“Heroes and Villains of Finance provides a fascinating and insightful guide to the personalities and developments that have transformed finance and continue to do so. Anyone trying to understand where finance is now, how it got there and where it might go should read this book.”
Dr Stephen Davies, Institute of Economic Affairs
“An exciting, informative ride through the big ideas and even bigger personalities that have shaped the world of finance.”
Sam Bowman, The Adam Smith Institute
“This delightful book provides a punchy reminder that, whilst we should rightly celebrate the longevity of the vision of the heroes of finance like Adam Smith, the potential downsides of financial innovation have always been with us which we are inclined to forget.”
Professor Mike Wright, Professor of Entrepreneurship at Imperial College London and ranked #1 worldwide for publications in academic entrepreneurship
This edition first published 2015
© 2015 A Baldwin
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Library of Congress Cataloging-in-Publication Data
Baldwin, A.,
Heroes and villains of finance: the 50 most colourful characters in the history of finance/A. Baldwin.
pages cm
Includes bibliographical references.
ISBN 978-1-119-03899-3 (paperback)
1. Finance – History. I. Title.
HG171.B36 2015
332.092′2 – dc23
2015006402
A catalogue record for this book is available from the British Library.
ISBN 978-1-119-03899-3 (paperback) ISBN 978-1-119-03901-3 (ebk)
ISBN 978-1-119-03900-6 (ebk) ISBN 978-1-119-03902-0 (obk)
Cover design: Wiley
Cover image: © Ollyy/Shutterstock
Bertrand Russell once famously said that “Western philosophy begins with Thales”. Does Western finance also? Although more renowned for his philosophy and mathematics, the pre-Socratic Greek philosopher Thales was an active figure in business in his town of Miletus. Known as one of the seven sages of Greece Thales of Miletus provides us with the earliest known example of what we now know as options trading. .
.. One autumn, Thales predicted that favourable weather the following year would result in an above average harvest and so during the winter he negotiated with local olive press owners for the option to exercise the right to use a number of olive presses in Miletus the following year. When spring arrived, his weather forecast proved correct, upon which he exercised his ‘options' before proceeding to rent out the olive presses at a much higher price than what he paid.
With this, the ‘option' was born.
Whilst today, the ‘option' industry has developed into a vast, complex market, its underlying reasoning remains the same as it was when Thales conceived it: an instrument that grants the holder the right (but not the obligation) to engage in a specific transaction, at a specific time, for a specific price.
