Money makes the world go round. In order to trade, dealers must use a recognised and acceptable form of money and this then enables goods and services to be exchanged and incomes to be paid.
The need to use money and yet safeguard its use led to the first banks, and the subsequent creative manipulation of other people’s money has since given rise to the modern, massive, international financial industry. In general, the growth of banking and the resulting globalisation of finance has accompanied the increasing wealth of nations, but it has been a roller-coaster ride at times. On occasions, too much money has been loaned out – only to be followed by recriminations all round when creditors, in the attempt to get their money back, close down banks and sell off the businesses they supported. Money is essential to conduct trade; it requires the growth of financial specialists, and there arises, therefore, the occasional irresponsible use and abuse of financial power. It is to these issues that the study of economics must now turn.