Neil Ferguson's "The Ascent of Money" (book and mini-series) is a good primer.

It was important because the gold value of paper money could probably be considered a bet on who was going to win the war.

Check out Neil Furgason's The Ascent of Money.

Niall Ferguson's "The Ascent of Money" is pretty good:

http://en.wikipedia.org/wiki/The_Ascent_of_Money

It's a fairly readable history of money, credit and related topics (e.g. the bond market and insurance).

"The Ascent of Money" by Niall Ferguson is my favorite introduction to the subject. It may or may not support parent's claims.

See also The Ascent of Money by Niall Ferguson - it gives a good overview of the history of banking and related subjects: https://www.amazon.com/Ascent-Money-Financial-History-World-...

Of course, there was an implicit "from here in the UK and from a very comfortable middle class home" in my statement there...

[NB Anyway I stole the point from the start of Niall Ferguson's The Ascent of Money]

I read 'Debt' a few years ago. Am currently reading Niall Ferguson's 'The Ascent of Money' which dives more into the details of how our banking and monetary systems arose. Only two chapters in, but I would recommend already.

[0] https://en.wikipedia.org/wiki/The_Ascent_of_Money

While I haven't read the book, the corresponding multi-part documentary "The Ascent of Money" is a really good introduction to what money is and how it evolved over the past centuries. It's also free on YouTube: https://www.youtube.com/watch?v=JAbVltqySrA

I thought Niall Ferguson's The Ascent of Money to be an informative book the history of money if you're looking for more topical reading.

> https://en.wikipedia.org/wiki/The_Ascent_of_Money

Ferguson is someone whose contemporary political writings have really pissed me off, but his longer-view historical works (I've read The Ascent of Money but not yet Civilisation) are fairly insightful.

I've also been looking at and for texts on money. Adam Smith and William Stanley Jevons are two of the earlier significant works. Reading Milton Friedman probably has value. Keynes as well.

Niall Ferguson's The Ascent of Money is a well-received popular work on money, trade, and exchange.

(NB: I'm not particularly well-disposed toward either Friedman or Ferguson.)

Actually, perpetual property rights and unclear title are a huge problem with real estate and capital formation in South America especially. See Hernando de Soto's Mystery of Capital or Niall Ferguson's The Ascent of Money.

Perpetuities ultimately end up with contending claims. Adjudicating those is tremendously expensive.

Top of my list would be "the ascent of money", by Harvard Prof Niall Ferguson. It explains what money and financial instruments are, by telling the stories of their history. Hes a great story teller, and for each aspect of finance that he explains, there's a story of a famous piece of history which it caused. For example, the application of oriental maths to finance caused a huge boom for Italian bankers, especially including one family, the Medici. That financial boom was responsible for the artistic boom we call Renaissance art. Or how the Dutch republic triumphed over the enormous Hapsburg empire, because the world's largest silver mine couldn't compete with the world's first stock market.

Fantastic read, and a great way to gain financial literacy.

I started "The Ascent of Money" and was very happy with the first half or so - then I set it aside for a few years and worked for a hedge fund. When I picked the book up again I couldn't stand how basic, boring, and mistaken the second half was. I wish I could follow your example and suggest a better book :)

The Ascent of Money is filled with great citations to the academic literature. Don't have my copy handy, but you should check it out if you're interested in more info about fractional reserves.

You should also read up on "natural experiments." They got us things like the elimination of cholera from major metropolitan areas, the link between smoking and heart disease, and Hubble's Law describing the expansion of the universe. Sometimes looking at the world tells us stuff about the world.

You should also maybe check out the work of John Ioannidis, and the hoax research of John Bohannon, and articles on publication bias. Check out how frequently lab p-values cluster just around publishable.

We've reached a weird state where, give me a natural experiment in economics, where the author actually has to think about and discount possible alternative explanations sufficiently to sway aggressive critics on a contentious topic. Then give me a modern nutrition study claiming that some fad food abruptly cures cancer in rats, with a convenient p of exactly 0.05, which becomes an isolated media frenzy before it's never cited again. I'm going to treat the economics with far more deference, despite my general fondness for double-blind RCT.

EDIT: Also, the original reference was a simile, signaled by words like "essentially" and "like." Ease up a bit with the 'toy words' accusations, I was not trying to claim economics is literally indistinguishable from physics, just that the case studies here are surprisingly compelling, and seem to point in one clear direction.

I watched a very good series recently called "The Ascent of Money", offers many good insights into these matters. It's available in full on youtube for those interested.

