Money makes the world go round and we all want more of it. But it’s also a human construct, one that spans the world and has evolved through incredible circumstance. These five books are essential reading for anyone who wants a better understanding of the stuff in your wallet or pixels in your bank account.
At different times, money has taken the form of rocks at the bottom of the ocean, coconuts, sea cucumbers and IOUs to a temple. Its exchange has been tracked in clay tablets, wooden sticks and the collective conscious of villages.
In short, there is a lot of history separating the paper in your monopoly box from the stuff printed by the reserve bank.
#1 Money: the Unauthorised Biography by Felix Martin
Written after the global financial crisis, Money: the Unauthorised Biography by Felix Martin, a British economist and fund manager, is a sweeping history of money. But unlike some of the more historical takes on this list, Martin’s focus is on the concept of money.
Martin’s tendency to break money down to its basic components – a medium of exchange, unit of account and store of value; may not sit well with everyone. But his concept of money as a “social technology” is very useful in understanding money’s many benefits and myriad forms.
#2 The Ascent of Money by Niall Ferguson
The Ascent of Money is more of a narrative history of money, chock full of beautiful anecdotes and stories. This is the book to read if you like to imbibe and share knowledge, like how the name “bank” comes from the seats favoured by the Florentine bankers.
Ferguson, who has written a number of other books on economic history and development, explores money in a number of ways that Martin does not. Such as how different ideas of money influenced colonialism and development, and contributed to the creation of institutions, and even whole sectors like insurance.
#3 Golden Fetters: The Gold Standard and the Great Depression by Barry Eichengreen
Some people think that only gold is money. This idea has been unfashionable in much of the economics world since at least the Great Depression, but the allure of gold is strong.
Eichengreen’s book is a reassessment of the period leading up to the Great Depression, looking specifically at gold’s fundamental role in the economic calamity that ensued. It may not sway ardent gold bugs, but it provides great context on money and the way many central bankers behave in crises today.
#4 Lords of Finance: The Bankers Who Broke the World by Liaquat Ahamed
Speaking of central bankers, Lords of Finance offers great insight into how their thoughts and actions impact the cash in your pocket. Told through the eyes of four central bankers, it details how the ideology and missteps of a few led to the Great Depression.
At minimum, Lords of Finance underlines how a few have incredible power over the value of our money. But it also highlights the influence of orthodoxy and predictions. If money is a social technology, these guys set the ground rules.
#5 Digital Gold: The Untold Story of Bitcoin by Nathaniel Popper
All of the books until now were released before the rise of bitcoin and other cryptocurrencies. If nothing else, these new currencies have solved one of the biggest roadblocks to digital currency — the double spend problem. They have also somewhat proved the thesis of many of the others on this list – money has little to do with official sanction, more with fulfilling certain requirements.
But at its heart, Digital Gold is the story of the creation of an entirely new form money. As Martin and Ferguson point out, this is something that has happened over and over. But it is absolutely fascinating to watch in real time, and this book is a good primer.