The Price of Time

Capitalism and interest are inseparable, yet over the centuries whenever interest rates have collapsed and money was too easy, financial markets have become unstable. In the first two decades of the twenty-first century, interest rates have sunk lower than at any time in the five millennia since they were first recorded. In an unprecedented move, negative interest rates were introduced in Europe and Japan, causing trillions of dollars'' worth of bonds to trade at negative yields. Monetary policymakers appear blithe to the unintended consequences of their actions. Yet given the essential function of interest in determining how capital is allocated and priced, and its role in regulating financial risk, it is not clear that capitalism can thrive or even survive under these conditions.With clarity and precision, Edward Chancellor traces the history of interest from its origins in ancient Mesopotamia, through debates about usury in Restoration Britain and John Law''s ill-fated Mississippi scheme to the global credit booms of the twentieth century. The Price of Time reveals how extremely low interest rates not only create asset price inflation but are also largely responsible for the weak economic growth, rising inequality, elevated debt levels, and pensions crises that have afflicted Western economies in recent years. At the same time, easy money in China has inflated an epic real estate bubble, accompanied by the greatest credit and investment boom in history. The global financial system is edging closer to yet another devastating crisis.>

Auteur
Edward Chancellor is the author of Devil Take the Hindmost: A History of Financial Speculation which has been translated into many languages and was a New York Times Book of the Year. After reading history at Cambridge and Oxford, he worked for Lazard Brothers and until 2014 he was a senior member of the asset allocation team at GMO. He is currently a columnist for Reuters Breakingviews and has contributed to the Wall Street Journal, the Financial Times, MoneyWeek and the New York Review of Books. In 2008, he received the George Polk Award for financial reporting for his article "Ponzi Nation" in Institutional Investor.

Texte du rabat

The first book of the next crisis.

Winner of the 2023 Hayek Book Prize
Longlisted for the 2022 Financial Times Business Book of the Year Award

All economic and financial activities take place across time. Interest coordinates these activities. The story of capitalism is thus the story of interest: the price that individuals, companies and nations pay to borrow money.

In The Price of Time, Edward Chancellor traces the history of interest from its origins in ancient Mesopotamia, through debates about usury in Restoration Britain and John Law ' s ill-fated Mississippi scheme, to the global credit booms of the twenty-first century. We generally assume that high interest rates are harmful, but Chancellor argues that, whenever money is too easy, financial markets become unstable. He takes the story to the present day, when interest rates have sunk lower than at any time in the five millennia since they were first recorded - including the extraordinary appearance of negative rates in Europe and Japan - and highlights how this has contributed to profound economic insecurity and financial fragility.

Chancellor reveals how extremely low interest rates not only create asset price inflation but are also largely responsible for weak economic growth, rising inequality, zombie companies, elevated debt levels and the pensions crises that have afflicted the West in recent years - conditions under which economies cannot possibly thrive. At the same time, easy money in China has inflated an epic real estate bubble, accompanied by the greatest credit and investment boom in history. As the global financial system edges closer to yet another crisis, Chancellor shows that only by understanding interest can we hope to face the challenges ahead.