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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www . MoAF . org | Fall 2016 | FINANCIAL HISTORY 37