Comment by jonahbenton
6 years ago
Huge, huge topic. You will have to pick a path through the enormous jungle.
The starting point I would recommend is bottom up, through accounting and financial statements. Core knowledge, of both practical and intellectual value. Tons of books here, I particularly like
Thomas Ittelson - Financial Statements
Accessible, straightforward, friendly.
After that, any of the collections of
Warren Buffett's Letters to Shareholders
are both entertaining and intellectually valuable, and provide great insight. Read forward, eg, from his first letters in the 1960s, to now.
One of the realizations in the journey is that there are, and have been, a lot of different kinds of money- credit money and exchange money and asset money and so forth. A relatively abstract/intellectual but immensely useful survey is
The Nature of Money - Geoffrey Ingham
The concept of an asset is critical to the functioning of the financial system. New kinds of assets are created all the time. One of the best written books I have read recently goes into venture capital and debt asset creation:
The Code Of Capital - Katharina Pistor
The role of different kinds of money in history, especially US history, is absolutely fascinating. I am in the middle of
American Bonds - Sarah Quinn
and can recommend.
I do not especially recommend the Dalio books or Graeber's Debt or Ferguson's books. They are fine but I did not find them helping me build understanding. Not quite junk food, but definitely not protein.
I unfortunately have not found any of the books I have seen about the Federal Reserve to be worthy of recommending. My wife works there and so I have perhaps a unique perspective. But nothing conveys the challenge and the mechanics of what they do. Still looking. The papers the various Fed banks publish, as well as the papers published by the Bank of England, are uniformly outstanding.
Finally, some of the bitcoin people have written about money. Tho I am a believer in bitcoin I absolutely recommend against most of them, especially Saifedean Ammous's book. Do not read.
Good luck!
If Graeber's Debt didn't help you build understanding, then I'd respectfully suggest that you weren't trying to build a deep enough understanding.
Debt (the book) is not about our contemporary system (much) - it's an incredible work about the most basic elements of "financial systems" and how debt has shaped our cultures, economies and political systems over thousands of years.
Put differently, perhaps, it's a book about things the lie beneath what is covered in all the books you've mentioned.
Agree completely that it is an important work and enlightening- in terms of perspective. The socio/anthropological history of Debt is a very useful lens for the modern world.
That said, in terms of understanding- with all respect, I find it insufficient (MHO). Perspective, as Alan Kay says, is worth a lot of IQ points, but on its own is insufficient. The modern financial world is full of machines (both software and people processes). Much of what happens is a result of mechanical inertia. The universe of sensible changes from a policy perspective is limited by the ergonomics and sympathies of the existing machines.
It has been a long time since I last read Debt but I remember feeling frustrated by an absence of coverage of the machines. My perception of his advocacy in recent years has been that he has been less effective than he might have been had he stronger command of the machines, and not just the policy.
One of my recs- Sarah Quinn- while like Graeber is also deep in the world of the sociology of money, is stronger technically. Her PhD thesis is an extremely helpful dive into the mortgage securitization world- the largest debt market in the world other than Treasuries- and my rec (American Bonds) so far is a popularization of that work.
I completely forgot, another excellent book on important machines that shape the modern financial world is
Payment Systems in the US - Carol Coye Benson
Debt makes some particularly interesting observations about currency before fractional reserve banking, which I imagine most other books treat as a starting point. The hypothesized relationships between minting precious metals, war, slavery, and mining were thought-provoking.