money changes everythingRegular readers know that from time to time I publish my reviews of books that I have recently read. I also publish guest posts from time to time as well. In variance that combines these two practices, today I am posting a guest book review, by fellow Clevelander, attorney, and writer Mark Gamin. In this guest post, Gamin reviews the recent book by Yale School of Management Professor William N. Goetzmann entitled Money Changes Everything: How Finances Made Civilization Possible. I would like to thank Mark for his willingness to publish his guest post on this site. I welcome guest post submissions on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Mark’s guest post.




MONEY CHANGES EVERYTHING:  How Finance Made Civilization Possible.  By William N. Goetzmann.  Princeton University Press, 584 pp., $35.


People in Florence, Italy 600 years ago valued good footwear, obviously.  The wealthiest Florentines back then, according to a recent Wall Street Journal article, were members of the shoemakers’ guild, with incomes in the 97th percentile.  (The expertise and usefulness of lawyers were valued slightly less – their income was at the 93rd percentile.)


But the real import of the Journal article, the thing that makes you stop and think, is this:   studies show that the wealthiest Florentines today are descended from the wealthiest Florentines of 600 years ago – they’re members of the same, very extended, families.  Whether this makes you feel better about your own great-great-great grandparents may have something to do with whether you drive a Ford car or a Ferrari, or wear Florsheim shoes or Ferragamo.


And it also raises the question:  how far back, assuming the data were available, could this propensity be traced?  Probably not to the first man and first woman, but perhaps to Mesopotamia — “the very shadow of the Gates of Eden” as author William N. Goetzmann calls it.  It was here where the concept of debt, and of interest on debt to incentivize lending, arose.  It was “the most significant of all innovations in the history of finance,” Goetzmann says, in his terrific new book, “Money Changes Everything:   How Finance Made Civilization Possible.”


In his Introduction, Goetzmann disclaims that the book is a comprehensive financial history of the world, and warns the reader that the book reflects his personal interests and experience.  On both counts:  thank goodness.  Those two things are not defects, but  part of the charm of the book.  “Money Changes Everything” is an idiosyncratic — a wonderfully idiosyncratic — journey through humankind’s experience with “coins, loans, and partnership agreements,” and many of the other facets of what we know as finance — the mathematics of probability, the corporate business form, and insurance, to name a few.


Goetzmann is perfectly qualified to write any sort of financial history he wants, being a professor at the Yale School of Management.  But his background also includes the unexpected:  he was an art history major (of all things), and “in my pre-professional days,” he says, he helped to excavate an ancient town on an ancient caravan trade route, Tell Leilan, in northeastern Syria.  (Indeed, much of the early part of the book – about Babylon, Athens, and Rome — concerns archaeology as much as finance.)


And China, as well.  Chinese financial culture is not the focus of the book, but a subject of Goetzmann’s “personal research interest over the last two decades” so, at regular intervals, he turns to contemporaneous happenings in China to compare them to western developments.


For example, the corporate form of business enterprise was arrived at in 1407 in Genoa (or the twelfth century, in Toulouse, France; or 1555 in England – there are multiple candidates for the world’s first corporation, and Goetzmann’s treatment of them, including the non-obvious examples, is fascinating).


China had a robust and complex financial system for millennia, later compromised by European financial colonization and such shameful incidents as the opium trade.  But it was not until 1905 that China adopted corporate governance, and the requisite corporate legal code, which it quickly adapted to suit its distinctive purposes.  (This lasted until 1949, with the advent of communist rule.)  The corporation, Goetzmann says, “is a very stable equilibrium – a kind of complex economic ‘game’ that can be applied to many different kinds of enterprises and allows for many different players.”


Goetzmann’s presentation is sophisticated, and he makes extensive use of other financial experts across various sub-specialities, many of whom he appears to know on a first-name basis.  But his book is readily accessible to the intelligent layperson.  Every chapter is introduced with an outline of the topics to be covered – a prospectus of sorts – and finished with a summary recapitulation.  Even seemingly esoteric topics — the role of the Dutch insurance industry in the financial bubble of 1720, say – are, in Goetzmann’s delightful prose, never a slog.


In terms of writing, apt illustrations, and eye-pleasing design, “Money Changes Everything” is a well-built book.  But there’s one more “well-built” factor that merits mention — not the most important one when assessing a book, but far from the least.  This book is solid and handsome, bound with craftsmanship, and printed on heavy, quality paper.  The spine has the title in thick gold letters, appropriate to the subject.  It’s a book made to last, and a pleasure to hold in your hands.  That’s not something one can say about a lot of books these days, except for those issued by certain small presses and university presses, especially the Princeton University Press, which appears to pride itself on the physical object as much as the writing being published within the physical object:  “Money Changes Everything” is altogether a splendid book.


Mark Gamin is a Cleveland lawyer and writer.