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13 of 15 people found the following review helpful
5.0 out of 5 stars Intelligent, important, absorbing, enjoyable
This is a thoroughly absorbing account of the evolution of the concept of money, placing the central question - essentially an economic one - within a historical, philosophical, political and social framework that hugely adds to the pleasure of the reading experience. From the primitive tribe using for generations as a form of money an enormous thick stone wheel lying at...
Published 13 months ago by Dominic

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37 of 52 people found the following review helpful
3.0 out of 5 stars Original, or confused?
Felix Martin tempts fate by opening with a quote from A. H. Quiggan: "Everyone, except an economist, knows what 'money' means." Martin is a former World Bank economist, and at the end of this book, I sympathised with Quiggin.

After 260 pages of heavy-going argument, Martin concludes that money is: "not a thing but a social technology - a set of ideas and...
Published 13 months ago by Eric Lonergan


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13 of 15 people found the following review helpful
5.0 out of 5 stars Intelligent, important, absorbing, enjoyable, 7 Jun 2013
This is a thoroughly absorbing account of the evolution of the concept of money, placing the central question - essentially an economic one - within a historical, philosophical, political and social framework that hugely adds to the pleasure of the reading experience. From the primitive tribe using for generations as a form of money an enormous thick stone wheel lying at the bottom of the Pacific ocean to the credits used by modern-day babysitting circles, taking in along its way profligate Dauphins, sixteenth century vampire squids, rituals of sacrificial feasts in Ancient Greece and the credit crisis in Ancient Rome (and its eerie resonance with our own modern-day equivalent), Martin's examples and analogies both entertain and illuminate his thesis, identifying the common threads in economic crises throughout history that are highly pertinent to our contemporary financial tribulations, and ultimately showing a possible route out of them. I highly recommend.
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37 of 52 people found the following review helpful
3.0 out of 5 stars Original, or confused?, 6 Jun 2013
By 
Eric Lonergan - See all my reviews
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This review is from: Money: The Unauthorised Biography (Kindle Edition)
Felix Martin tempts fate by opening with a quote from A. H. Quiggan: "Everyone, except an economist, knows what 'money' means." Martin is a former World Bank economist, and at the end of this book, I sympathised with Quiggin.

After 260 pages of heavy-going argument, Martin concludes that money is: "not a thing but a social technology - a set of ideas and practices for organising society. To be precise (!) ... [money] is a concept of universally applicable economic value."

Earlier he states that: "Coins and currency ... are useful tokens to record the underlying system of credit accounts and to implement the underlying process of clearing."

Rather than providing a new and counter-intuitive insight into money, which he claims, there is analytical confusion.

A logical fallacy in much analysis of money is repeated here: because debts have often been used as money, it does not follow that money is a debt. Martin's novel version of this fallacy is to argue that because we use credit accounts and a clearing system to net off payments, this makes the credit and clearing system "money". This is a logical error. The standard definition of money - anything accepted as payment for goods and services - is clear, and distinguishes it from debt and the clearing system. This definition does not assume, as Martin implies, that money is a "commodity". The accepted means of payment, as his many examples illustrate, can be physical, or abstract (or virtual).

This is really a history book, which claims to have identified an unconventional and more relevant understanding of what money is. There is lots of history, but the central thesis is unconvincing. Martin goes as far as to suggest that a flawed definition of money, with intellectual roots in Locke and even Aristotle, explains the economics professions' failure to foresee the financial crisis. We know this to be false. Economic policymakers and academics ignored the financial system. The reason is not because they had incorrectly defined money, it is because they focus on the last problem. The obsession with inflation targeting was a prolonged response to the inflation shock of the 1970s and 80s. Unsurprisingly, economists - academics and policymakers - are now producing a vast literature on the financial system, banking and asset bubbles, without any re-definition of "money" (and it goes without saying that the next problem will lie elsewhere).

Consistent with this mainstream response, Martin places far too much faith in the idea that "narrow" banking will save the world. It is a variant of the old proposal that when you deposit money with a bank, it should hold an equivalent amount of cash in reserve. This view re-emerges in some form after every major banking crisis. Friedman was an advocate in the 1950s. The interesting question, which Martin evades, is why it is never adopted. Perhaps it is not such a good idea.

