William Goetzmann: From Babylon to Bubbles — A 5,000-Year History of Finance (Investing in America Series) #632
May 29, 2026
AI Summary
5 min readFrom Sumerian Compound Interest to SpaceX: A 5,000-Year View of Finance
William Goetzmann, professor of finance at Yale School of Management, has spent decades excavating the deep history of financial markets. His most recent book, Money Changes Everything: How Finance Made Civilization Possible, argues that financial tools—loans, interest, corporations, bonds—are not modern inventions but ancient technologies that enabled cities to grow, trade to expand, and civilizations to survive. In conversation with Meb Faber, Goetzmann traces this arc from a 5,000-year-old Sumerian war reparations document to today's trillion-dollar IPO dreams, offering a historian's perspective on bubbles, risk, and what investors should actually do with their money.
The First Compound Interest Calculation
The Yale Babylonian Collection holds a clay document that Goetzmann calls a "two-fer": it records the first known war in history and the first known compound interest calculation. Around 2600 BCE, two Sumerian city-states fought over canals and land. The victor presented the loser with a bill for back rent on occupied territory, calculated by taking the normal yield on the land and compounding it over roughly 80 years. The resulting number was astronomical—billions of bushels of grain.
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What you'll learn
- 1 (02:01) **Introducing William Goetzmann & the Yale Babylonian Collection** - Meb introduces Prof. Goetzmann and his expertise in financial history.
- 2 (07:04) **The Core Thesis: Finance as a Time Machine** - Why Goetzmann wrote *Money Changes Everything* and the fundamental role of finance.
- 3 (11:18) **The Origins of the Corporation: The Company of the Bazacle** - The oldest known corporation, predating the Dutch and English models.
- 4 (17:33) **The Anatomy of Financial Bubbles (1720 to NFTs)** - Why bubbles happen and how they compare across centuries.
- 5 (22:46) **The Persistence of Speculative Dreams** - Connecting 1720 to modern IPOs like SpaceX.
- 6 (27:11) **Crash Anxiety vs. The Power of Patience** - A data-driven look at what happens after a market doubles.
- 7 (33:01) **Building a Purpose-Driven Portfolio** - How to think about asset allocation for different goals.
+ Full timestamped outline available in the app
Guests on this episode
Show Notes
Today’s guest is Will Goetzmann, Professor of Finance at the Yale School of Management. He is an expert on financial markets and securities, investment strategies, investor behavior and financial history.
In today’s episode, Professor Goetzmann walks through 5,000 years of financial history, showing how finance shaped trade, cities, corporations, and investing. He covers the first compound interest calculation, the world’s oldest corporations and bonds, and historic bubbles from tulips to NFTs.
To close, he explains why markets have repeatedly adapted through war, crisis, and uncertainty.
(0:00) Starts
(1:50) William Goetzmann on origins of money
(7:06) The history of corporations
(14:43) Yale's historical bond and early financial innovation
(17:33) Parallels between historical and modern financial bubbles
(25:52) SpaceX IPO and market valuations
(27:26) Herd mentality and bubbles
(32:47) Global investing, inflation, and currencies
(41:13) Finance-related art
(46:31) Most memorable investment
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Past guests include Ed Thorp, Richard Thaler, More from this podcast