Published by EH.Net (July 2022).

Stefano Battilossi, Youssef Cassis, and Kazuhiko Yago, eds. *Handbook of
the History of Money and Currency*. Singapore: Springer, 2020. xv + 1,109
pp. $799.99 (cloth), ISBN 978-9811305955.

Reviewed for EH.Net by Duncan Connors, DBA Programme, Otago Business
School, University of Otago.



When teaching the history of economic thought, I often ask this question in
the first lecture: \’What is money?\’ Invariably the answer is a
simplistic, thought-terminating cliché, \’It\’s a means of exchange, of
course!\’ and the students smile with an all-knowing expression. Needless
to state, I do not play nice and during the following hour demonstrate that
money, and by association finance and economics, is far more complex,
diverse, and multifaceted than an average 18-year-old can possibly
comprehend. Such is the condition of modern secondary education; many
undergraduates (even postgraduates) lack an appreciation of the history and
evolution of finance as an activity. There is, however, an antidote in the
form of the *Handbook of the History of Money and Currency*, a collection
of the latest work in the field that has an introductory research role as
well as a pedagogical one.

The *Handbook* can be commended for the high level of synthesis between the
many components. Indeed, when forming an academic \’supergroup,\’ the goal
has to be more akin to the impeccable harmonies of Crosby, Stills, Nash &
Young (CSNY) and not so much the extended solos of Emerson, Lake & Palmer
(ELP), whose members travelled to concerts in separate limos and played
very long individual solos because, frankly, they did not enjoy one
another\’s company. This can be seen in many academic collections, which
sometimes strike a discordant note as chapters follow their own paths at
times divergent from the overall aim of the text. The fascinating synergies
found within the *Handbook*, however, can be witnessed from the very first
section on the origins of money, where Michael Hudson, Colin P. Elliot, and
Bill Maurer complement one another’s work on the early origins of money, a
trend that continues throughout the text, helped in no small part by Stefan
Battilossi and Kazuhiko Yago’s comprehensive introduction that by outlines
the complementary aspects of each contribution to the *Handbook, *hence the
text is more CSNY than ELP. This approach allows the student or academic
using this book as an introduction to monetary history not only to
appreciate the chronological evolution of money but also the economic, or
perhaps philosophic aspects of the subject.

An example of this comes from choosing to open the text with Michael
Hudson’s chapter on the origins of money that started with a joyous
debunking of the ‘myth of barter’ (something which again every 18-year-old
economics and finance student should be made aware of) that proceeded to
demonstrate that debt likely existed before money by using a thought
experiment akin to those employed by the late (and much missed) David
Graeber at the London School of Economics: how can barter work if grain has
not been harvested or livestock cannot travel in 30-degree heat during a
Levantine mid-summer? The pragmatic and practical answer is that it cannot
and therefore the first lesson about the nature of money itself has been
imparted. This is important from both a pedagogical and research
perspective as student and academic alike still cling to the notions of
barter being utilised by early humans that were put forth by Aristotle and
Adam Smith, despite the lack of evidence for such a view. This is a good
way to start the text as it outlines the motivation of those trying to
create stable and purposeful money over many millennia: to produce an item
recognised for its value and remains so over time.

However, as W. Stanley Jevons and Carl Menger pointed out, value is
subjective and can be based as much on utility as status, and this fluidity
is discussed throughout the text, not just in the final sections dedicated
to exchange rates, attempts at integration, central banking, monetary
banking and aggregate price shocks (this final section appeared incongruous
on first reading but in actualité acts as a fascinating segue into the
current ‘crypto’ age) but throughout the text. One notable example of this
can be found within the sections dedicated to the development of money in
Asia, notably because until relatively recently developments in Asia were
barely touched upon by western focused historians of financial and monetary
history. Yohei Kakinuma’s chapter on the monetary system in ancient China
is a particularly fascinating and welcome addition to the literature. The
chapter covers early paper money, the ‘rise and fall’ hypothesis, and the
complementary yet completely different currencies – silk, gold, and coin,
the use of which depended on circumstances, status and geography. It is
reasonable to argue that our understanding of monetary systems is
constrained within a western theoretical bias and, consequently, just as
recent research has challenged notions of barter used in early societies,
the study of ancient Chinese currencies and other monetary developments
over many millennia could add to our understanding of the evolution of
early money.

