Money: The unauthorised biography, by Felix Martin

Felix Martin's overview of the history of money shows that ancient credit systems could provide the road map out of a modern-day debt crisis.

Felix Martin, a macroeconomist, bond investor and scholar, thinks the Pacific island of Yap was on to something we could learn from. Its unit of measurement was a series of heavy limestone wheels, which couldn't have fit in islanders' pockets, but could be used to manage a sophisticated credit system that kept track of trade in fish and sea-cucumbers.

Money, he argues, is not a tangible thing, but rather a social construct. And classical economics went wrong in granting real worth to a system of credit management, which is ultimately political in nature. In addition to interesting insights into the history of money, Martin offers advice on how to prevent another debt crisis. One proposal is a return to segregated banking functions, with governments providing backing for only the most basic services. Why, he asks, have we privatized the profits and socialized the risks in a financial system based on speculation?

About the Author

Susan Smith

Susan Smith is a freelance writer in Toronto.

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