Paper Promises Book Summary - Paper Promises Book explained in key points

Paper Promises summary

Philip Coggan

Money, Debt and the New World Order

4.1 (14 ratings)
13 mins

Brief summary

Paper Promises by Philip Coggan explores the history of money and how it has shaped our world. Coggan argues that our reliance on paper money has caused economic instability and proposes potential solutions.

Table of Contents

    Paper Promises
    Summary of 7 key ideas

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    Bartering a loaf for a lamb was how trade was done in early times. Today, money moves markets.

    If money is just ink on paper, why is it that we worship it so? The answer rests in how we use it.

    Money’s primary function is as a medium of exchange. Before we used money, deals were settled through bartering. If you were a baker, for example, and you wanted a pair of pants or a leg of lamb, you could find a shepherd and trade. If you gave him 100 loaves of bread, he’d give you a lamb.

    But what if the shepherd had no need for bread? You’d then have to find something he did want, perhaps a new knife. You’d then have to find a blacksmith (who needs bread) to make the knife, which you could trade for the lamb.

    Trying to find the right thing to trade could lead to some intricate, time-consuming bartering. Money cuts through this confusion: if you want something, you simply exchange it for money, which the seller can then use to buy something else. The transaction is simple, and direct.

    Money also functions as a unit of account, or a means of measuring a product’s value.

    To trade an item, we need to understand its worth. Bartering makes this difficult. Could you say accurately how many lambs one knife is worth? Or does it depend on the needs and resources of the shepherd and the blacksmith?

    Money makes valuation easy, as beforehand its value is agreed upon.

    Finally, money can be used to store value, for example, by maintaining the value of a specific product.

    Most of the world’s countries keep the value of their money more or less stable to foster investment and prevent inflation, in which prices rise but the value of money decreases.

    Understanding money’s many functions is essential to understanding the way it can influence the economy and society.

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    What is Paper Promises about?

    Paper Promises offers a sobering take on the nature of money, the recent global financial crisis and what our attitudes about debt will mean for future generations.

    Paper Promises Review

    Paper Promises (2012) by Philip Coggan uncovers the intricate world of money and finance, offering readers valuable insights into the global economy. Here's why this book is worth reading:

    • Presenting a thorough examination of the history of money, it helps readers understand the complexities of the financial system.
    • With clear explanations and compelling examples, the book demystifies complex concepts, making it accessible to readers with no background in finance.
    • The book's critical analysis of the flaws and risks in modern monetary systems ensures it keeps readers engaged, provoking thought and discussion.

    Best quote from Paper Promises

    Modern money is debt, and debt is money.

    —Philip Coggan
    example alt text

    Who should read Paper Promises?

    • Anyone who is deeply in debt
    • Students of history and economics
    • Older generations who struggle to understand why young people have so much debt

    About the Author

    Philip Coggan is a columnist at The Economist and has written a number of books, including The Money Machine and The Economist Guide to Hedge Funds. For 20 years he has also worked at The Financial Times, most recently as investment editor.

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    Paper Promises FAQs 

    What is the main message of Paper Promises?

    The main message of Paper Promises is a critical examination of the global financial system and the risks of relying on fiat currencies.

    How long does it take to read Paper Promises?

    The reading time for Paper Promises varies depending on the reader's speed. However, the Blinkist summary can be read in just 15 minutes.

    Is Paper Promises a good book? Is it worth reading?

    Paper Promises presents an insightful exploration of the financial system and its vulnerabilities, making it a worthwhile read for anyone interested in economics.

    Who is the author of Paper Promises?

    The author of Paper Promises is Philip Coggan.