My TLS review of Frederick Taylor and Felix Martin

by on March 24, 2014 at 9:17 am in Books, Economics, History | Permalink

The Frederick Taylor book is The Downfall of Money: Germany’s hyperinflation and the destruction of the middle class, and Martin’s is Money: The Unauthorised Biography.

On Taylor I wrote:

It’s about time we heard the classic Weimar hyperinflation story from the side of governance, just as it is indeed illuminating to reread Hamlet while omitting the parts about the Prince.

Taylor has oddly little on monetary policy in his book, even though he clearly understands the core issues.  On Martin’s book I wrote:

Like Taylor’s work, this is an excellent book to read, full of interesting history and insight, and very clear and well written.  It is an overview of the history of money, and thought about money, yet through a more philosophical lens than is usually the case.  It is not clear, however, if the central thesis of the book is either correct or relevant.

Martin tends to trace financial crises to the defects in underlying philosophies of money, such as whether money is viewed as a thing or as a sign.  I also wrote this about the book:

Yet, to paraphrase Freud, sometimes a financial crisis is just a financial crisis.

If you click on the top link here and register for a trial period, you can read the review.

1 prior_approval March 24, 2014 at 10:26 am

I’m sure that the reparations will be prominently featured, right? ‘German currency was relatively stable at about 60 Marks per US Dollar during the first half of 1921.[4] Because the Western theatre was mostly in France and Belgium, Germany had come out of the war with most of its industrial power intact, a healthy economy, and in a better position to become the dominant force on the European continent.[5] However the “London ultimatum” in May 1921 demanded reparations in gold or foreign currency to be paid in annual installments of 2,000,000,000 (2 billion) goldmarks plus 26 percent of the value of Germany’s exports.[6]

The first payment was made when due in June 1921.[7] That was the beginning of an increasingly rapid devaluation of the Mark which fell to less than one third of a cent by November 1921 (approx. 330 Marks per US Dollar).’

It took more than one government and its policies to create the economic disaster which helped lay the foundation for the second world war.

2 T. Shaw March 24, 2014 at 12:45 pm

The Versailles Treaty laid on Germany war reparations of $32 billion payable in gold* or foreign exchange. At 60 marks/USD that would be M1.92 trillion.

The Weimar economic/monetary disaster especially hit German culture. Although, the WWI Hun was a savage, no-holds-barred killer. Kipling’s History of the Irish Guards (Battalion One) in the Great War relates how early-on Guards troops learned (the hard way) about the German “white flag” ruse.

The Entente alllies owed the US $10.4 billion. Only Finland paid. About 90% is still past-due.

* – Gold is money. The rest is confetti whose value relies on lies, er, promises.

3 Michael March 25, 2014 at 8:17 am

Gold isn’t money to people who don’t accept it as money.

4 Asher March 24, 2014 at 11:19 am

There is no evidence that Freud ever said, or wrote, “Sometimes a cigar is just a cigar”.

5 Thor March 24, 2014 at 11:48 am

“Sometimes a saying by a guy who said a saying is just a saying that said guy might not have said”?

6 Thor March 24, 2014 at 11:54 am

And, to paraphrase Voltaire — who did say “If God didn’t exist, we’d have to invent him” — if Freud didn’t say that, we’d have to invent that he did. Just saying…

7 Urso March 24, 2014 at 12:17 pm

I’d like to read a blogpost on Hamlet minus Hamlet; is one of the prime cultural artifacts of the 21st century. (so far???)

8 Nick March 24, 2014 at 12:39 pm
9 dearieme March 24, 2014 at 1:55 pm

“reread Hamlet while omitting the parts about the Prince”: wouldn’t Ophelia come across as rather odd?

10 dearieme March 24, 2014 at 1:58 pm

Do people still really argue that the reparations were unpayable? I’m sure I’ve seen somewhere that if you compare them with German behaviour after the War of 1870, or Russian after WWII, they weren’t particularly onerous. Be that as it may, it certainly turned out that they hadn’t been onerous enough.

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