Saturday, February 16, 2008

Financial history, anyone?

The history of credit and banking goes back much further than the history of coins. Nevertheless the story of the origins of money goes back even further still.

Warfare, with its appalling humanitarian consequences and vast economic costs, has stimulated financial innovations from the spread of coinage to the creation of the national debt. Conversely, economic weakness and the inability to properly utilize financial resources have been causes of military defeats.

One of Glyn Davies's main themes is the problem of simultaneously trying to control the quality and quantity of money. He discusses many cases of inflation over the past couple of thousand years and identifies several (not necessarily mutually exclusive) causes.

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