This chapter leads onto work by Niv Horesh and Hisashi Takagi on the later
period of monetary consolidation within China and Japan that led to
currencies, once both nations had opened to trade with the western powers,
based upon the Mexican (formerly Spanish) Silver Dollar. Indeed, on this
point it could also be argued that the post-Enlightenment era of burgeoning
trade and empire led to increased effort to standardise a common metric for
currencies, what in geographic or navigational terms would be referred to
as a datum: a base mark or reference point from which all measurements are
taken. That the Silver Dollar in the late 18th century was a truly
international currency and the basis of the US Dollar as well as the
Chinese Yuan and Japanese yen (Indeed it was the basis for currencies
across Asia) suggests a desire, at both government and commercial levels,
for a monetary consistency that transcends time and borders, an important
feature of a pre-telegraph and radio era global economy where transactions
were drawn out along temporal and geographic lines. These trends are
discussed in detail within the sections on exchange rate regimes and
monetary integration, with notably fascinating chapters by Peter Kugler and
Tobias Straumann on the Bretton Woods system, Catherine Schenk on the
Sterling Area, and Anders Ögren on currency unions. The latter chapter is
worthy of note for its analytical use of Robert Mundell’s ‘Optimal Currency
Area’ to draw historical lessons from the Latin Monetary Union (LMU) of
1865 and the Scandinavian Currency Union (SCU) of 1873 that could be
applied to the European Monetary Union and the euro. It should be noted,
however, that despite the LMU starting out as a bimetallist system which
included silver and gold (until 1878 after Cardinal Giacomo Antonelli,
treasurer of the Papal States decided to debase its silver coinage to
increase the supply of gold) that ultimately both unions were a response to
a burgeoning gold standard in global trade in the mid to late 1800s. This
could have been discussed in more detail and linked into the chapter on the
Gold Standard by Lawrence H. Officer.

The final section of the text, on aggregate price shocks, was very welcome
and, with Richard C. K. Burdekin’s contribution on deflation, very timely.
However, monetary history can be described as a series of epochs between
repeated crisis and this section could have been more extensive, including
work on collapse of Bretton Woods, hyperinflation in Latin America and the
post-Soviet sphere or even the global financial crisis that invariably
follow the declaration of war (Richard Roberts, the pre-eminent history on
the financial crisis of 1914 is sadly no longer with us and I was left
wondering what contribution he might have made to this section). Indeed,
discussion of such events could have segued well into some of the economic
theories and models that were absent in this text. This is a very important
point (particularly as we re-enter an age of inflation after COVID-19 and
the events in the Ukraine) as reiteration of the circular nature of
financial and monetary history could have been more informative to academic
and students alike, particularly additional contributions on aggregate
price shocks and rapid changes in the value of money over very short time
frames.

This book is a welcome addition to the field. The juxtaposition of
synthesis with new and orginal thought on the subject is welcome as many
similar texts in related disciplines have in the past have been victims
either of groupthink or provided a series of fractious contributions that
are hard for the reader to reconcile. The editors of the *Handbook of the
History of Money and Currency, *Stefano Battilossi, Youssef Cassis, and
Kazuhiko Yago, have created an exceptional resource for both the research
community, particularly doctoral students in the field or those working in
related disciplines, as well as for those of us who teach the history of
economic thought and the development of finance. If there is one criticism
which could be levelled at the text, it is that the discussion of economic
theories related to the evolution and perceptions of money were touched
upon only fleetingly and a wider acknowledgement of meso-level social
trends would have been equally welcome. Nevertheless, this is an important
and substantial contribution and is a recommended read for all those
working within the field of monetary history.



Duncan Connors is Senior Lecturer at the DBA Programme at Otago Business
School, University of Otago. His publications include *A History of Money*,
Fourth Edition, with Glyn Davies (University of Wales Press, 2016) and
\”The Atomic Business: Structures and Strategies,\” with Maria del Mar
Rubio-Varas and Joseba De la Torre (*Business History*, 2020).

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