I had looked forward to reading this book. Martin's main argument is initially intriguing and there's plenty of history, but ultimately it is unconvincing and confused. For really good histories of money, I would first read Milton Friedman's Money Mischief or Paper Promises by Philip Coggan. The absence of reference to either of these is odd. Even more so is the superficial dismissal of Hayek, without reference to his views on money. Hayek's economics is flawed, but his insights into money, drawing on David Hume, are profound, and close to Martin's. Indeed, Martin's "novel" idea - that money is a social institution, not a physical object - originates with Hume, who is unacknowledged. These omissions, and errors of fact, do not reassure the reader. For an example of the latter, Domingo Cavallo, Argentina's former economy minster and a central figure in Chapter 4, is re-christened "Domenico". An error repeated in the Index.
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2 of 3 people found the following review helpful
5.0 out of 5 stars This repaid my intererest, 15 Sep 2013
By 
Petrolhead (Hong Kong) - See all my reviews
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This book is deliberately, even pugnaciously, confident of its message: what money is, why people are wrong about it, and what it can tell us about today's economy.

Even if you are not convinced by the arguments (and there seem to be a lot of reviewers here who know better), the author makes a bold and even brilliant case for reassessing our understanding of what money is. He sets out a fascinating history of the evolution of our economic system, and wraps it up with a Platonic dialogue that refreshes all his arguments most usefully.

This was most welcome because I found the book starts with an almost pop-history lightness that makes it easy to read, then gets more serious as the author takes us through the history, and finally gets rather heavily into the economics of the latest financial crisis. So by the time I reached the end sections I was having to engage my brain more and more to keep up to speed.

I'm glad I read it, and personally thought it was a very persuasive and original work.
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10 of 15 people found the following review helpful
2.0 out of 5 stars Starts very well but then....., 21 July 2013
By 
Pelagius Kung (London, England) - See all my reviews
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This books starts very well by questioning the standard definition of money. It makes a very good (but by no means original) argument that money does not start with commodities such as precious metals, leading on to the evolution of paper and fiat money; quite the reverse in fact, the series of mutual obligations, credits and debits that make up the vast proportion of modern money (i.e. bank accounts and securities) came first.
This really turns most of modern economics and finance on it's head. However it an argument made more convincingly and with more detail in "Debt the first 5,000 Years" by David Graeber.
Unfortunately after a very entertaining serious of iconoclastic chapters the real problem emerges. The author desperately wants to say something about how the world should by but it just meanders off into incoherence.
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3 of 5 people found the following review helpful
4.0 out of 5 stars Some interesting ideas but the final arguments are flawed, 30 Jun 2013
By 
A. RAWICZ-SZCZERBO (Devon, UK) - See all my reviews
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This review is from: Money: The Unauthorised Biography (Kindle Edition)
This is a very interesting book about the history of money including some of the more bizarre events and form of money
The author then justifies e above t demonstrate that the view of modern economics that "Money is a commodity" is flawed which has led to flawed policy responses to economic crises
There are some good arguments and its worth a read, but his final prescription does not quite convince. It has the sense of groping for but not quite grasping the final clinching arguments.
So it's either wrong or slightly flawed. Read it yourself and decide !
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0 of 1 people found the following review helpful
5.0 out of 5 stars illumaniting book, 29 May 2014
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A must read book for everyone. All the beliefs i had about money have been blown out of the water.
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0 of 1 people found the following review helpful
5.0 out of 5 stars A creditworthy account, 22 Aug 2013
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This is great book for those with an interest in finance, economics and society. The author challenges a common view of money as originally a physical commodity, such as gold and silver, from which systems of credit derived. He finds this view in Locke, Adam Smith and John Stuart Mill, where it leads to the view that money is a medium of exchange that cancels itself out and can be safely neglected in economic theory. The survival of metal coins and destruction of paper credit notes give undue plausibility to this view.

To this he opposes an account of money as quantified, transferable social credit, which he attributes to John Law, Walter Bagehot (author of Lombard Street) and John Maynard Keynes, also tracing it back (unnecessarily perhaps) to ancient Greece. This view facilitates a more accurate understanding of the relations of private money and the state. Martin gives an interesting account of medieval bills of exchange that were not backed by a state. He attributes Locke's rejection of the transferable credit theory to a Whig desire to limit state power at a time when the state was beginning to be used to underwrite the currency through central banks in modern fashion. I liked his suspicion that the obscurity of some discussions of money is typical of those trying to keep a valuable trade secret.

