Paper Promises. Debt, Money, and the New World Order. by Philip Coggan. Longlisted for the Financial Times and Goldman Sachs Business Book of the. Paper Promises is a shining must-read amongst the vast literature Philip Coggan’s thesis is that one can view economic history as a. Paper Promises has ratings and 38 reviews. Abi said: On all Paper Promises () by Phillip Coggan is a masterful study of money and debt. Coggan.

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Reviewed by John Gent. This book review first appeared on the British Politics and Policy Blog. Money, Debt and the New World Order. Historically, on aggregate, borrowers have always won out in the end.

However, Coggan explains how this time, because of the global nature and abuse of modern money, the fallout prromises spare no one. Money embodies a promise that others will accept it as a claim over goods and services to be produced sometime in the future. This gives money two conflicting functions, separated by the element of time.

This struggle is played out over long cycles. Paper Promises takes us on a broad historical sweep of the many attempts to redefine what constitutes promisws in order to expand its supply, beginning with the first Chinese paper currency in and ending with a detailed look at the present crisis. Along the way, money became increasingly reliant on the value of a promise written on a piece of paper — now represented by a pixilated image on your computer screen.

Creditors and debtors are inextricably promisess in a mutual embrace based on trust and confidence.


Paper Promises: Debt, Money, and the New World Order by Philip Coggan

He explains why today we cannot possibly expect all these promises to be honoured in full. These excess promises have been due to three factors. Firstly, the expansion of the welfare-related public sector promises which are neither funded nor properly accounted foggan, but rely just as much as the debt we do measure on our ability to deliver goods and services in the future.

Secondly, private sector companies and households have also been borrowing to an unprecedented extent relative to their annual income flows. Coggan argues that when an international monetary system breaks down, the largest creditor still standing designs the rules for its successor: The book ends with the prediction that China will therefore design the next. Paper Promises is a depressing tale that needed to be told, which the author does cheerfully and with skill.

Often these are expressed as amusing or acerbic oaper with which the book is peppered. Nevertheless, Coggan demonstrates a comprehensive awareness of the major academic debates in economics and economic history — from the Triffin dilemma to the Dollar Gap, and from the Efficient Market Hypothesis to demographic change — and makes the effort to link these into a coherent narrative supporting his central thesis.

The book uses a meta-narrative structure which, although today out of favour in economic history faculties because lacking that element of refutability, when carefully constructed, can be useful in providing historical perspective to the practical policy maker. The book explains how that belief system has buttressed our confidence in paper money — but is unlikely to do so for much longer. The reviewer, John Gent, wrote: An example would be when a debtor borrows from a family member, and subsequent inflation means that the money that the creditor eventually gets paid back by the debtor is worth less than when the creditor lent it.


I urge readers to visit http: The rate of creation of new money would be limited by law to just match the measured rate of economic growth, so that the rate of inflation would fluctuate around zero and be kept at a long-term average of zero, thus permanently preserving its purchasing power, i.

Book Review: Paper Promises: Money, Debt and the New World Order by Philip Coggan | EUROPP

Click here to cancel reply. Evidence-based analysis and commentary on European politics. Previous post Next post. PJM April 5, at 2: Our top five articles of December 31st, Five charts on European politics in December 28th, Well ptomises very perceptive and clearly put.

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