Review of Money: A Story of Humanity by David
McWilliams
By Don Curren
Money is one of homo sapiens’ most pervasive, powerful
and problematic creations. In David McWilliams it has happened upon an engaging,
insightful and enthusiastic teller of its story.
A little too enthusiastic, perhaps - but we’ll get to
that in a couple of minutes.
McWilliams’ book 2024 Money: A Story of Humanity is a thoughtful,
well-informed examination of money, and of
its long, tumultuous and fascinating history.
It’s also a remarkably entertaining read. It
emphasizes the human element of money rather than the dry abstractions that
sometimes clutter books on the topic.
McWilliams is an economist who worked for the Central
Bank of Ireland, as well as in the private sector for UBS and Banque Nationale
du Paris. He’s currently on the faculty of Trinity Business School at Trinity
College Dublin, and has written five books.
He’s well positioned to tell the story of money, and
his erudition about money and deep understanding of its history are evident
through the book.
What’s surprising is how effectively McWilliams turns
the potentially cold and abstract story of money into an engaging and very
human tale.
He does that in part by telling us stories about
individual humans.
Some of their stories exemplify critical stages in the
development of money.
One of them is the story of Kushim, a Mesopotamian
barley trader, who lived 5,000 years ago and happens to be the possessor of the
first recorded name discovered by historians. Kushim is cited on a contract for
the loan of a batch of barley which he borrowed at an interest rate of 33.33% -
the prevailing rate at the time – for two and a half years.
Other stories are about people who played key roles in
shaping the history of money, people like the brilliant scoundrel John Law, who
McWilliams dubs the “Father of Monetary Economics,” or the US federalist
politician, creator of that nation’s original financial infrastructure and hero
of a recent musical, Alexander Hamilton.
Sometimes it seems like McWilliams is straining too
hard to drag in extraneous but relatable stories, such as the chapter on the
Wizard of Oz and its relation to the monetary disputes of the times. But in
general, he does a good job of evoking the human dimension of the abstraction
that, in so many ways, governs our lives.
Along the way, McWilliams helps explain some of the
fundamental realities about money that are frequently misunderstood, such as the
sometimes-overlooked pitfalls of the gold standard and the resilience and the fecundity
of “fiat” money.
He also assesses recent developments in money, taking
a guardedly positive stance on Modern Monetary Theory and offering a scorching
critique of crypto currency.
“Dressed up
though it may be in the rhetoric of liberation for the average person, crypto is
a form of private money. Be under no illusion, the rich will benefit the most
from private money,” McWilliams writes.
But for money itself, McWilliams remains an enthusiastic
cheerleader.
His title reflects his belief money has played a
critical role in enabling and accelerating humanity’s progress.
“The story of money is the story of humanity itself,”
he writes.
“We will see that proficiency with money coincided
with other innovative breakthroughs such as writing, numeracy, law, democracy
and philosophy,” McWilliams writes in the preface.
That list outlines the surprisingly pivotal role that
McWilliams believes money played in our development and raises questions about
how the causality in some of those connections actually worked.
McWilliams does
acknowledge the apparent correlations between money and the impressive
assemblage of phenomena he cites doesn’t necessarily tell us the direction of
causality in those cases.
“This co-evolution prompts the question: was money the
reason for other developments or did these other developments lead to the
evolution of money,” he writes.
But McWilliams seems to tilt strongly in favour of
money’s starring role.
I think it’s important to acknowledge the
relationships between money and a diverse array of phenomenon that can
superficially seem unrelated to it. But I also think it’s important not to
oversimplify, and to understand that causal relationships between cultural
phenomenon can be complex and interactive.
There’s another basic problem with McWilliams’ characterization
of money as a benign and almost omnipotent factor in history: he neglects the
dark side of money’s place in human history, including the role it played in the
exploitation of those without money by those with it.
He does devote one chapter, “Money on Trial,” to the
role that money played in the imperialist exploitation of large parts of the
world by Europeans, in particular the savagery inflicted on the Congo region in
Africa by the Belgian-dominated rubber trade in the late 19th and
early 20th centuries.
But he neglects other damages money has inflicted or
at least exacerbated in societies through the millennia, including its tendency
to create and intensify inequality and the key role it played in slavery.
In the way it reduces human beings to commodities
whose value can be expressed in quantitative terms, slavery epitomizes one of
the worst things about money: its capacity to corrode and sometimes destroy other
value systems.
The power of money to corrupt and eventually supplant
other values is all too apparent in politics today in the U.S., but in many
other countries and jurisdictions as well.
Money has enabled and sustained a lot of positive
things in human history, but it has done the same for as many, if not more,
negative ones.
I would argue McWilliams neglects this dark side of
money.
It’s almost as if his book needs a companion volume entitled
“Money: A Story of Inhumanity.”
That said, McWilliams’ book still has much fundamental
value.
It tells one side of money’s story in a very engaging,
lucid way, and directly rebuts some fundamental misconceptions about what is one
of the most powerful forces in human history.
For those reasons alone it’s a worthwhile read.
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