Summary of Paper Promises

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Rating

7 Overall

7 Importance

6 Innovation

9 Style

Recommendation

You don’t think twice about handing over pieces of paper and bits of metal to pay for your purchases. Nor do retailers question accepting these seemingly simple, pedestrian items in exchange for goods and services of value. You have faith that your money is good, and so does the entire global economy. But what happens when that confidence falters? Journalist Philip Coggan traces humanity’s longstanding use of paper money and coins and explains how that practice led inexorably to the massive indebtedness that now threatens the economic lives of everyone on the planet. His book is instructive from a historical perspective and provides a thorough background review, but it offers little new to readers schooled in modern macroeconomics. His prescriptions for the “new world order” appear as a brief afterthought, with only a few well-worn opinions on next steps the global economy should explore. Still, getAbstract finds this thorough review of the history of money useful for those new to the topic and for those who wish to know how the world has enslaved itself to debt.

In this summary, you will learn

  • What roles money plays in modern economies,
  • How the gold standard came and went,
  • How debt and credit grew along with paper money, and
  • What the consequences of “paper promises” mean for the global economy’s future.
 

About the Author

Philip Coggan wrote for the Financial Times for 20 years. Now he blogs as “Buttonwood” for The Economist.

 

Summary

Owing Big Time
The Western world is awash in debt. Some nations have borrowed three to four times their annual economic product. They can never repay debt of that magnitude; even servicing their debt will overload most developed nations, which already face aging populations and decreasing...

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