William Goetzmann: From Babylon to Bubbles — A 5,000-Year History of Finance (Investing in America Series) #632

**Meb Faber** (0:06)
Welcome to a special series of The Meb Faber Show on the past, present and future of America. I'm sitting down with some of the most notable historians, thinkers, investors in US financial history, all tied to my new coffee table book, Investing in America, The Rise of a 250 Year Bull Market, out July 4th.

**SPEAKER_3** (0:26)
Meb Faber is the co-founder and chief investment officer at Cambria Investment Management. Due to industry regulations, he will not discuss any of Cambria's funds on this podcast. All opinions expressed by Pa...

**Meb Faber** (0:34)
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**SPEAKER_3** (1:33)
Our guest participants are solely their own opinions and do not reflect the opinion of Cambria Investment Management or its affiliates. For more information, visit cambriainvestments.com.

**Meb Faber** (1:42)
Welcome back everybody. Today is a very special episode. My guest today is Will Goetzmann, professor of finance, legendary professor at the Yale School of Management. He is an expert on financial markets, securities, investment strategies, investor behavior, financial history, all that good stuff. He's written lots and lots of papers, multiple books, including his most recent, Money Changes Everything, How Finance Made Civilization Possible. Will, welcome the show.

**William Goetzmann** (2:11)
Yeah. Thanks a lot for inviting me.

**Meb Faber** (2:13)
Will, I'm going to give you a compliment. I've had so much fun reviewing some of your older books that I'd never come across. Will, I had to spend 250 bucks to get a copy of your 1720 book, Shipped from Canada, which I'm really...
You're like Seth, a modern day Seth Carman, man. It's hard to find. You have to be a historian just to get one.

**William Goetzmann** (2:40)
We're going to have to get Yale Press to reissue that. This is a good piece of information. Tell them to look in and see how much money they can make if they print some more.

**Meb Faber** (2:47)
I've been a long-time reader and follower, not just of your writing, but even on places like Twitter and YouTube. I was watching a fun video which I thought we would start with today and it looks like you're at the Yale Babylonian Institute and it looks like a giant egg.
It's got some writing on it or more like a giant Easter egg. It's a story of some original transactions. Can we start there and talk about that? Because I don't feel like people really thought that finance may even start to date back that far.

**William Goetzmann** (3:21)
Sure. I'm happy to talk about it. It's one of the most exciting things that I discovered in the Yale Collections.
It's in the Babylonian Collection at Yale, which actually goes back to a gift that JP Morgan made to Yale University. Morgan had collected a lot of ancient Near Eastern documents and so forth, and he gifted it to Yale along with endowing, I think, a professorship, not mine, but for a curator of that collection. So it's connected to finance from the very beginning. But that document is the first document recording a war in history, and it was a war between two Sumerian city-states, sometime mid-2600, I don't know, almost 5,000 years ago for sure. They were fighting over canals and land, and one city conquered the other, and then told them, well, you owe us a whole bunch of back rent for the lands of ours that you occupied, and so it presented them with a bill, and the bill was some enormous number, like billions of bushels of grain or something like this. So what a weird thing to do, I guess not that weird when you think about reparations payments in the 20th century, after World War I and so forth. These were reparations payments, but what's interesting about it and the connection to finance is that the way they calculated up the bill is that they said, well, here's the normal yield on the land that you stole from us. Now, we're going to do a compound interest calculation.