Other reviewers have claimed that Martin overreaches himself towards the end in trying to advise contemporary politicians and I have some sympathy with this. He perhaps confuses the fact that something is social with the idea that it can be changed at will. The last chapter gives a clear summary of his basic ideas for those lost in the argument. Overall, I felt that I had learned a lot about money and its social significance from this book.
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4 of 8 people found the following review helpful
5.0 out of 5 stars Bold, interesting and insightful, 6 Jun 2013
This review is from: Money: The Unauthorised Biography (Kindle Edition)
A well written, accessible and highly informative book that presents a unique and convincing argument: the book really does do what it claims and radically shatters preconceptions of money. Particularly interesting and relevant material in this current climate against the backdrop of recession.
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2 of 5 people found the following review helpful
5.0 out of 5 stars Challenging conventional wisdom, 23 Oct 2013
By 
Steve Keen "therealus" (Herts, UK) - See all my reviews
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The conventional wisdom about how money developed has barter historically replaced by a commodity of value as currency. It's not that long since I was taught that. And of course, like so much conventional wisdom, it turns out to be wrong. Instead, says Felix Martin, money is transferable credit, as he demonstrates lavishly with illustrations quaint (like the stone money of the Pacific island of Yap) and banal (the tally sticks formerly used by the Bank of England), and tracks the invention of literacy, mathematics and accountancy to Mesopotamia, and the earliest "accounts" to around the fourth millennium BCE (or BC, about which more later), first in the form of conical tokens, subsequently by triangular impressions on clay tablets.

The popular misconception of what money is he partly blames on none other than John Locke, who repudiated the word of William Lowndes, then Secretary to the Treasury, saying that silver represented money, and that the pound had devalued not because it was losing competitiveness but because people kept shaving bits off silver coins, an error which cost the Treasury and many innocent citizens much money. Worse, it was a notion echoed by none other than Adam Smith.

At this point, not for the only time, Martin goes off-piste with a tale of how The Economist, inspired by Smith, opposed aid to those affected by the Irish potato famine on the basis of the risk of moral hazard. The politicians acted on this advice, at the cost of millions of lives, although possibly rescuing a number of US cities from a labour shortage, particularly in their police forces. However, the tale clearly indicates the potential consequences of the Tea Party.

The Economist is later exonerated by its editor Walter Bagehot, whose book Lombard Street characterised money as transferrable credit, and sought to explain that a key factor in its maintenance is confidence, or trust, which can be underwritten by government. Bagehot thus effectively repudiated Say's Law, which said that in the face of recession nothing could be done by government, that the system would cure itself. As Keynes's work also showed, this is bunk.

In addressing the current financial crisis, Martin identifies two related problems: that the models of financial economics ignore macroeconomics, and macroeconomics, by which central bankers tend to be informed, has a tendency to overlook money, banks and finance. He cites Fischer Black, one of the developers of options theory, declaring that derivatives posed no systemic risk; the only source of such risk, he said, was government. But he also points out that the Arrow and Debreu General Equilibrium model claimed to prove Say's Law mathematically, but on the assumption of no money. He might also have pointed out that the otherwise sound theory of comparative advantage only works 100% of the time if money is discarded as a significant factor.

Inevitably, Martin cannot resist taking a stab at proposing a solution to the world's financial problems, a part of which is based on the principles by which John Law once bankrupted France (Martin does admit this early on, and makes an admirable attempt at defending the hapless Scot). This is where he really goes off piste, and he would possibly have been better doing what all unauthorised biographers generally end up doing, by further besmirching the reputation of their subjects. Surely there are compromising photographs of money in an opium den somewhere?

Nevertheless, up to that point the author does an excellent job, and maybe I'm just being my usual, overgrown adolescent self in brushing aside his advice.

Just as a footnote, it has to be said that, on the whole, the editing in Money is excellent, with only one real slip-up that I found (asset-backed commercial paper becoming "asset-back commercial paper"). But there is throughout an irritating inability to use possessives: Furness', Keynes', business'. The guy has a CV a mile long and he can't get his head around that! Some idiot somewhere may have decreed that these words required no s after the apostrophe, but whatever the identity of said imbecile, the decree defies common sense and logic. Perhaps it was the same person who decided 63d as an expression of money requires a full stop after it in the middle of a sentence.

It's also disappointing that he uses the BC/AD convention rather than the secular BCE/CE, which is still imperfect culturally but avoids the question of which "lord" is being referred to. And he sometimes has a tendency to overdescribe, as in "the great Chinese military thinker Sun Tzu" where "Sun Tzu" would have sufficed.
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1 of 4 people found the following review helpful
5.0 out of 5 stars Really interesting, 7 Nov 2013
By 
J. Khambatta (UK) - See all my reviews
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This review is from: Money: The Unauthorised Biography (Kindle Edition)
A great read. Taught me lots about money and it's history and what it actually is.
Should be made a compulsory read!
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