The Price of Time: The Real Story of Interest

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.