Ultimately though, all talk of policy is a fools errand and utterly useless unless the overarching corruption in our political system is addressed. The free market dictates that companies can be expected to maximize their profits by whatever means necessary, and it's up to government to make sure "whatever means necessary" stays within an acceptable domain that protects key public interests. The primary requisite for the advancement of any civilization is it's resistance to corruption, and nothing short of a total overhaul will even put a dent on the decline we're experiencing. Until the era of pay-for-play and superPACS is brought to an end, legislation will always mold itself to induce the greatest profits for big corporations at the expense of every other interest.

EDIT: I should add as well though that the other side of this coin is that we as consumers CAN have a great influence outside of politics by voting with our dollars. If everyone refused to buy cheap Chinese goods and boycott Wal-Mart, enacting protectionist policies to protect American manufacturing wouldn't even be necessary. If we refused to put our money in banks involved in scandals or do business with their partners they'd soon be out of business. Alas, there in lies the other doom of the free market; as consumers we can be expected to act exactly in our own interests, which dictates buying the cheapest goods and most attractive deals regardless of the greater effects. There has to be a mass change in psychology, a great awakening. Hmm, good start up idea???!!

I’d add “The ascent of money” by Niall Ferguson to a list of books to read to understand invention of money.

This is a weird, angry screed.

Op should read The Ascent of Money and maybe worry less about the moral failings of other humans.

Peace and trust cannot exist without currency. Money lubricates peaceful resolution of conflict.

If you need food and I have it, trade or violence are your only options if currency doesn’t exist.

Screaming at Bitcoin is like screaming at evolution. As long as humans evolve, money will keep pace.

One of the primary reasons I read books is to get a wider perspective on how everything works. It's true that the first read is barely enough to recall any details but it's suffice to grasp the essence. And often, essence is all I want. I can barely recall anything from "The Ascent of Money" but the book enabled me to finally understand the financial system—How money works? Where does it come from? Why does US has $18T of federal debt? All questions became crystal clear because of the book's simplicity.

I don't feel good about re-reading because there are tons of similar books which can explain things in intriguing way to leave a lasting impression. Unless I run out of options in that category, reading more seems a better choice.

Take a look at the Economics & Finance videos on Khan Academy [1]. I have only watched some of them, but those I watched were good.

You could read some standard macroeconomics textbooks, but I'd advise against doing that, since they are expensive and unnecessarily formalized using elementary math, which doesn't really add anything to the material itself. There's however a good book on monetary economics by Mishkin called Economics of Money, Banking and Financial Markets, which is really good, but the Khan Academy videos on banking mostly cover the same material.

Personally I've learned a lot from reading economic history. Some books I can recommend are:
Eichengreen - Globalizing Capital: A History of the International Monetary System

Frieden - Global Capitalism: Its Fall and Rise in the Twentieth Century

Soros - Alchemy of Finance (skip the first couple of chapters on his reflexivity theory, but the 'diary' chapters are a gold mine)

Ferguson - The Ascent of Money (probably a good book to start, the others might be harder to completely grasp for a beginner)

Some other good book I can recommend (not history books) are:
The Secrets of Economic Indicators: Hidden Clues to Future Economic Trends and Investment Opportunities by Baumohl

Inside the House of Money by Drobny (mostly about global macro trading, but you would learn a lot about economics along the way, would only recommend this after having built up some basic knowledge though)

Most importantly you should start reading the Economist, which has really high quality economics and finance articles, but is released only weekly and offers a good trade off with regards to time commitment and knowledge about what's going on in the world. Note that you will probably need to know some basics in order to understand everything, but you can look up things along the way. Economics really isn't hard to learn if you have a technical background.

[1] https://www.youtube.com/user/khanacademy/playlists?view=50&s...

You're welcome. I'm not going to claim great insight (yet), I'm still stumbling through this stuff myself (and have been for 25 years).

Other than Mancur Olsen, some of the more interesting reading I've found includes George Akerlof ("The Market for Lemons"), Garrett Hardin ("Lifeboat Ethics", "Tragedy of the Commons", and several books of essays), Neal Stephenson's Baroque Cycle (a cunningly disguised treatise on the emergence of stock corporations, banking, and modern finance and capital), Niall Fergusson's The Ascent of Money (a less cunningly disguised version of same), and The Ordinary Business of Life which is dry as dust but still a wonderful exposition of 3000 years of economic thought.

