Paper Promises
Debt, Money, and the New World Order
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- $11.99
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- $11.99
Publisher Description
Winner of the Spear's Best Business Book Award
Longlisted for the 2012 Financial Times and Goldman Sachs Business Book of the Year Award
For the past forty years western economies have splurged on debt. Now, as the reality dawns that many debts cannot be repaid, we find ourselves again in crisis. But the oncoming defaults have a time-worn place in our economic history. As with the crises in the 1930s and 1970s, governments will fall, currencies will lose their value, and new systems will emerge. Just as Britain set the terms of the international system in the nineteenth century, and America in the twentieth century, a new system will be set by today's creditors in China and the Middle East. In the process, rich will be pitted against poor, young against old, public sector workers against taxpayers and one country against another.
In Paper Promises, Economist columnist Philip Coggan helps us to understand the origins of this mess and how it will affect the new global economy by explaining how our attitudes towards debt have changed throughout history, and how they may be about to change again.
PUBLISHERS WEEKLY
Coggan (The Money Machine) traces "history's tug of war between monetary shortage and excess" in this engaging and timely book about the current financial crisis. From early stages of money forms, the author portrays a clash of opposing forces and ideologies: sound money or easy money, fixed rates or floating rates, creditors or debtors. Governments' role in monetary policy is given particular attention with respect to the Keynesian/monetarist debate: do we use fiscal stimulus to interfere with the markets or do we give it free rein? Through many diverse topics exchange rates (being "the history of paper money") and the forces driving their wide and volatile swings, bubbles, "debt-fueled booms," and the Minsky effect Coggan outlines his main thesis: "Money (debt) expanded to gratify the desire of the consumers and businesses for greater economic activity (more trade)." The book concludes with a discussion of the consequences of the debt crisis, namely, "inflation, stagnation and default," and outlines a new system. A history of economics is avoided; many major economists, such as Marx, Marshall, and Walras, never show up. However, these omissions prove expedient and allow this otherwise dense treatment to maintain direction and flow. A thoughtful and thorough book aimed at the layperson.
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