Money is the root of all evils as the famous saying goes, but is money really evil or we are denying that it has truly contributed to the growth of economics and finance of the world. Money becomes evil when excess greed captures human imagination but it is a boon if used judiciously and wisely.
History is full of stories about money wherein lust for it can lead to biggest financial disasters but good use of it can bring in economic development. Sumerians used clay tablets and other devices as a form of facilitating trade and sometimes as forward contracts thousands of years before. This facilitated trade, commerce and business. This is a good example of how money in form of tablets can help in commercial development. As the story goes this was the greed of money only that brought about the decline of roman civilization wherein plunderers led crusades for gold and other valuable items vanishing the roman empire from its glory.
Trade in the medieval period required credit for leading long voyages to far corners of the world, the banks though in the first stages of the development landed credit to merchants in return of interest from them. In Merchant of Venice, Shakespeare carves out a beautiful character of a lender the villain demanding merchant's friend as a ransom to give loan. If merchant journey was successful then all is well otherwise not all is well. So in a way this banking system which flourished at the shores of Italy facilitated world trade bring the world together and leading to major changes in world's political and economic turmoil. Money here was important no doubt about that.
Wars waged like the Napoleonic wars or the inter-state wars in Europe or the civil war in North America all required money. But from where the money came from, it came from bonds issue by the govt. or other third parties. So money financed wars and led to political turmoil. It was lust for money and power that led Napoleon to wage war in whole of Europe and was one of the factors in waging wars.
European countries like Britain, France, Portugal, and Dutch had traders and govt. that had lust for money which led them to go for sea voyages far beyond their territories. The large profits which the traders can make by importing cotton, spices and other valuable commodities gave them the incentive to set up their private companies in the new colonies. These Companies to enhance their political strength which would help them to carry out trade at their will was remarkable in the sense that this led to colonization and imperialism. So Money was the reason or true force behind this imperialism of the western countries in Africa and Asia. But at the same time this was colonization only which facilitated the spread of science, western education and other liberal ideas to the rest of the world. So money was a bane and a boon at the same time for the world.
The Great Depression of 1929 cannot be forgotten the euphoria surrounding the stock market led the investors to buy excessively in the market and led to the boom. But one weak economic development led to the downfall of the entire market which lasted for several years but it was a harbinger of new economics in the sense that a new economic policy emerged. Keynes with his theory of employment and wages put forward his views for govt.to take action and give fiscal stimulus. The greed of Money at the same time led to depression ringing the alarm for the economists and policy makers to take the necessary action and at the same time formulate sound economic policies which would prove as a guiding policy for decades to come for taming booms and recessions . So Money has it all.
A money lot of money is poison as a famous going goes excess of anything is a poison but when it is in limited amount it's an asset. During the 1970s crude prices raised to astonishing levels that brought about inflation, there was no resounding policies to tame this inflation. Sooner the Milton freedman logic that Irving fisher equation holds good MV = PQ, so if money supply S rises then prices P rises keeping other things V velocity of money and Q the GDP constant. So he asked for a central office a reserve bank to formulate interest rates so that money supply is under control which in turn can control the price levels to manageable levels. Thus was born the monetary policy. So Money the evil led us to new theory of monitory policy another addition to the lexicon of economics and finance. But the evil inflation ie excess of money in the economy appeared regularly so frequent central bank policy moves on interest rates, an uphill task ask any reserve bank governor.
By the turn of the century the dotcom bubble led investors to heavily invest in internet companies. The euphoria surrounding the companies was great and investors out of earning lots of money in a short time invested heavily in these companies. But they forgot that they are betting for longer period of growth and not short-term growth. Their lust led to their financial disaster and loss of money. The same lust for money created the housing bubble at the start of the 21st century. Banks to lay off their risks in mortgage loans payment sold these loans to third parties called Sponsored Private Vehicles. These Sponsored Private Vehicles would create derivatives that would be sold to investors, taking interest differential. Thus profit motive led these Sponsored Private Vehicles to create such derivatives which as warren buffet said as weapons of mass financial destruction. They acted as a catalyst in the collapse of entire banking system. The rising housing prices created the greed among the investors to refinance loans and banks thinking that they are out of danger zone kept on lending money. Thus was born the housing bubble. Once subprime mortgages went in default, this created a sort of panic among investors of losing money so they withdrew their money from banks. Major investment banks went bankrupt and whole world economy came to halt.
Money is finally is really the root of all evil whether politically, socially or economically the love of money changed the entire landscape of human civilization but at the same time development would have been impossible without the money. Money was the King, is the King and will be the King for human beings. Lust is lust and humans can't escape from the lust of money since it is in their very nature.