The History of Money by David McWilliams (2024) is subtitled “A story of humanity.” It skims over a vast landscape, dipping in now and again for a deeper dive into moments when innovations in how societies created and managed money (or failed to do so) contributed to world-changing events. The complexity of our current world economy has grown up guided and constrained by the cautionary lessons of history, but ever spurred on by people’s greed and prurient interests. This book provides an enjoyable and useful introduction with a lot of fascinating details along the way.
He begins with the earliest known examples of commercial tallies, records of values, and transactions, going back to the stone age. The theme of money shifting between measures of commodities (e.g. grain or precious metals) or value (as anchored by fiat and monetary policy) plays out over and over throughout the book.
Many important historical figures are introduced with the roles they played in advancing innovations in monetary practice and policy. I’ve always lamented that, as someone in the sciences, I had little flexibility to study history and classic literature. McWilliams has prompted me to consider reading at least two important books out of history: Xenophon’s Oeconomicus, the foundational text of economics and Liber Abaci by Fibonacci.
The books ends with a pretty harsh dismissal of cryptocurrencies:
Over the years we have seen that money is a technology designed to solve a problem. I’m scratching my head as to what problem Bitcoin in particular and crypto in general actually solve. Despite the small foothold Bitcoin has gained in the mainstream US investment market, crypto looks set to remain on the fringes, a source of obsession for its supporters and aficionados, but not very useful or practical in reality. Bitcoin is to money what Esperanto is to language.
Other than the slur against Esperanto, I am in complete agreement. I mean, he’s not actually wrong about Esperanto either, but I would have preferred he slander Volapük rather than Esperanto to make his point.
If you’re curious about understanding how money works in practice and how it came to be the way it is, this book is a great place to start.
