A History of Money

Glyn Davies

Description

A History of Money looks at how money as we know it developed through time. Starting with the barter system, the basic function of exchanging goods evolved into a monetary system based on coins made up of precious metals and, from the 1500s onwards, financial systems were established through which money became intertwined with commerce and trade, to settle by the mid-1800s into a stable system based upon Gold. This book presents its closing argument that, since the collapse of the Gold Standard, the global monetary system has undergone constant crisis and evolution continuing into the present day.

Sujets

• Monetary Policy
• Money Policy
• Economie gestion
• Economics
• Business

Informations

• Publié par: University of Wales Press
• Date de parution: 15 mai 2016
• Nombre de lectures: 0
• EAN13: 9781783163113
• Langue: English

Extrait

A History of Money
GLYN DAVIES
Revised, updated and with a new introduction by
DUNCAN CONNORS

UNIVERSITY OF WALES PRESS 2016
© The Estate of Glyn Davies, 2016
First edition 1994, reprinted 1995 Second edition (in paperback, revised with postscript) 1996, reprinted 1997 Third edition (revised) 2002, reprinted 2005, 2010 and 2013 Fourth edition (revised) 2016
© Text revision for the fourth edition Duncan Connors, 2016
All rights reserved. No part of this book may be reproduced in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this publication) without the written permission of the copyright owner except in accordance with the provisions of the Copyright, Designs and Patents Act 1988. Applications for the copyright owner’s written permission to reproduce any part of this publication should be addressed to the University of Wales Press, 10 Columbus Walk, Brigantine Place, Cardiff CF10 4UP. www.uwp.co.uk
British Library Cataloguing-in-Publication Data. A catalogue record for this book is available from the British Library.
ISBN 978-1-78316-309-0 elSBN 978-1-78316-311-3
The right of Duncan Connors and of The Estate of Glyn Davies to be identified separately as authors of this work has been asserted by them in accordance with sections 77, 78 and 79 of the Copyright, Designs and Patents Act 1988.
All efforts have been made to contact copyright holders for materials published in this volume; in the event of any copyright query, please contact the publisher.
Cover images: Old Chinese coin from Song Dynasty (960–1279) © Cl2004lhy; Gold Roman coin © Dvmsimages; Old Turkish banknote © Kwheatley; Old Mexican coin © Povarov (all images share © Dreamstime.com )
Foreword
In 1726, Daniel Defoe wrote in his book The Political History of the Devil that ‘[t]hings as certain as Death and Taxes, can be more firmly believ’d’. A History of Money has elements of both: first, because it is about money, and taxes are a big part of that; but, most importantly, because the original author Professor Glyn Davis passed away in 2003 aged 83, and it has become my privilege to continue his work. Glyn had a varied life. He was the son of a miner and hailed from the small Welsh hamlet of Aberbeeg, but grew up in a number of locations in Wales as his father searched for work during the worst years of the depression. This is exemplified by the fact that Glyn attended a grand total of sixteen schools before completing his secondary education and heading to the University College of Wales in Cardiff to study for a degree in Economics. Even this stage of his life was disrupted with the outbreak of the Second World War, leading to his voluntary enrolment in the Royal Dragoons with whom he served in North Africa and the Normandy invasion, before eventually making it to Denmark where Glyn met his wife, Grethe. Upon his return to Cardiff, Glyn finished his degree; then, whilst working as a teacher, he moved into postgraduate education through the University of London external system, and was finally appointed as a lecturer at what is today Strathclyde University. Subsequently and most prestigiously he became the inaugural Sir Julian Hodge Professor of Banking and Finance at the University of Wales Institute of Science and Technology, a precursory institution of Cardiff University.
Glyn was highly influential in the development of the modern Welsh state, becoming the very first economic advisor to the Welsh Office, and he was continually involved in the development of the modern Welsh economy advocating new industries and, indeed, the need for an expanded service sector. He was also involved with a revived Welsh banking sector in the 1970s and 1980s, acting as an advisor to the Commercial Bank of Wales and the small, private Julian Hodge Bank.
Despite becoming a fixture in Welsh academic and commercial life, Glyn is best known today for his accessible writings on the subject of banking and finance, covering a range of topics from giro banking and building societies to investment and development in Wales, Europe and across the globe. However, it is with A History of Money , written towards the end of his career, that Glyn has become best known by the populace at large, and rightly so: not only does the book provide a detailed account of the origins and development of money, but it also makes some very sound observations and predictions about the future development of money, which is where I come in, for quite a lot has happened since the third and last edition was published in 2002.
