The first section explores early civilisations. Goetzmann's approach to these ancient economies is a refreshing change from Moses I. Finley's mistaken but influential refusal to believe that the ancients had much of a clue about economic matters. Goetzmann shows how the forces of urbanisation, agricultural risk management, warfare, and trade prompted various forms of financial transaction in Mesopotamia; infers from the complexity of financial arrangements described in lawsuits heard by lay juries of 500 citizens that classical Athenians had a very sophisticated understanding of financial matters; and finds the first example of systemic risk in banking in Rome in 33 CE, along with the first publicly held companies.

The second section deals with early China, where financial tools and institutions developed differently from the rest of the world, reflecting a different conception of the relation between individual and the state, manifested in a vast bureaucracy to manage tax collection and redistribution, and in regular state expropriation of successful enterprises. Goetzmann provocatively suggests this might explain why the Industrial Revolution did not happen in China.

The third and longest section returns to Europe and covers the period from the Dark Ages to around the start of the twentieth century. The wide diversity of political units made for equally diverse financial structures, a fertile laboratory of real-life experimentation that accelerated innovation and development. Corporate structures, trading companies, and bubbles all receive detailed and insightful attention.

The final section concerns the twentieth century and the globalised economy. Goetzmann's analysis of the inherent conflicts between corporate power structures and nation states is especially interesting, as is his explanation of why index funds should and do outperform most active managers. Despite new analytical tools such as the random walk hypothesis and the Capital Asset Pricing Model, our tendency to repeat the same mistakes is apparent. The 'skyscraper bonds' that financed Manhattan's skyline in the 1920s morphed into the mortgage disaster of 2007. The conflicts of interest and deliberate deception of investors that occurred before the Great Depression and before the global financial crisis are remarkably similar. Should we be surprised that both involved the same 'giant vampire squid wrapped around the face of humanity'?

The book has something for everyone. Serious students will enjoy detailed expositions of the mathematics of probability developed by such brilliant minds as Leibniz, Bernouili, and Condorcet. Marxist theory, Keynesianism, and the peculiar religion of Ayn Rand are all thoughtfully explored, as are alternative models of economic entrepreneurship in China and Russia. Trivia lovers will find many 'firsts', including the first evidence of compound interest (Babylon, 2400 BCE), the first stockholder corporations (imperial Rome), the first paper money (Sichuan, eleventh century; called 'alchemy' by Marco Polo!), the first London bank (founded by the Knights Templar in the thirteenth century), the first market in securitised government debt (the Rialto in Renaissance Venice), and the first business textbook (Fibonacci, thirteenth century).

William N. Goetzmann Given the complexity of the subject, the clear summaries at the beginning and end of each section and chapter are invaluable. Illustrations are plentiful and apposite, and include several photographs drawn from the author's private collection. There may be a reason why around half of the several dozen pictures are labelled 'Figure' and numbered, but it was not clear to this reader. It is disappointing that Princeton University Press has succumbed to the rampant epidemic among publishers of reducing their investment in copy-editing, and an otherwise handsome volume is unnecessarily marred by a number of glaring typographical errors.

A more troubling flaw is the book's title. One can understand from a marketing point of view a desire to make a dull but worthy subject sound exciting, but the implication that finance is an independent agent in human affairs, rather than the collective name for a set of tools man has developed for particular Darwinian purposes, is misleading to the reader and sometimes, it seems, to the author himself. Major advances in financial technology tend to be accompanied by advances in other areas and, while economic transactions might have prompted various forms of symbolic communication or legislative frameworks, Goetzmann sometimes seems to forget that these developments were the pragmatic response of human beings to specific problems and opportunities, rather than the effects of the autonomous action of an abstract noun. Saying civilisation was made possible by other technologies such as writing or transport would be equally true and equally uninformative.

This view of finance as an autonomous force might explain why Goetzmann ducks some of the more fundamental questions that can be asked of the finance industry today. Though he is not a one-eyed apologist for finance – he calls it 'a protagonist of uncertain moral value' – he does not begin to challenge it in the way, for example, Mervyn King does in his new book The End of Alchemy (2016). Nowhere does Goetzmann question whether human well-being is furthered by the industry consuming an estimated twenty per cent of global GDP, or whether the fundamental infrastructure tasks of deposit-taking and lending could and should be done at much lower cost and risk by public servants on modest wages. The disastrous folly of repealing the Glass–Steagall Act does not rate a mention.

Nor does Goetzmann seem aware of the social problems the industry is renowned for, such as endemic corruption, widespread dishonesty, male chauvinism, and generally antisocial behaviour. It is not only civilisation that finance made possible.