The Little Money Book

by David Boyle

They say money is the root of all evil. That's debatable, but one thing that's not is that money and its attendant enterprises--buying, selling, lending, borrowing, credit cards, the stock market and banking--is an inescapable component of the fabric of modern life. How did this come to be? Money and the complex system that makes it work is a manmade product that we invented and yet, like Frankenstein, it has us all in its grip. From the poorest to the wealthiest, we worry about money. This highly accessible and easytoread synthesis of complex subjects asks some of the obvious questions about money and finance that few of us stop to think about. For instance, what is the real "value" of money? Well, astonishingly, nobody agrees. But most people seem to accept that it is lent into existence by the commercial banks. When you stash money in the bank, they must keep around 8 percent of that loan on deposit--in case there's a run on the bank--but all the rest is lent out again many times over. In other words, most of our mortgages and bank loans are created as if by magic by a stroke of the pen. That's the strange truth behind modern money. We don't mine it, we don't find it on a beach, it bears no relation to anything real, but still some people have vast amounts of it and some people have none at all. And we hardly ever talk about it.

Genres: Economics, Nonfiction

192 pages, Paperback

First published December 1, 2003

About the author

David Courtney Boyle was a British author and journalist who wrote mainly about history and new ideas in economics, money, business, and culture. He lived in Steyning in West Sussex.
He conducted an independent review for the Treasury and the Cabinet Office on public demand for choice in public services which reported in 2013. Boyle was a co-founder and policy director of Radix, which he characterized in 2017 as a radical centrist think tank. He was also co-director of the mutual think tank New Weather Institute.

Reviews

[Tessa · Rating 3 out of 5]

I view the current state of the international capitalist/financial system as somewhat inevitable (oops massive status quo bias) but the number of hungry people abandoned by its machinations makes me want to oppose it. So I am trying to learn more about how this system came about and started with this Little Book.

This book leans hard left but I didn't pick up any glaring inaccuracies. However, it would be interesting to read a book on the current capitalist/financial system by someone who supports it.

The overall thrust of the book is a criticism of how we've allowed money become more virtual (by, e.g., letting banks give loans with higher interest while requiring them to keep less cash on hand, creating lots of future money) and allowed it be treated as a commodity in and of itself. This further allows people to become very wealthy through the financial services economy and directs money away from concrete, local-scale things like farms and hardware stores. Quote: “that’s the trouble with successful modern economies: the real things suffer and get priced out by the unreal”.

I was already familiar with the idea that money’s value is imaginary and the GDP is a somewhat weak measure of economic success. The book did emphasize the benefits of alternative currencies for different parts of the economy, which I thought was interesting but don’t feel very qualified to evaluate. For example, a local currency could be created for a particular city and would circulate more rapidly since none of it is being siphoned into the higher levels of the financial world, which would have their own forms of currency. The book also supported measured such as governments taking more control of the money supply (since they create non-inflationary money) and slowing the rates of financial speculation through a Tobin tax.

[Neal · Rating 4 out of 5]

Lots of interesting ideas and important points, some of which have become more popular and prevalent, but is just a starting point and doesn't go deep on them.

[Daniel Brandt · Rating 4 out of 5]

Faz uma análise muito interessante do papel moeda, da história do dinheiro e da representação que ele é na sociedade.
É um livro curto, de rápida e fácil leitura.

[Christopher James · Rating 5 out of 5]

This is a really useful little book. I have to admit I've not read a lot of economics, and this just shows how different things could be with a little creativity and imagination.

I won't quote figures here, but this book is all about challenging what governments, banks and markets are for, and how individuals and communities can take initiative for themselves.

It will also be great for annoying conservatives when they come out with empty platitudes about tough choices and there bing no money left. This should be compulsory reading for anyone who ever read the Daily Mail.