Financial History Issue 119 (Fall 2016) | Page 39

BY REVIEWER
BOOK REVIEW reach of institutions supposedly created and operated to ensure the safety and stability of the financial system .)
Foroohar is not the first to blame the country ’ s recent economic troubles on the successful efforts of this particular set of businesses to protect its profitability , or to chastise financial professionals for successfully traversing the connected worlds of business and government . To be fair , she acknowledges the skimpiness of her brief descriptions of five big ideas for restructuring the finance system to regain its role as a help — not a hindrance — to business and society .
As she hopes , Makers and Takers might indeed act as a useful starting point for encouraging a variety of stakeholders to begin assessing the finance industry ’ s outsized role in our economy . But suggesting that many evolutionary developments , practices and employment patterns have been responsible for the “ Fall of American Business ” seems to be a stretch .
Whereas Makers and Takers comments largely on financial developments during the past couple of decades , Money Changes Everything begins its story of finance ’ s contributions to society in ancient times , i . e . 3,600 BCE . Professor Goetzmann writes with an expertise not shared by many financial historians or most readers of Financial History ; he was an art history major in college and actually participated in archeological excavations . He describes finance not as an abstract idea , but as an adaptable technology used by emerging civilizations and advanced economies alike to solve problems . Most of the text traces the actions of the Mesopotamians , Greeks , Romans , Chinese , Venetians , Belgians , et al . as they developed such nowfamiliar financial tools as paper money , interest-bearing notes , mortgages , government bonds , stock exchanges and private corporations to meet the specific needs of farmers , merchants , governments and investors .
The author groups his 29 denselywritten chapters into bite-sized sections covering developments in three places ( Ancient Near East , China and Europe ) and one time period ( The Modern Era ). In each section he details the development of several financial tools and discusses their successes and failures . Certain critics have obviously not read some of his assessments about the ineffectiveness ( or actual negative consequences ) of some financial techniques . Goetzmann seems quite aware that specific financial innovations can open new possibilities for some parties while also acting as disruptive influences to others .
Some discussions of developments in ancient times and in faraway lands may not resonate with readers who lack the author ’ s historical interest and perspective ; even so , they should appreciate his explanatory summary comments that appear at the end of most chapters . The commentary on Roman finance in chapter seven seems more relatable . The reader with even a passing knowledge of the geographic breadth and longevity of Rome will recognize the elements of the financial infrastructure that Goetzmann believes sustained that empire / republic through many generations . Equally informative and familiar are sections in Part IV describing the ideas of Karl Marx and John Maynard Keynes , as well as sovereign debt , the Crash of 1929 and modern portfolio theory .
In Goetzmann ’ s very brief concluding chapter , he affirms once again that some financial techniques contributed to civilization ’ s most important achievements , while others created serious unintended problems . Similarities and differences in the conditions across time and space have led financial thinkers to devise both simple and complex solutions . Finance may or may not have “ Made Civilization Possible .” But it is hard to argue with Goetzmann ’ s concluding sentence asserting that the “ experience of five millennia of financial innovation suggests that finance and civilization will be forever intertwined .”
Michael A . Martorelli , CFA is a Director at Fairmount Partners in West Conshohocken , Pennsylvania , and a frequent contributor to Financial History . He earned his MA in History from American Military University .

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