The Price of Time by Edward Chancellor
There was a loan at first, and that loan had an interest. People have been borrowing and lending money with interest for at least five millennia. Usury wasn’t always a common practice; in the ancient world, it was typically seen as exploitative and a possible route to debt bondage and slavery. Yet, as capitalism developed starting in the late Middle Ages, criticisms of interest were moderated because it was a crucial incentive for lenders to part with their money. However, interest serves a variety of other crucial roles, including promoting saving, enabling individuals to assign value to priceless possessions like homes and various financial securities, and allowing us to assess the risk involved.
The Price of Time by Edward Chancellor
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Every economic and financial activity spans time. Although interest is frequently referred to as the “price of money,” it is actually better referred to as the “price of time” because time is valuable, precious, and expensive. Interest is the time equivalent of money.
Interest rates have fallen to record lows in the first two decades of the twenty-first century. After the global financial crisis of 2007–2008, easy money had a number of negative effects, including the emergence of multiple asset price bubbles, a slowdown in productivity growth, a reduction in savings and an escalation of inequality, and the incitement of excessive risk-taking on the part of yield-starved investors. Edward Chancellor is here to explain why the financial industry is currently stuck between a rock and a hard place. Chancellor examines the history of interest and its crucial role in shaping how money is allocated and priced in this insightful study.
The book by Edward Chancellor is a masterful examination of the history of easy credit and the issues brought on by low-interest rates. Chancellor looks to have read everything and has conducted an astounding amount of research. The footnotes and bibliography make the book’s price worthwhile. He did a great job on his research. He completed his homework (not everyone does). A brief book report can be found in the first section of the book on the History of Interest. He seems to be reporting on work that he is not quite familiar with.
His handling of the ancient Sumerian and Akkadian economic literature, in which he significantly relies on the interpretation of others and frequently reduces their excellent work to an illustration of his thesis that interest rates should not be “controlled,” is the clearest example of this. For his credit history, I had higher hopes. To be honest, though, this isn’t exactly a history of the concept of time worth money. It is an attack on contemporary monetary policy. His analysis of the South Seas Financial Crisis of 1720 and the Mississippi Bubble created by John Law is engaging and illuminating. It is particularly nice how he critiques Locke and Hume on credit.
