The titles of non-fiction academic based research books are often chosen to provoke, spark the interest, of potential readers that shy away from such topics. The word “money” especially followed by the phrase “changes everything” invokes a semi-prejudicial emotionally charged negative connotation. In the modern world money has become the tangible symbol separating the rich and the poor, the social strata determinant, so it does changes everything – the way people live. However the Goetzman heading is therefore a bit misleading but understandably used as a marque to attract interest. The more appropriate description of the introspection he offers so masterly is in the sub-title “How Finance Made Civilization Possible.”
The term money is simply an invented device, an instrument of convenience; specifically an acceptable exchange intermediary, an emotionless impassive tool. It allows for the result of one’s labors or intellectual skills to have a commonly if not universally acceptable material value assigned to them. It allows for transactions to be more efficiently carried out. Instead of one person lugging around surplus quantities of material goods they acquired or offering special knowledge they attained and to offer such in trade for those objects or applied talent of another money acts as a bridge, a conduit for the exchange process. Money is a tool of mankind and no other species on earth uses it. As such it is a prime catalytic agent of human evolution, the refinement and advancement for the development and growth of civilization.
This is the essence of Professor Goetzmann’s well written balanced examination of how the advent of money morphed into the creation of financial systems and models that affected the world both positively and negatively; it did change everything. The book is not, as the inside flap may give the impression, a commentary on the recent financial crisis that “destroys fortunes and jobs” or “undermines governments and banks.” It is not another book on the plus and minuses of globalization, although there is no doubt that cross territorial finance brings the world closer together and make it more interdependent. Like the invention of any new technical advancement how it is used often defines how it is perceived and judged.
By offering an in-depth critical examination of finance over history and its affect around the world the reader will be educated to hopefully understand and appreciate how events were both shaped and influenced by the application of this apparatus. The globalization process which allowed for civilization to advance was constructed on the exchange rails not just consisting of goods and services to flow across territories but for ideas, religions and cultures to move between and cross territories and societies. The engine was international trade and it was propelled by the fuel of money and the financial mechanisms that grew out of its core design.
The financial instruments we take for granted today, from interest baring loans to shareholder ownership arrangements along with all the other sophisticated and complex mechanisms that employ the use of capital as a prime resource deeply impacted how the world grew up. The author however introduces the subject matter with very simplistic basic examples that show how one literally borrows time by banking on the future via financing thereby allowing one to accumulate the necessary basic as we as income producing assets. We all live by such principles as it has allowed people to manage themselves and things as it reallocates “time, risk and resources” across the globe. Both for the novice and professional the idea that money as a nomenclature is neither a saint nor a demon with no prejudicial attribution associated with it makes for a most important and beneficial read. Finance is not a code word for wealth or capitalism. It is just a socially constructed productive system that allows for value to be distributed, no more - no less. But such definition makes it one of mankind most misunderstood phenomenon in spite of the fact that it is a key driver in the construction of civilization. I only wish this volume was published before composing my own chapter on the mediums of exchange in my book, Tracing the Roots of Globalization and Business Principles, 2nd Ed., 2015, Business Export Press; also on Amazon.
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