Money Jacog Goldstein

Review of Money by Jacob Goldstein

In the current time money is starting to lose its meaning. A massive $3Tn spending bill has been passed by the House in addition to the trillions of dollars of stimulus that have been authorized to-date. 

Where is this money coming from? 

Does this money need to be “raised” in any sense?

What are the implications of this spending; if any?

These are important questions that any educated person needs to be able to answer. However I’ve found that the main difficulty of arriving at a cogent view is cutting through the partisan noise surrounding these issues. 

 So a review of Jacob Goldstein’s book – Money: The True Story of a Made-Up Thing – presented me with a welcome primer. 


You may have heard of Jacob Goldstein from his co-hosting of NPR’s podcast – Planet Money. I’ve been a regular listener of Planet Money for a number of years and I like the short, punchy, irreverent but informative take on economic issues of the day. Most episodes last around 20 minutes resulting in just the right length for my attention span. 

So I was looking for more of the same. 

It’s a fairly short book and I finished it over the course of a few evenings. My Kindle has a series of dots to indicate length and if it helps you this book has about 1/2 of the dots of Mike Isaac’s Super Pumped: The Battle for Uber (excellent) or ⅔ of the dots of The Millionaire Next Door (meh).


This book preserves the irreverent style from the podcast and is certainly not a po-faced economic textbook. It has a breezy and likeable style, and if you like Planet Money then this will work for you. 


However I felt that it lacked some of the punchiness. Perhaps that’s simply the nature of the medium. A well-made podcast is always going to be more punchy and impactful than a book – isn’t it? But perhaps it was because this book presents chapters all centered around a single subject – Money. Whereas the podcast are usually formatted to have varied subject matter. If you drift off in one episode then you can tune-back in to another episode. It feels more disposable than a complete book that need more staying power. However I did stay with it and was pleased that I did.

Money Jacob Goldstein

The Contents

The contents are divided into five parts:

I – Inventing Money

II – the Murderer, the Boy King, and the Invention of Capitalism

III – More Money

IV – Modern Money

V – Twenty-First-Century Money

Conclusion: The Future of Money

It broadly follows the historical development of money with the majority of the book spent on modern money and beyond (parts IV and V). I would have preferred a little more sign-posting and structure. For example part III “More Money” feels a little weak. What is it, and how does that fit in?

The first three parts deal with the origins of money in coin and paper format. It touches on diverse areas such as Marco Polo, goldsmiths, gambling, European imperial traders, and the historical cost of lighting. The founding of money centered  on solving the barriers to effective barter

“by agreeing on some relatively durable, relatively scarce thing to use as a token of value”.

This is the standard story of the origins of money that I’m sure many of us are familiar with.

However I was pleased when the author highlighted early on the 

“definition of money is: it’s the thing you pay taxes with.” 

Money is indeed a useful store of value and a more easily transportable token than a gold bar (for example), but it’s the significance given to money from a central taxing authority that catapults money into the 21st Century. The author uses a neat example of a European civilization conquering a native tribe. Clearly the native people had no interest in these paper tokens described as money. To them it had no value. Until they were disuaged of this view by the necessity of paying taxes to the conquering forces! This is a fantastic analogy of the modern situation where a central government bank that is the sole issuer of a fiat currency issues that currency into the private economy. The currency is given legitimacy purely because it’s the legal tender for paying taxes. Without that constraint there would be no natural dominance of a single currency.

Modern Money

It was the latter half of the book on modern money that really kept my interest. This covered topics such as the gold standard, the origins of the central banks, Bitcoin, the global financial crisis, the Euro, the future of banks and Modern Monetary Theory. 

I was particularly impressed with the chapter on digital currency. I was expecting a pat overview that gasped with astonishment at the mysterious nature of Bitcoin’s inventor Satoshi Nakomoto, but instead he presented a thorough history that captured the bringing-together of the main elements required for Bitcoin. I had not been aware of the pre-history of developing hash functions for digital currency or the early struggles with how to make a publicly distributable ledger. Bitcoin was a quantum leap forward, and it’s often presented as such, but this book puts the development in its proper context of a very smart Satoshi compiling readily available ingredients in a very neat and simple package. 

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To me this book improved as it progressed and I was slightly frustrated that it seemed rushed at the end. My impression is that money and the creation of money is now a super-hot topic brought to the fore by the COVID stimulus and this book needed to be finished. As such there is a huge amount of fascinating material compressed into the book’s conclusion. This was the most interesting section and deserved more. 

For example I had not been aware of a serious debate that has been undergoing about whether to disaggregate banks’ business. The author points out that it’s quite possible to have one set of institutions holding people’s money and paying interest and another set of institutions lending money. Fractional reserving is not necessarily required. There are some very reputable groups discussing radical re-shaping of the banking industry and this is something I need to look into some more. 

The final discussion in the book is on the theory of the moment – Modern Monetary Theory (MMT). This has become an obsession of mine recently. And in a week or two I will be publishing a review of the hottest book on this subject – so watch out! The section on MMT was a good summary, but honestly, it deserved its own chapter. It felt tagged onto the end of the book whereas MMT provides us with the lens through which to see what money really is – simply a way of accounting for the distribution of scarce resources among the participants in an economy. 

What are your thoughts on money, the fiscal stimulus or do you have any other good summer reads – comment below!

Author Bio: I started actuary on FIRE as I did not see any actuaries taking a prominent role in the personal finance area and wanted to remedy a shortage of actuary jokes and write for those that appreciate rigor with fancy charts. In my regular day job I advise corporate US on investment and retirement strategies. I’m a qualified actuary, investment adviser and have a PhD in mathematics and reserve the right to have the occasional math post. 

2 thoughts on “Review of Money by Jacob Goldstein”

  1. I still don’t get what MMT is so I look forward to your discussion. Cruel of you to dangle those cinnamon buns in front of me though!

    1. actuary on FIRE

      Hey Caro – cinnamon buns courtesy of my son. He has really embraced lockdown.
      MMT has become my favorite subject and so expect to see some articles on this!

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