A book I've just heard of but haven't read is David Graeber's Debt: The First 5,000 Years. He's a radical anthropologist, but has some really keen insights and views on the formation of credit and money (guess which came first).

That's an empirical question, and deserves an empirical treatment. I cannot do that in a comment. Luckily, this question has been thoroughly investigated for almost two centuries. If you want a serious treatment, you might look to:

http://www.jstor.org/stable/825483?seq=2
http://heinonline.org/HOL/Page?handle=hein.journals/uclr52&d...

But if you want a more casual treatment that explains it (and all the associated issues like why bonds and stocks and debt contracts even exist), I really recommend The Ascent of Money by Niall Ferguson.

That’s exactly how I felt about a previous book of his, The Ascent of Money, which was released at the height of the financial crisis in 2008 and then rushed into production as a TV documentary. One review accurately called it “rushed and uneven”. (https://en.m.wikipedia.org/wiki/The_Ascent_of_Money)

The Ascent of Money (Niall Fergusson)

Christ, tell me about it. The presence of one fiat/debt conspiracy theorist in the comments is far less troubling than the collection of commenters seemingly amazed at his insight. Let's not even get into the the smug myopia of Murray "legal obligations to feed and clothe children are state oppression" Rothbard that is also getting trotted out.

Fiat currency is, of course, an improvement over previous precious metal-backed currencies. When you can't control the price of gold (or worse, leave the value of your currency as subject to private or foreign manipulation) prices become much more volatile, making it difficult to operate in the economy with much certainty. Fiat currencies also allow for the impact of recessions to be lessened by (for example) lowering the interest rates for the inter-bank loans it provides thus encouraging savings to be redistributed as consumption.

The fact that the bank is privately owned is both due to a need for independence from the political process (see Zimbabwe for exhibit A why this is a bad idea), and a relic due to the fact that banknotes were issued by a number of different institutions until it was decided that these competing standards should be replaced by one with authority vested in and financially backed by the state.

The Ascent of Money by Niall Ferguson is an easy book to get acquainted with the story and evidence supporting fiat currencies today.

You bring out a very interesting fact. A not-so-known side effect of all that mining is that it flooded the Spanish markets in that era with so much silver that it lost its value. Niall Ferguson in “The Ascent of Money” suggests that all that silver in Spain couldn’t really prevent Spain from financial headaches. Makes you wonder if the first QE was way back in 1500s , doesn’t it? :-)

Yeah I've read The Ascent of Money too, it was great. You'll enjoy Civilisation.

Although after learning of his political views(I don't live in the US), I couldn't help but wonder how much it influenced his views in Civilisation. It comes off as a bit overly biased in favour of Europeans (read: the white man) when seen in this new light. For example, he tries to argue that church attendance being down is a sign that European influence/culture is declining.

> Debt, the first 5,000 years - for understanding money and finance from the ground up

Having picked this a few weeks ago, I am finding it hard to finish because of the ponderous writing. I admit that first few chapters were a revelation, but the cultural verbosity regarding everything becomes wearing quickly. "The Ascent of Money" is much better primer on the evolution of financial system.

I don't know why I'm responding to this as I can tell I'm trying to have a discussion about pragmatism with someone who's goals are ideological.

Bitcoin solves none of these problems. Fractional reserve banking, the mutability of the money supply, interest: all of that will continue to exist regardless of currency. Just as people borrowed money on interest when gold was the currency (or the standard) people will do so with bitcoin. These financial tools were created from necessity, not as "tools of oppression". Bitcoin will be saddled with the same financial services (banks, credit and so on) that currencies always have been because, for better or worse, we need those services. I recommend The Ascent of Money as I feel it’s a fairly nice, brief history of financial services.

But that's really beside the point. People don't make decisions about their money based on ideology; they make it based on what they need to buy food, clothing, shelter, entertainment and all the other stuff they transact every day. If I go out to people on the street and give them bitcoins and tell them it will free them from oppression, they will still pull out their dollars to buy milk because that's what the supermarket takes. There's no shaking of the shackles of oppression here because the shackles are social, not financial. The exercise of power and oppression goes much deeper than the kind of currency we use.

I read The Ascent of Money, by Niall Ferguson over the summer and I am reminded of a passage discussing Argentina:

"So successful did Argentina's default prove (economic growth has since surged while bond spreads are back in the 300-500 basis point range) that many economists were left to ponder why any sovereign debtor ever honours its commitments to foreign bondholders"

http://books.google.com/books?id=JA_IYJ0P4ZkC&lpg=PA4...