The Price of Time

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A comprehensive and profoundly relevant history of interest from one of the world's leading financial writers, The Price of Time explains our current global financial position and how we got here The tradition of charging interest on loans is one of man's oldest practices, going back at least to the Mesopotamian era in the third millennium B.C. From ancient times, usury or charging for the use of money, has attracted opprobrium—from philosophers, including Plato and Aristotle, and from the religious authorities, whether Jewish, Muslim, or Christian. Yet as capitalism became established from the late Middle Ages onwards, denunciations of interest were tempered. It was gradually accepted that creditors had a right to charge for lending out their property and that credit was essential for trade. By the seventeenth century, the debate about interest shifted to what might be considered a fair price. Over the first two decades of the twenty-first century, interest rates have sunk lower than ever before. Central bankers and policymakers appear blithe to the unintended consequences of their actions, but easy money after the global financial crisis in 2007/2008 has produced several ill effects, including the appearance of multiple asset price bubbles, a reduction in productivity growth, discouraging savings and exacerbating inequality, and forcing yield-starved investors to take on excessive risk. The financial world now finds itself caught between a rock and a hard place, and Edward Chancellor is here to tell us why. In this enriching volume, Chancellor explores the history of interest and its essential function in determining how capital is allocated and priced.