This fourth edition was prepared with two aims in mind. First, to update the narrative of money and banking to the present day and, second, to integrate some of the predictions made by Glyn on the nature of money, not least concerning the success of the euro but also the direction of the link between inflation and money supply since the 1990s. Glyn was never a fellow traveller with the euro project, and whilst he appreciated the need to reduce transaction costs in a single market, he understood fully that the economies of the Eurozone were far too divergent to allow the currency to have a pain-free gestation, birth and early childhood. My additions to this book also note that into its teens the currency is still undergoing a period of adjustment to economic realities, particularly after the economic crisis that hit Greece and other nations at the start of the Great Recession in 2008. Glyn also understood that after the fiscal reforms of the 1980s and 1990s under the banner of monetarism, or what we now refer to as the Washington Consensus, the post-war Keynesian orthodoxy was dead and a low inflationary regime would prevail for quite a while until political trends went full circle and Keynesianism became sexy again, as did happen after 2000 under the Labour governments of Tony Blair and Gordon Brown, and with the economic consequences that ensued from such a fundamental shift in fiscal policy. That we have lived in an age of austerity now for nearly the best part of a decade is a testimony to Glyn’s conviction that, in many ways, money and monetary policy is a game of swings and roundabouts heavily intertwined with the whims and ideals of a small group of people that makes decisions concerning one of the most important aspects of day-to-day life in a modern society.
Fourteen years have passed since the third edition of this book hit the shelves and, therefore, the fourth edition could never be a quick update. However, as the oft misquoted possibly Chinese or not insult reminds us, ‘May you live in interesting times’ – I can hand on heart say that preparing a new edition was more of a blessing than a curse, for I have had the opportunity to write about the collapse of great banks such as Lehman Brothers, the de facto nationalization of a substantial part of the British retail banking system, the trials and tribulations of the euro, and a phenomenon called quantitative easing used by the central banks governing the four main reserved currencies – the dollar, euro, yen and pound – to create liquidity in the economy. Writing that last line forcefully illustrates the philosophy of Glyn Davies concerning perpetual change and money. When I first wrote in this edition of the new role of the pound since the birth of the euro as the third reserve currency on an equal footing trading with the yen, I actually stopped typing and made a post on Twitter and Facebook (something Glyn would have loved, no doubt) stating that if someone had told me twenty years ago I would have been writing that line in a book, I would have thought they were mad. However, I suspect Glyn wouldn’t have been among them and would have merely accepted that as much as the fates of nations and their economies change, so do their currencies. And that is the enduring legacy of his work.
I sincerely hope that my contribution as editor and author of the new passages in A History of Money lives up to the enduring legacy of Glyn Davies, and takes the story of money forward into new and exciting times.
Duncan Connors Durham, January 2016
Acknowledgements
I must start by acknowledging my long-suffering wife, Smita, who has to put up with long hours and distracted persona whenever I embark on a writing project. Writing is a lonely and antisocial process at times, and to incorporate it into a family life of two children, Smita’s successful career, a household, alongside a hundred other activities, is a great achievement by her – she has been astounding.
It is also important to acknowledge the legacy of Glyn Davies and the role played by his estate, led by his son Roy, in formulating the idea that became the fourth edition of this book. Glyn may no longer be with us, but his presence was strongly felt when I was updating and adding content to his book. Additionally, it is also of vital importance to acknowledge the role played in the creation of the original A History of Money by the Julian Hodge Bank and by Sir Julian Hodge himself, who had a very strong relationship with Glyn Davies over many decades and was very influential in Glyn’s work.
Without the help of a fellow business and economic historian, Niall Mackenzie at Strathclyde University, I would never have started work on this book – Niall was one of the originators of the project and very kindly put me forward for the task. It is also important to thank my colleagues in the Department of Economics and Finance at Durham University Business School, in particular the head of department Professor Richard Harris, and my colleague Dr Juan Pedro Garces-Voisenat, alongside many others who were always there to provide support or discuss subjects related to this book. Additionally, I must thank my students who took my seminars in Monetary Economics and indirectly made me think about the contents of this book by always being inquisitive and engaging o