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from the publisher:
Nowadays, the idea that the way a country borrows its money is connected to what kind of government it has comes as a surprise to most people. But in the eighteenth century it was commonly accepted that public debt and political liberty were intimately related. In A Free Nation Deep in Debt, James Macdonald explores the connection between public debt and democracy in the broadest possible terms. He starts with some fundamental questions: Why do governments borrow? How do we explain the existence of democratic institutions in the ancient world? Why did bond markets come into existence, and why did this occur in Europe and not elsewhere?
Macdonald finds the answers to these questions in a sweeping history that begins in biblical times, focuses on the key period of the eighteenth century, and continues up to the present. He ranges the world, from Mesopotamia to China to France to the United States, and finds evidence for the marriage of democracy and public credit from its earliest glimmerings to its swan song in the bond drives of World War II. Today the two are, it seems, divorced -- but understanding their hundreds of years of cohabitation is crucial to appreciating the democracy that we now take for granted.
"This is a profound and original work by an experienced financial practitioner who understands that public debt is not just economically but politically crucial. Macdonald has something exciting to teach all serious students of history -- that the evolution of democratic institutions is not just about taxation and representation but also about investment." --Niall Ferguson, author of The Cash Nexus: Money and Power in the Modern World, 1700-2000James Macdonald was an investment banker for many years. This is his first book. He lives in Oxford, England."In this fresh and informative look at dollars and democracy, Macdonald reminds us why James Carville observed that he hoped, after death, to be reborn as the bond market. Freedom and finance are more closely entwined than we realize. A gloriously rich history." --Richard Parker, John F. Kennedy School of Government, Harvard University
"Macdonald's wide-ranging exploration of representative political institutions and the ability of states to borrow, survive, and prosper is history at its best. Political liberty, sound public financial policies, and well-functioning securities markets nurture one another, but across human history all three have been hardly gained, easily lost, and therefore rare. It is a deep insight, one that all who cherish freedom should understand and heed." --Richard Sylla, Stern School of Business, New York University
"James Macdonald reveals democracy's deepest strength: Citizens are willing to lend to governments of their own creation. His closely studied historical episodes show that this practice, when applied to war financing, clinched the advantage over authoritarianism." --Eric Jones, author of The European Miracle: Environments, Economics, and Geopolitics in the History of Europe and Asia
"This startling and original book traces the evolution of public debt from the Bronze Age to our own, and in clear, lucid prose shows that successful state finances have been both a cause and an effect of the emergence of democratic forms." --Jonathan Steinberg, Walter H. Annenberg Professor of Modern European History, University of Pennsylvania
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