Foreword

Money is not humanity's best subject, a proposition whose truth I can easily demonstrate. Imagine if, upon Cleopatra's death in 30 BC, some public-spirited heir to the Egyptian ruler had made a gift to posterity of a $100 deposit in the Bank of Perpetuity. “Just reinvest the interest at 2% forever and ever,” the donor would have told the teller, “and don't allow a single withdrawal.” So it was done.

This benefaction, seemingly a trifle on the day of deposit, would by now have grown to $41,034,747,782,825,800,000.00. Expressed more manageably, it would represent 58.5 doublings of the original $100, or $5,351,505,546.32 for each of the citizens of the world, of whom, at last count, there were 7,667,888,490. Imagine it: everyone on the face of the earth a billionaire five times over.

But, of course, there was not then, and is not now, any Bank of Perpetuity. Leveraged financial institutions are usually as mortal the people who manage them. Besides, as Vikram Mansharamani illustrates throughout this grand tour of financial thought and financial history, human progress is not continuous but cyclical. Humanity builds up only to tear down. Booms give way to busts, and vice versa. Compound interest is, indeed, a marvel, but we earthlings have to eat and pay the landlord. So it is that wealth, rather than piling higher and higher from generation to generation, is most often consumed by the generation that produces it (or its immediate, temporarily grateful, heirs).

Some may object ...

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