Did finance make civilisation possible? It gets a bad rap but here’s how it’s behind everything from the start of literacy to security in old age
Finance is getting a lot of stick at the moment, with banker bashing, the global damage caused by the financial crisis – and current scepticism about the expertise of economists and central bankers.
But here Will Goetzmann, professor at the Yale School of Management, argues that civilisation as we know it would not have been possible without finance.
He explains that the need to write down who owed what in trade arrangement precipitated literacy and numeracy millennia ago in Mesopotamia.
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Influence: The presence of finance has been felt from Mesopotamia to the present day
It has acted throughout history as a ‘time machine’ allowing people to move money forwards and backwards through time via borrowing and saving.
The first ATM system invented by the Knights Templar during the crusades helped people to have access to money when they needed it without having to carry it through precarious environments on their journeys.
On this latest episode of the Big Money Questions, Will also tells presenter Rachel Rickard Straus what we can learn today from the mortgage crisis in Rome in 33 AD, and one of the biggest bubbles ever seen, the South Sea Bubble in the 1720s.
He has recently written a book looking at the role of finance throughout human history: Money Changes Everything – How Finance Made Civilisation Possible.