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Martin, Felix

Money: The Unauthorised Biography

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For some people, money is merely something underwritten by the state and designed to enhance a basic barter economy. Felix Martin, an economist and fund manager, goes further. Early societies, such as the Babylonians and the ancient Egyptians, were static, with a fixed hierarchy of social obligations. They had no need of money or currency. Money was the instrument through which later societies unshackled themselves from preordained social orders and became individualistic.

With money came speculation, bringing in turn those endemic financial crises. To ensure greater stability, Mr Martin would like to see the introduction of an ultra-simple version of “limited-purpose banking”. Money must be “shorn of its specious promise” he says; let the state underwrite a tiny core of deposit-taking banks. Everything else—from interest-rate derivatives to collateralised debt obligations should carry on unregulated and uninsured. If you lose your dough, tough. You knew the risks. It is a solution that will attract anyone seeking a clean, clear, fair way of managing financial markets. Until they lose their money, of course.

Some of his proposals, involving debt-waivers and deliberate high inflation, seem to have obvious drawbacks in terms of perverse consequences for future behaviour.

Drawing on stories from throughout human history and around the globe, Money will radically rearrange your understanding of the world and shows how money can once again become the most powerful force for freedom we have ever known.

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