point, for a long period of world prosperity. For whatever logic inheres, or does not, to the "backing" of a currency by a precious metal, it did have the faith of many for a long time, and held currencies in rock-solid interrelationships for years.

Are things better now that all our currencies are floating, changing values relatively and absolutely every moment? Gold is a superstition, after all, so away with it! This book is at its best discussing the national hyperinflations that followed the Great War, the falling away from the gold standard, and the advent of the newer types of money and near-money. Electronic cash of various sorts, currency markets, and credit-card purchases that create private money are playing havoc with the traditional calculations of national money supply, and undermining the ability of governments to control their currency.

Where will it end? We'll have to surf this tidal wave of new money creation as long as we can without getting swamped: "The current electronic revolution in money promises to increase even more the role of money in our public and private lives, surpassing kinship, religion, occupation, and citizenship as the defining element of social life. We stand now at the dawn of the Age of Money." (p268)

This is the sort of book you get when an author writes on a subject with which he has only a passing familiarity, and lacks the confidence that the subject matter is inherently interesting enough to hold the reader's attention. The result is a book that is ultimately unsatisfying.

One symptom of the problems described above is that large portions are devoted to subjects other than money. For example, the author uses the first three pages after the introduction to describe Aztec ritual sacrifice in literally gory detail before proceeding on to the use of cocao beans as commodity money. I think that's meant to be what they used to call in show business a "grabber," but for the reader expecting to learn about money, it's a distraction. Another problem is that the author's grasp of modern economics is shaky at best, and especially in the latter part of the book, he'll make a point and then repeat himself, much as an undergraduate trying to extend the length of a term paper that's run a few pages short.

And yet, there's also some interesting and oddly convincing tidbits of information here. The author states that L. Frank Baum's 1900 book "The Wizard of Oz" is really a parable about the need for a bimetallic dollar based on both gold and silver. But even as it strikes you that this is an interesting bit of trivia, you realize that it's only a bit of trivia and has little larger significance.

If you're looking for a economic history of money, you should look elsewhere. If you're interested in the cultural and sociological impact of money, this may be more to your liking, though I think it still falls short.

This book has many little interesting tid-bits of information and they are fun to read, but by the end of reading this book I wish I had read a more serious book.

One of my biggest issues with the book is there are too many statements, speculations and presentations of material in the book that are in contradiction to what most economists or historians in the field would present. This left me with a feeling after reading the book that I didn't know whether half of what I read what complete BS or worth believing. For instance the authors presentation of currency switching off the gold standard and speculating about the future of electronic money. By the last third of the book I found myself saying "give me a break, this is pure wild speculation" or "this is BS" or "I won't be believing this, I wish I was reading an author I could take seriously".

If you are curious what Jack Weatherford thinks about these topics, this book is fine. Or if you just want to be entertained and don't care if what you read is what experts believe, this book is fine. But if you want a serious presentation of what most economists and historians believe in the field I would not recommend this book.

As many other reviewers noted, his history is shaky. Not only that, his anthropological knowledge and understanding of social fabric of many of the societies he reviewed are also weak. It seems that Mr. Weatherford wrote his book without always checking his sources, as if 'out of his head'. My personal favorite flop was his continuous insistence that Lydia was a country located by IONIAN sea. Has he checked his map? Ionian sea is on the other side of Greece and, naturally, modern Turkey in the region where Lydia was located has access to Aegean and Mediterranean seas. I am a little upset with writers who undertake to write sprawling historical analyses without having a solid historical base. He would have gotten a C- in my class. Still his style is entertaining and once you get used to inaccuracies and are willing to overlook them, then it could be an enjoyable read.

This is definitely a difficult book to review. On the one hand, the writing is good and the material is interesting and well-handled. The problem is that the book is riddled with errors, many of them blatant, so it's impossible to come away being sure of anything you have read. When the author cannot bother to check simple facts like what sea is between Greece and Turkey (it's not the Ionian), or who was the first Democratic President after the Civil War (it wasn't Woodrow Wilson), how much faith can you put in his statements about the forces that gave rise to Florentine banking or the Free Silver movement?

I have never read a book with so many stupid mistakes. On the other hand, I read it cover to cover, and I don't bother finishing books I dislike.

Mainly, I'm just disappointed that a good writer with interesting material could produce so unsatisfying a book.

So important an explanation of the impact of money on the economic, social, historical, political and even racial development of mankind that it is required reading for one Atlanta 9th Grade Gifted Student Program. The true stories illustrate everything. It makes you stop and shake your head often at learning something - and I say this a 55 year old educated CEO of a company who devours business and technology books. This is just fabulous reading. Read it, give it to a kid, then talk to them about it afterward. Wow.

This is a fantastic introduction to financial history. With equal weight given to the financial, political, historical, and anthropological aspects of money throughout multiple cultures and time periods, the net effect is an understanding of what drives monetary decisions the world over which relies on something other than "I need to get paid."

In this book, you will find enlightening references to key milestones in the development of money as the key facilitator of economic progress, including:
* Initial transition from totem objects to coins
* The long and inglorious history of currency debasement
* The development of bills-of-exchange and the first (and second) continental banking system
* The curious history of the dollar and cash in the US
* The westward progress of monetary capitals from Lydia to Greece to Rome to Tuscany to London to New York
* The transition between cash and near-cash to electronic money and its implication for future economic decisions
* The awkward and futile role of governments in slowing the growth of the money supply.

I highly recommend this to anyone. Whether a refresher history for money market professionals or an introduction for the simply curious, this is a quick and worth-while read that will open your eyes as to the surprisingly consistent development of monetary history.

This book was very helpful to me on a project of mine on credit cards. It was the only book I could find that had the history of the credit card. Without it, me and my friends might have not been able to complete our project. This is a kid who's talking here and I say buy this book to learn anything you need about the wonderful world of money.

I have defined history as: a series of wars with interludes of peace in which events occur that setup the next war. My clever definition is absolutely challenged in this highly recommended book. I have heard somewhere that a true sign of intelligence is the ability to say much with just a few words. Weatherford manages to convincibly condense and organize history in terms of money. Of particular interest to me was Part III, 'Electronic Money,' where the author talks about inflation, the cash culture (i.e., of the poor) and the incredible trillions of dollars which exist only electronically - that contrast with the relatively tiny amount of Federal Reserve notes actually in circulation (it will make you think). I could hardly put this 'read' down once I started it.