Six books that tell the history of money

The history of money helps to explain how it works today
The history of money helps to explain how it works today

Summary

  • What to read to understand the roots of money

Money predates history. Before the ancient Mesopotamians invented the means of writing they had invented accountancy, using cuneiform symbols to track the flow of goods into and out of temples. The history of money itself is fascinating–and helps to explain how it works today. Some of the six books selected here take on the daunting, perhaps impossible, task of tracking the entire history of money. Others hone in on one particular aspect or episode of it. Each is illuminating and demonstrates that money itself has plenty of stories to tell.

Money Changes Everything. By William Goetzmann. Princeton University Press; 600 pages; $35 and £30

Before he became a finance professor at Yale, William Goetzmann was an archaeologist and museum curator. In “Money Changes Everything" he combines his talents effortlessly. Starting in Iraqi dig sites and ending in post-war America, he demonstrates how financial innovations were the handmaidens of civilisational change. His appreciation for primary sources is a rare gift among economists, presenting the reader with Babylonian tablets, 11th-century Chinese vases and the eight-foot-long charter of Europe’s first corporation, a mill in Toulouse. Published in 2016, Mr Goetzmann’s book provides what is surely the most comprehensive overview possible of monetary history.

Money: The Unauthorised Biography. By Felix Martin. Knopf; 336 pages; $16.95. Vintage; £10.99

Felix Martin’s pacy biography of money is a polemic told through history, rather than a dry chronology. Written in the shadow of the 2007-08 financial crisis and the euro-zone debt crisis, Mr Martin sets out to show that the commonly held view of money as a “thing", such as a lump of metal or a coin, is wrong-headed. Starting with the giant stone money of the island of Yap, he demonstrates that it is more like a shared language or social contract. Creating a commonly accepted measure of value relies on collective agreement, including between the sovereign and bankers, who have often tried to change the terms of this bargain to their advantage. Some of the later chapters lose their way slightly but it is hard to find a more entertaining entry point to monetary history.

A Monetary History of China. By Peng Xinwei. Translated by Edward Kaplan. Western Washington University; accessible here

Written in the 1950s but only translated into English in 1993, Peng’s two-volume history of money in China covers nearly 3,000 years, starting with the cowrie-shell currencies of the Zhou period and ending with the silver dollars and foreign banks of pre-revolutionary China. Fascinating in its own right, the work offers a corrective against the idea that there was a single way for money to develop: China developed fiat money (the sort not backed by precious metals) nearly a millennium before Europe would do so. Peng, who was a professor of finance and a banker, disappeared during the Cultural Revolution.

The Shell Money of the Slave Trade. By Jan Hogendorn and Marion Johnson. Cambridge University Press; 248 pages; $50.99 and £36.99

Cowrie shells, the smooth white home of a mollusc, have the claim to be the world’s first global money: harvested in the Maldives, sold in Bengal, shipped to Europe (mostly to the Netherlands and Britain) and used to buy slaves in west Africa. The shells would also make the journey across the Atlantic: one was found in Thomas Jefferson’s estate; large quantities were discovered near to slave markets in Virginia and some are still used today by Afro-Brazilians to tell fortunes. That grisly role makes the cowrie one of the most significant monies in history. Jan Hogendorn and Marion Johnson trace this tale from the first accounts of their use by Arab travellers to the currency’s virtual death in the late 1960s, where it survived only in isolated pockets of rural west Africa.

Globalizing Capital. By Barry Eichengreen. Princeton University Press; 320 pages; $29.95 and £25.00

Barry Eichengreen, a professor at the University of California, Berkeley, tells the tale of various attempts over the past two centuries to create an international monetary system. The book starts in the era of the classic gold standard, when the leading economies of the time pegged their currencies to gold, before telling the tale of its disintegration between the first and second world wars. That was followed by the attempt at Bretton Woods to create a new monetary order, though that too fell apart and ushered in the era of globalisation and free capital flows. First published in 1996, on the eve of the Asian financial crisis, recent editions include the creation of the euro and the decade of financial turmoil starting in 2008. This is an invaluable guide for anyone who wants to understand money’s international dimension.

The Social Meaning of Money. By Viviana Zelizer. Princeton University Press; 320 pages; $24.95 and £20

A professor of sociology at Princeton University, Viviana Zelizer hones in on America between 1870 and 1930 to tell a social history of money. Examining magazine articles (confessional pieces such as “How we live on $1,000 a year", for instance), court cases (one judge decided, in a case in 1908, that “a wife has a perfect right to go through her husband’s pockets at night") and much else, she shows how money assumes many different meanings. Couples would decide which bit of their finances was “his" and which was “hers"—and what each was entitled or required to spend it on. Ms Zelizer’s work provides a challenge to economists who tend to see money as fungible and utilitarian. The book is a rare example of a monetary history told from below.

Also try

Money in One Lesson. By Gavin Jackson. Pan Macmillan; 400 pages; $24.95 and £18.99

One of our economics and finance correspondents—and the author of this piece—answers the important questions on the nature of money and the ways it shapes the world. The book draws on historical examples to dispel myths and show how societies and their citizens have always been entwined with matters of lucre.

The British Museum, in London, has a gallery devoted to the history of money. (We reviewed it, a decade ago, after it was refurbished and re-opened.) For those looking forward, we wrote (in 2022) on central banks’ efforts to move into e-money.

© 2023, The Economist Newspaper Limited. All rights reserved. From The Economist, published under licence. The original content can be found on www.economist.com

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